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Offshore Software Development Services: Everything You Need To Know About It And Why It Is Beneficial

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It is always better to do your business locally when you can control it permanently. However, in some cases, outsourcing your business processes may be an advantageous and preferable option.

In this article:

 

Today we speak about software development processes. There are many disputes concerning remote developers’ hiring process, but these services have more pros than cons. That is why entrepreneurs from one country are looking for opportunities to hire offshore software companies. 

 

What is the difference between offshore and outsource? How to start offshore IT development, and what benefits it has? Read this article to the end to see all useful information to save on development costs.  

What Are Offshore Software Development Services?

What is offshore development? As a rule, offshoring means that companies move their business to another country to save costs and control all processes. However, in the case of software development, offshoring is the process of tasks outsourcing to another country where local teams are in charge of it. But clients can control the process and keep an eye on things.

 

So, outsourcing is not too different from offshoring. But outsourcing doesn’t always imply the development of software abroad. Outsourcing can be implemented within the country — you hand over task implementation to the contractor. And offshoring still means the delegation of development processes to another country. Besides, offshoring is a process when you hire a third-party contractor somewhere out of your timezone. 

What About Onshore And Nearshore Software Development? 

Probably, you have heard about onshore and nearshore terms along with offshore product development services. Let’s clear things out to provide you with a full picture.

  • Onshore development. It is a process of hiring software developers in your country. That is, you hire app developers that are located in your city or nearby. It is an excellent option to keep everything under control, but not a good idea if you want to save your money. Everything depends on the region where you live.

     

  • Nearshore development. It is similar to offshore software development since you hire developers abroad. But in neighboring countries with the same time zone. It makes it possible for you to communicate with developers easier, but this option is not always profitable.

Cooperation Models Of Offshoring Development 

Before you sign a contract with an offshore web development company (or mobile development team), you should choose a contract type. There are four primary models, so scroll down to read more about them. 

  • Fixed price. As its name suggests, you pay a fixed cost for offshore software development services after a detailed estimate. Then, the work is initiated. If you want to add new functionality to your app later, the company will need to make a new detailed estimate, and you will pay additionally for a new contract. This model is suitable for not complicated projects that have predictable and well-studied functionality.

     

  • Time and material. This model implies that clients pay for the amount of time spent on development. Unlike the fixed price model, you can add new features and any other changes, but the exact final price is unknown until the development is completed.

     

  • Dedicated team. The client hires a team that will create a project for them, and they will work only on that project. Offshore development firm assigns developers, UI/UX designers, and QA engineers on its own, so the client is not involved in the recruitment process. Communication with a team is performed between the project manager and the client.

     

  • Outstaffing. Sometimes clients don’t need a full-fledged development team. They have in-house developers, but the project requires finding a couple of additional professionals, for example, Ruby developer, senior UI/UX designer, etc. And clients hire offshore developers on a remote basis. 

 

Due to the abundance of cooperation models, it can be challenging to make the right choice. Ask experts — get in touch with managers from Cadabra Studio. 

Pros and Cons of Cooperation Models

Before choosing the right model, you must clearly understand the requirements of your project, make final decisions depending on how much flexibility and the quality of the relationships with the contractor you need for your project.

Type of cooperation model

Advantages

Disadvantages

Fixed price

  • fixed cost for offshore software development services after a detailed estimate;

  • allows customers to pay the pre-agreed price;

  • suitable for projects with limited deadlines and budgets;

  • the absence of additional supervision due to the strictly defined details.

  • poor project flexibility;

  • changes can be done only after estimation;

  • possibility of miscommunication;

  • bad for long-term projects.

Time and material

  • makes the development process gradual and continuous;

  • allows different types of payment (hourly, weekly, biweekly);

  • involves regular payments for completed work;

  • transparency allows monitoring the progress of the development flow.

  • the exact final price is unknown until the development is finished; 

  • uncertain deadlines;

  • management of every step of the development process.

Dedicated team

  • a dedicated team works only on the client’s project;

  • offshore development firm assigns the design and development teams on its own.

  • the client is not involved in the recruitment process;

  • communication with the team is  performed between the project manager and the client. 

Outstaffing

  • ability to hire required professionals for the project but not the whole team;

  • offshore software developers can be hired on a remote basis.

  • long search and recruiting process;

  • be ready to spend some time on the onboarding of the outstaffed developer.

 

 

If you have some questions left, a reliable development company like Cadabra Studio will give you a hint — contact us right now. Our managers will get in touch with you as soon as possible and help choose the most suitable model. 

