Key Terms You Should Know Before Outsourcing IT Services

Things to Consider Before Outsourcing IT Services to India

Have you realized the importance of outsourcing IT services? Is it going to be your first experience? Well, don’t worry. You are on the right path and we will provide you all the information you need to get started.

Considering that you have already made the decision, you know all the benefits of outsourcing. But do you know the various key terms that relate to this business strategy?

No? Don’t sweat. We have got you covered.

Key Terms Related to Outsourcing Software Services


So, let’s get started with some basic terms!

1. Offshore Outsourcing

According to Google dictionary; offshore means “situated at sea some distance from the shore” or “foreign country”. When you combine it with the term outsourcing, it becomes an efficient business strategy, which is being utilized around the globe for the past 2 decades.

So, offshore outsourcing is the practice of hiring dedicated offshore developers to work on specific business operations. Usually, companies hire experienced developers from a country where the cost of living is significantly lower. It helps them to reduce the overall operational costs without compromising on the quality.

Most of the companies around the globe that offer these services, provide three engagement models “retainer, hourly, and dedicated team model”. Depending upon which one will be suitable for your business, you can hire developers quickly and get started within no time.

In case you don’t know, let’s run down the benefits of offshore outsourcing:

  • Lower operational costs
  • Access to a large talent pool of experts
  • Flexible hiring models
  • On-demand hiring
  • Reduced time to market
  • Improved services and quality
  • Risk mitigation

Just for reference, a lot of businesses promote their services with another set of terms. A few of them are offshore developers, offshore development teams, remote developers, and remote development teams.

So, the next time if you will come across hire offshore developers, you know that the company is providing offshore outsourcing services.

2. Offshore Development Center

Now, we already know the meaning of offshore. But what about the development center? Well, consider it as a station from where all your offshore developers, designers, software testers, and project managers will operate.

This approach seems to be the right fit for organizations that are continuously evolving and readily scaling up. Summing up the whole term, the concept is the same. However, the only difference is that in the case of ODC (offshore development center), you are engaging with the offshore developers on a long-term basis.

Setting up an offshore development center is just like opening your branch in a foreign country. Not only it will help you to increase your global reach but also provide you a competitive edge in the market.

Benefits to set up an ODC:

  • All digital solutions under one roof
  • Freedom to introduce your work approach and methodologies
  • Capability to scale up or down your team quickly
  • State of the art infrastructure in terms of both hardware and software

3. Customer Service Level Agreement

It is always recommended to sign a service level agreement before collaborating with an offshore company. It defines the list of deliverables or services that a company will provide to the client.

SLAs (service level agreement) are common to business while onboarding new clients. A few important elements of SLAs are as follows:

  • Summary of the agreement
  • Objectives
  • Requirements
  • Point of contact
  • Conditions (in case the objectives are not met & exit policy)

So, it’s best to work with reliable & trustworthy companies that are readily willing to sign a service level agreement.

4. Non-Disclosure Agreement

Whether you hire a single resource or entire team, confidentiality is an important factor to consider. As soon as you sign a non-disclosure agreement, it creates a legal obligation to keep all the information related to the project secure.

The confidential agreement holds two main purposes:

  • Protects the sensitive information
  • Help keep the patent rights, in case of new product development

Thus, signing a non-disclosure agreement with the company ensures that all your information is safe.

Wrapping up!

We believe that you might have understood the four most important key terms related to outsourcing. Also, as we have mentioned earlier, if you need consultation regarding outsourcing software development, we can help you with that.

Just get in touch with us at [email protected]¬†& our business head will guide you through the process.

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