Software development is becoming increasingly difficult with the level of competition we are facing. Almost everyone needs a website or an application created, but few people know how to build it themselves. While some people prefer to hire their own developers, others prefer to outsource the work to offshore development centers.
Offshore development centers, or ODCs, are divisions of a company based in another nation that offer a more limited and specialized set of services. Software development, financial services, and customer support are the most common of these services.
Increased access to more specialized labor, lower pricing, and lower infrastructure expenditures are just a few of the advantages. The most significant disadvantage is that establishing an offshore development center is easier said than done. That doesn’t mean it’s out of reach; it just means you’ll need to think about it carefully before getting started.
We’ll go over the top ten factors to think about when building an offshore development center below.
The first thing to consider is the location of your offshore development center. The majority of people think of India, Indonesia, the Philippines, etc to be the best locations for the mentioned role.
Your offshore development center should be located somewhere where demand for technical expertise exceeds supply. These are mainly countries with internationally recognized research and technology hubs, but whose economies are mostly manufacturing or agrarian.
These countries’ populations are typically large enough to meet the need for labor, which means that those with advanced degrees in specialized sectors like software development face severe competition if they wish to work in their own country.
Your offshore development center should ideally be in a country where the local currency is less valuable than yours. This is what permits people in nations like India to work for lower wages than workers in the United States or the European Union.
2. The Law of the Land
Once you’ve determined which country you’d like to create an offshore development center in, you should research the legislation governing international trade in that country.
The majority of countries that come to mind when you think of offshore development are actually highly welcoming to the concept. As previously said, these centers incentivize citizens of those countries to seek high-paying occupations in their own countries rather than seeking specialized work abroad.
Offshore developers may be paid by an entity outside of their country, but they spend the money in their own country, which pleases their governments. That isn’t to say that those nations don’t have rules governing things like the currencies in which workers can be paid, as well as different tax bands.
3. Taking Care of the ODC
The next aspect to consider is how the offshore development center will be managed. Naturally, the offshore development center will act as a remote branch of your current company. There has to be a way in which things can be managed in the best way possible. For example, revolving between the main office in New York and an offshore development center in India, South Korea, or Ukraine is very different from a satellite branch in Chicago. If you have the funds, this is an option you can pursue, but keep in mind that it will eat into the revenues connected with establishing an offshore development center in the first place.
4. Hiring and Recruitment
Of course, the manager of your offshore development center is just one of the jobs you’ll have to fill. You’ll need programmers, as well as folks who work in areas like accounting and human resources. You and your company will need to figure out how to fill these additional positions as well as how to vet them.
5. Covering the Costs Overhead
You may also have infrastructural expenditures similar to those you encounter at home, such as equipment and space, depending on how your offshore development center is architecturally built. When it comes to cost analysis, these things should be taken into account.
6. Collaborating with an Existing Group
If all of this sounds overwhelming, there is one solution that eliminates much of the start-up effort. That’s what it’s like to work with a committed outsourced workforce. Many of these groups work on a client-by-client basis, switching from one to the next. You might be able to effectively absorb an existing outsourcing company if you control a team’s time and convince them that you can keep them occupied eternally.
7. Cost Estimation
Cost analysis is essential since it enables you to determine how much money you can currently invest in your offshore development center. In the long term, your offshore development center will undoubtedly save you money. However, considering the accompanying start-up costs, it may be some time before you see those returns. As a result, you may only be able to invest a certain amount of money in your offshore development center at this time. You can always expand later, but putting in more than you can afford at the start can hurt you rather than helping you.
This is an excellent time to reevaluate your vision for the services that the offshore development center will provide. Obviously, development, but many companies also relocate their customer service departments to offshore development centers. That’s fine if you have enough developers to have them wear both hats. If relocating your customer service department – or creating a specialized customer service department – necessitates recruiting more workers at your offshore development center, you may want to reconsider for the time being.
9. Infrastructure for Information
You should also consider how files will be shared between your main office and the offshore development center. Having an offshore development center means you won’t have to store as much potentially sensitive information at your main office, but it also means you’ll need a mechanism to transport that information back and forth as needed. This implies you’ll need to consider internet storage and communication options that are secure.
10. Communicating the Change
Once you’ve worked out everything, you should start thinking about how you’ll inform your staff and consumers about the change. After all, your team will now be working with the offshore development center. if the offshore development center handles customer care, the shift will affect all of your clients and customers who use your services and goods, and they should be informed about it on a prior basis.
This can be problematic because many customers assume that customer service teams based in other countries give inferior service. As a result, highlighting the positives can be beneficial. Check some pitfalls and solutions of ODC Here.
It’s a big step to open your own offshore development unit. It requires a lot of effort, time, and money. It does, however, provide you complete command over your offshore development staff. Furthermore, compared to opening a domestic development center or even boosting the size of your home club, it is guaranteed to save you money in the long term.
Using this blog as a leaping point, you should be able to discover lots of resources to make your experience with building an offshore development center a profitable and rewarding project.
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