Pros And Cons Of Offshore Software Development

Why do you need to hire offshore developers? You will do it only if you determine that you will get more benefits than drawbacks. Therefore, we need to list all pros and cons of offshore development. 

Let’s start with the pros.

  • Quality. It doesn’t mean that local companies will do a lousy job. At the same time, offshoring cannot guarantee that any project will be implemented on a high-quality level. However, if you find a reliable company, it will always adhere to quality standards to build a top-notch product.

     

  • Development cost. That is the main advantage of offshoring — clients get excellent software for lower prices because hourly rates are lower in those countries.

     

  • Delegation of all processes. Clients don’t need to spend time recruiting specialists, software and hardware purchase, etc. They find the software development team, and then their project can be implemented on a turnkey basis.

     

  • Time. A good company wants to provide dependable offshore development services, so it always strives to adhere to deadlines strictly. Offshore development companies want their clients to be satisfied and impressed with their services.

     

  • Focus on more critical tasks. Finally, clients may delegate software development to an offshore company and focus on more crucial tasks related to future software promotion and other marketing strategies.

     

 

Nonetheless, some cons are also hiding there.

  • Timezone and cultural difference. If a company is located on another continent, it can be rather tricky for a client to communicate with them since the time difference may be significant. But it shouldn’t be a big problem — trustworthy development companies will always find the right time to communicate with a client. Moreover, the software is being developed while clients are sleeping — not bad, huh?

     

  • Less control. It is not always easy to control a project remotely. Clients cannot control each detail, and if something goes wrong — it may take more time to fix everything. But reliable companies are always in touch with clients to provide them with any updates.

Risks of Offshore Development: Defining the Problems and Solutions 

Nothing ventured, nothing gained. There are some possible risks you may face in offshore software outsourcing. But we want to assure you that each risk has an effective solution.

  • Risk #1. Language barriers. 

    As most offshore outsourcing software development companies are located overseas, for many of them, English isn’t a native language. This factor may lead to a language barrier and poor communication. But there is a solution.  

     

    Solution: When you are looking for an offshore software development company, ask HR to provide you with a full picture of the level of English in the dedicated team. Choose a team that has an Intermediate or Upper-Intermediate English level.

     

  • Risk #2. The difference in timezones. 

    These pros mentioned in the previous passage may become a real risk if it isn’t handled correctly and in time. The communication can be weak; the updates would be done later.

     

    Solution: To avoid the woes of different time zones, we advise you to find a team that can easily find the golden middle in arranging the meetings. As a result, you can agree on a convenient schedule for both sides.

     

  • Risk #3. The risk of receiving low-quality results.

    Unfortunately, some companies aren’t mature enough to offer offshore development services. They have cheap hourly rates, which seems beneficial for the first time. However, in the end, the client gets a low-quality product. 

     

    Solution: Be careful and specific while choosing the offshore software development company. Hire a team that has a lot of feedback, high rates, and a strong portfolio. Also, check the year of the company foundation. It saves you time significantly.

     

  • Risk #4. A vendor can steal your idea.

    This is probably the worst thing that can happen in offshoring. You discuss the project requirements and share the details of your idea to create the general scope of the work. And suddenly, it occurs that your vendor has released their own product based on your idea. That’s painful.

     

    Solution: Three letters can prevent such a situation: an NDA or a non-disclosure agreement. By signing an NDA as early as possible, you ensure that the development company won’t be able to use any of your ideas or use your data for the company's goals.  

Essential Tips How To Hire Offshore Software Development Company And Avoid Mistakes

How to manage an offshore software development company wisely? This is not the most vital question since your primary goal is to find and hire developers. And you need to follow some crucial steps to avoid failures.

Research Is A New Knowledge

How to hire offshore software developers, if there are thousands of them? The answer is simple: research. It includes interviewing potential candidates, reading reviews about them from former clients, checking their portfolios.

 

Also, spend some time researching the information about offshore development services, how it is implemented, and get more information about the process of communication. And don’t be afraid to ask questions. 

Don’t Focus On Low Cost Only

Although offshoring software development implies low costs, you don’t need to look for cheap services only. Some companies may provide higher rates, but they have more skills and experience to enhance your project. Besides, the human factor cannot be ignored — look for a company that is communicative and can build good relationships with a client.

Draw Up All Requirements Clearly

You need to indicate all requirements in detail. The more information you provide developers with, the higher the chances that you will get exactly what you want. To avoid mistakes, see how to write a request for development and use a ready-made template. Although this article is dedicated to web development, you can use a template for mobile app development requests as well.

