Offshore Development Center: Types, Benefits, And How To Choose One

Amanda Veloso
June 6, 2023
<p>To grow your tech business at a competitive speed one needs to build relevant and high-quality products and fast-track them to market. And to do that there is one factor that cannot be overseen: <strong>the people that will help you get there</strong>.</p><p>Yet, finding the right talent to build high-quality digital products can take time and effort.</p><p>According to the consulting firm, Korn Ferry, by 2030, there will be a global shortage of more than <a href="">85 million tech workers</a>, <strong>representing $8.5 trillion in lost annual revenue</strong>. This is pushing global IT to a new trend: outsourcing to an Offshore Development Center (ODC).</p><p><strong>Offshore Development Centers (ODC) are a cost-effective solution</strong> to overcome this challenge. Through this model, business gain access to a global talent pool and to top-tier quality work. Thus, they get the flexibility to adapt to different market scenarios.</p><p>Yet, not all Offshore Development Centers are the same. This means you'll have different types of providers to choose from.</p><p>By the end of this article, you’ll know everything you need to know about working with an ODC and how to choose the best partner for your business. Enjoy your reading!</p><h2 id="what-is-an-offshore-development-center-odc-">What Is An Offshore Development Center (ODC)?</h2><p>An Offshore Development Center is <strong>an office environment that operates in a location outside the hiring company’s country</strong>. It’s also known as an offshore software development center, an offshore development team, or an offshore software team.</p><p>Companies establish ODCs to outsource some or all of their software development or IT operations to a <strong>cost-effective location</strong>, to reduce costs or access specialized expertise.</p><p>This ODC isn’t assebled by your company.<strong> It’s assembled by a partner company</strong> that assists in ensuring productivity, setting up the necessary infrastructure, guaranteeing the best working conditions for the team, and making sure all the resources are a match for your company’s needs.</p><p>Yet, this doesn't mean you won't have control over their work; the ODC is hired to help your company <strong>overcome common challenges in software development.</strong> They fill in technical gaps in your team and follow your guidance to deliver high-quality software.</p><p>An ODC is the right solution if you need help in your software development efforts so you can focus on growing your business.</p><h2 id="which-specialists-are-part-of-an-offshore-development-center">Which Specialists Are Part Of An Offshore Development Center?</h2><p>The team’s talent pool will be tailored based on the skills needed to fulfill your project's needs. But there are some roles expected to be in most teams. They are:</p><ul><li><strong>Product managers:</strong> They work closely with the development team to ensure that the product meets customer needs and business objectives, and are responsible for making sure that every stage of it happens within its deadline</li><li><strong><strong><strong>Developers: </strong></strong></strong>They are responsible for writing and testing the code, guaranteeing the smooth functioning of the product</li><li><strong>Designers:</strong> They include UI/UX designers and usability engineers that are responsible for designing the software and improving the user’s experience with it.</li><li><strong><strong><strong>QA engineers: </strong></strong></strong>This team is responsible for running quality assessments to ensure that the final product is functional and has top-tier quality.</li><li><strong><strong><strong>Tech Leads: </strong></strong></strong>They oversee the technical side of the project, helping developers and designers overcome any possible setbacks during the software development cycle.</li></ul><h2 id="when-should-you-hire-an-offshore-development-center">When Should You Hire An Offshore Development Center?</h2><p>An Offshore Development Center increases your development rate without increasing risks or decreasing quality. Here are the situations in which you can benefit from hiring a dedicated engineering team:</p><ul><li><strong><strong><strong>If software development isn’t your core business: </strong></strong></strong>An Offshore Development Center allows you to reduce expenses while still keeping the projects going. It also allows you to focus on strategic business decisions, helping you achieve your goals faster.</li><li><strong><strong><strong>If you need bespoke tech expertise:</strong> </strong></strong>Finding the right talent is a time-consuming task. Besides, experts are expensive to find and nurture. An Offshore Development Center also allows you to set up an in-house training center tailored to meet your company’s demands.