Quick Summary: Setting up an offshore development center can be a smart move for companies seeking to grow their business. However, it's crucial to assess various factors before taking the plunge. In this article, we'll provide you with a comprehensive checklist to help you determine when it's the right time to establish an offshore development center.
The newest Mckinsey Global survey shows that it’s arduous to find specialists with the required skill set.
Whether it's hiring new resources, establishing infrastructure for a new office, or any other business scaling-related task, everything needs significant investment, right?
So, setting up an offshore development center with a reliable and entrusted service provider seems to offer a sigh of relief in the given circumstances.
If you are reading this blog, you are probably either looking for a solution to create a software product in a budget-friendly way or planning to set up an offshore development center to expand your business in remote locations.
Yes? Look no further!
Offshore Development Centre is the answer to your dilemma.
This comprehensive guide will shed light on everything you need to set up an offshore development center without leaving a burning hole in your pocket. But, before we dig a little deeper, let’s have a quick rundown of what offshore development means.
Key Takeaways
- Offshore development centers can offer a cost-effective way to expand your operations, but it's essential to consider the potential risks and benefits before making a decision.
- Factors to consider when setting up an offshore development center include talent availability, cultural differences, infrastructure, and regulatory requirements.
- Conducting thorough due diligence and creating a well-defined plan can help ensure the success of your offshore development center.
When To Set Up An Offshore Development Center?
You might be sitting on the fence as to when to hire offshore developers or set up an ODC.
There are many options when offshoring becomes the best viable choice. But, let’s shed light on the crucial ones!
1. Lack of Tech Talent
The world is experiencing a 15-year low point in an ongoing talent shortage. Unsurprisingly, India will witness a Level A TMT (Technology, Media and Telecommunication) surplus of 1.3 million workers by 2030, offering yet more opportunities for the nation.
Although, in a recent study by Korn Ferry, India pulled in at No.7 (America was No.1). But, with the USA facing Level A talent crunch in 2020 - a shortfall predicted to exceed 625,000 TMT employees by 2030 - it can be filled by India with its skilled worker surplus, storming up the ranking surpassing US tech hubs. To put it simply, India could challenge America’s position well before 2030.
Not to forget, the competition for adequate skills can impact the world as it can increase the cost of labor, lower quality, and also slows down production. So, to address these demurs, offshore development centers are one of the best options.
2. Oversee More Cost-Effective Operations
In the U.S and Western Europe, hiring the best talent comes at a premium. However, to start with, payroll is the only aspect of setting up a software development team. There is:
- the end-to-end recruitment process,
- office space,
- state-of-the-art equipment
- employee-centric benefits like insurance, health benefits, gratuity
These all factors make the concept of building an in-house development team an expensive affair, especially when you are located in cities with a high cost of living like New York, Singapore, and London.
Therefore, going offshore and building a team in India or Ukraine can significantly reduce the cost. Moreover, the cost of living in these countries is a lot lower; you can hire equivalent labor at an affordable cost.
3. Kickstart For First-Mover Advantage
In a marketing strategy, “First-Mover Advantage” is the competitive benefit gained by the initial significant occupant of the respective market segment.
That’s a typical situation where setting an ODC proves to be a viable working option. In simple words, an ODC helps to accelerate the development of a potential project idea without any delay, especially when in-house teams are already involved in other critical projects.
Furthermore, it helps companies and brands to establish strong brand recognition, customer loyalty, and early purchase of resources before other competitors enter the market and gain the lion’s share.
4. Investment-Friendly Nature
A little aside from being a budget-friendly option, setting up an Offshore Development Center proves to be investment-friendly too.
Hiring offshore developers gives small to medium enterprises an opportunity to work with global talent. Furthermore, ODC helps build a global presence that eventually helps businesses acquire investments across the globe.
Notably, it offers your company a chance to have an international network of professionals and build relationships which inadvertently helps your brand’s presence.
5. Scale Your Business Quickly and On Your Own!
Imagine your business is booming at an unprecedented pace, and you are growing like never before. Your company proves to be a hot pick from numerous potential clients, but just because you don’t have the potential that you need to scale and address the new requirements as they emerge, you have to turn down your valuable opportunities.
And, businesses would never want to find themselves in these situations.
However, investing in a trusted offshore development team that provides you with on-demand horizontal and vertical scaling to address the challenges of capacity planning ensures the right resources are in place to handle expected as well as unexpected traffic demands.