Hire Developers Who Keep Up With Trends

Make sure your partners are technologically advanced, and they always follow new existing trends. It has a direct impact on the quality of software being developed and makes a future product competitive. Besides, developers must be communicative so that all development challenges will become a trigger for them, not a barrier. 

 

Do you have more questions to ask? If your project is complicated, get in touch with a troubleshooting expert like Cadabra Studio.

Things to Consider When Choosing the Best Partner: Explicit Checklist

There are six key things you need to do while choosing an offshore partner: 

  • Evaluate the cost-effectiveness of your potential partner. Choose a flexible offshore partner that offers various pricing models and helps you choose the one that fits your business needs.

     

  • Analyze the security policy. A trustworthy offshore IT company must have established security policies. Therefore, make sure that the company follows the procedures and policies to meet your cybersecurity demands.

     

  • Examine clients’ reviews and testimonials. While looking for a potential offshore vendor, we advise paying attention to client reviews and testimonials. Take into account the references, case studies, video testimonials. You can find this information on vendors’ websites, LinkedIn profiles, ranking platforms such as Clutch, Manifest, Goodfirms, etc.

     

  • Сheck the technology stack used by an offshore development company. Offshore outsourcing software development companies must demonstrate the tech skills that you need for your project. Sometimes, a team claims to have high expertise, but you get a low-quality product in the end. Follow the tips from the previous passage to make sure your offshore company is trustworthy.

     

  • Define roles required for your project and how it meets your expectations. Some companies employ only designers or only developers. So, check whether the staff consists of the specialists needed for your project.

     

    Choosing the best partner is a responsible task. In case you need some guidance, read our detailed guide on how to hire the best app developers — it will help you make the right decision.

Effective Communication With Offshore Software Development Company. How to Do It Right? 

In this passage, we’ll highlight the key points for setting up effective communication. So, what do you need to do?

  • Set ground rules with the offshore team;

  • Be clear with the instructions;

  • Agree on constant communication;

  • Establish what kind of communication tools you’re going to use (Slack, Skype, Google Meet, Microsoft Teams, email);

  • Determine the types of tracking tools you’re going to use (Jira, Trello, Asana, etc.);

  • Discuss the ways of overcoming the differences in time zones;

  • Write everything that seems unclear to you and discuss it with your offshore software development partner.

 

Keep in mind that you have to stick to the listed rules regarding the communication process. Your product’s success depends on how effectively you build relationships with the offshore development team.

Offshore product development services work best when there is effective communication, transparency, and a strong foundation of trust.

Best Offshore Software Development Countries (Rates by Location)

Offshore product development services may have different costs in different regions. You should check hourly rates divided by areas and find the region you consider more appropriate. 

  • North America. Let’s start with the USA. The motherland of Silicon Valley is famous for its software development services. And that is why hourly rates here are rarely lower than $150. Moreover, the average hourly rate of experienced developers may exceed $175. And Canada doesn’t fall behind — average hourly rates here are the same as in the US.

     

  • Asia. Asian development rates are more diversified. For example, Central Asia doesn’t provide a high level of local developers’ skills and experience, so rates vary between $15 and $40. Whereas East and South Asia can offer you much higher rates — in China, some experienced developers get $75-200 per hour. As you can see, there is a big difference. However, rates in Indonesia and Vietnam don’t exceed $30-40 per hour on average.

     

  • Western And North Europe. Companies from Western European regions like the UK, France, Belgium suggest rates between $75 and $125 per hour. While Norwegian, Danish, and Sweden companies may set hourly rates between $130-300.

     

  • Eastern Europe. The average hourly rate in Eastern European countries varies between $20-50. The region is one of the most popular for offshore application development since local developers’ experience level is very high, so is the quality of developed software.

     

    For example, Ukraine is one of the East European countries where a large number of outsourcing companies are located (like Cadabra Studio). The country has a convenient time zone; its tech specialists speak English well (the problem of communication comes to naught), the Ukrainian software engineers have cutting-edge skills.  

Key Facts About Best Offshore Software Development Countries

Country 

Number of developers

Hourly rates 

Programming languages

Tech centers 

Famous startups

Ukraine 

192000

$35-120

Java, JavaScript, Python

Dnipro, Kyiv, Kharkiv, Lviv, Odesa

Ajax Systems, MacPaw, DepositPhotos

Belarus

40000

$28-35

JavaScript, SQL, PHP

Minsk, Grodno, Brest 

PandaDoc, Viber, MSQRD

Poland

254000

$25–42

Python, SQL, PHP

Warsaw, Krakow, Wroclaw

Allegro, Onet, Gadu-Gadu

Czech Republic

250000

$34-50

Java, JavaScript, SQL

Prague, Brno, Ostrava

Flightics, Datamatic.io, Kiwi.com

 

 

We advise you to choose the country with a high proficiency level and moderate prices — for example, Ukraine. By hiring an offshore development company in Ukraine, you will get a reliable partner that provides you with quality offshore software development services. 

TOP Offshore Companies for Hire 

We’ve created a list of 5 best offshore software development companies that will meet your business needs. 

  • Cadabra Studio

    Cadabra Studio is a development and UI/UX design agency that provides top-level offshore product development services. The team of 40+ skillful and proficient specialists provides Web Development, UI/UX Design, Web and Mobile Design. Cadabra Studio has already done projects in Insurance, Healthcare & Medical sphere SaaS/CRM/BPM, Education, etc. 

     

    The company works with a great number of clients around the globe and provides them with upscale digital products. Clutch Recognizes Cadabra Studio as a Top B2B Company in Ukraine. The company is open for offshore partnerships, so you can easily contact and hire the Cadabra Studio team.

     

  • SoftServe 

    With 50 offices in 11 countries and more than 8,000 people on board, SoftServe is one of the biggest tech companies in Eastern Europe. It offers a wide spectrum of services such as product engineering, quality assurance, development, project management, and business analysis.

     

  • Intellectsoft

    Intellectsoft is a European company that helps clients to improve their technical solutions. The company has deep expertise in the construction, healthcare, retail, and e-commerce industries. Along with the UI/UX design, development services, cybersecurity, the company provides offshore software development services.

     

  • ERGOMANIA Product design agency

    This Hungarian product design agency works for a range of small businesses, mid-market companies, and global enterprises. ERGOMANIA covers the entire production process. The team has in-depth knowledge and experience in the field of UX methodologies that compete with those of large international agencies.

     

  • Platform

    PLATFORM is a UX/UI agency that specializes in Web and Mobile app development. It has offices in three cities: New York, San Francisco, and Bratislava. The majority of their clients are small businesses and mid-market businesses. PLATFORM has done projects in advertising, financial services, information technology, and real estate. 

Platforms To Find Companies For Offshore Development Services 

In case you have an intention (or will have) to hire Cadabra Studio as an offshore software development company, you can contact us directly via the website or use platforms to read reviews about us. The platforms below contain useful information about Cadabra Studio as a reliable offshore vendor.

  • Clutch. A well-known and proven analytical organization that is engaged in collecting reviews about IT companies from real customers. Depending on the number of positive feedbacks, the service builds a rating of companies.

     

  • Upwork. One of the largest platforms for hiring freelance developers and software development companies for remote work. Upwork is often used for outstaffing when entrepreneurs hire our specialists for their projects.

     

  • GoodFirms. GoodFirms is similar to Clutch, as this platform also analyzes B2B software development companies, lets clients write feedback, and builds a rating system for companies.

     

  • Make It In Ukraine. Here you can find the list of Ukrainian software development and design companies and hire the one you consider appropriate for your project.

     

  • 99firms. A company that focuses on gathering marketing statistics and helps you find online agencies to pick the right one for your business.

     

  • DesignRush. And one more platform to find the app development agency of your choice. Moreover, you can post your project here and receive proposals from qualified developers. 

 

Use the services mentioned above to learn more about Cadabra Studio and get offshore product development services upon request. Contact us — we will offer the best solutions for your project!

Summary

Offshore is a complex topic that needs many explanations. That’s why we tried to provide you with explicit information about offshore software development in this article. Here are some takeaways.

 

Offshore software development has many more advantages than pitfalls. Yes, there are some risks, but any problem has a solution. So don’t worry about that.

 

Nowadays, offshore software development is a trendy business practice within which a company delegates software development functions to a third-party vendor located abroad. 

 

To sum up, you can use offshore software development services to: 

  • Partially or fully delegate software development of your project to a dedicated development team;

  • Hire skilled developers who will be a remote part of your tech project team;

  • Work with companies to hire a dedicated team of developers or a cross-functional team;

  • Create an outstanding digital product with the guaranteed 100% ownership to you.

 

If you need expert consultation, contact managers from Cadabra Studio. Start your path in the world of offshore software development with us! 

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