</li><li><strong><strong><strong>If you have a long-term project:</strong> </strong></strong>Large-scope development initiatives require continuous support, updates, and limitless scaling. An offshore software team can provide the continuous support you need to scale your project, assuring top-quality deliverables.</li><li><strong>If you have special data security requirements: </strong>Your Offshore Development Center will have the same security level as the domestic offices. They are like a new offshoot of your company, except they work overseas. So it will have measures to protect your company’s privacy such as access control, compliance officers, and built-in network security.</li></ul><h2 id="what-are-the-different-types-of-offshore-development-centers">What are the different types of Offshore Development Centers?</h2><p>As different types of ODC models cater to different business needs, companies must choose the right options to achieve their goals. Check out the main ones below:</p><h3 id="1-product-engineering-model">1. Product Engineering Model</h3><p>This Offshore Development Center consists of hiring a <a href="">dedicated development team</a> for your ongoing project. This team will manage the product creation process <strong>from ideation to designing, developing, testing, and scaling.</strong> It requires more resources than other ODC models because it needs a diverse team, complex infrastructure, and investment in research.</p><p>For leaders that aren’t experienced in software development, an ODC gives them access to a team of experts in building high-quality digital products. In addition, the team’s agile development processes allow the product to be highly adaptive to changing requirements or changing market conditions.</p><h3 id="2-contractor-model">2. Contractor Model</h3><p>The contractor model consists of hiring a third-party vendor to <strong>provide the resources and take over the management of the project.</strong> In some occasions, the contractor may also be responsible for providing infrastructure, charging a fixed amount or an hourly rate.</p><p>This model allows you to reduce the expenses related to hiring full-time employees, expands the talent pool you have access to, and reduces the time it takes to start the project.</p><p>In this format of cooperation, the in-house product or engineering managers communicate with the Project Manager at the Offshore Software Development Center. All tasks are performed by the offshore team and reported back to the headquarters.</p><p>With this approach, you can focus on the marketing of your product or working with your in-house teams, while the ODC will perform a certain part of your product development.</p><h3 id="3-customer-model">3. Customer Model</h3><p>The customer model consists of setting up <strong>an ODC owned and operated by the customer. </strong>The team is either formed by their new hires or by relocating existing staff for the Offshore Development Center. So the customer exercises full control over the project but still keeps the flexibility to adapt to changes within it.</p><p>In other words, the ODC operates as a subsidiary of the parent company. All the offshore team members are full-time employees of the client, the only major difference being that the business unit’s operations are based overseas. Also, the costs related to infrastructure, resources, and management are higher than other ODC models.</p><h2 id="what-are-the-benefits-of-hiring-an-offshore-development-center">What Are The Benefits Of Hiring An Offshore Development Center?</h2><p>Offshore Development Centers provide a wide variety of benefits such as affordable costs, access to international talent, and a reduced in-house workload. Here are some of the advantages of an ODC:</p><h3 id="focus-on-the-core-business">Focus on the core business</h3><p>Let the offshore software teams take over the software development projects and <strong>keep your in-house professionals focused</strong> on your business’s priorities or even on their own career development.</p><p>Improved hiring process</p><p>By partnering with an offshore development center, you can <strong>streamline the hiring process significantly</strong>. Rather than navigating the time-consuming and expensive steps of recruitment, onboarding, and training in-house employees, simply communicate your project requirements to the service provider and trust them to manage the rest efficiently.</p><h3 id="expanded-access-to-global-talent">Expanded access to global talent</h3><p>There's no need to settle for a less-than-ideal candidate simply because they're local. The expert with the right combination of technical skills, experience, and interpersonal abilities might be located in an unexpected place. By partnering with Offshore Development Centers, <strong>you can access a wide range of highly skilled professionals </strong>from around the world and ensure the best fit for your project's needs.</p><h3 id="enhanced-adaptability">Enhanced adaptability</h3><p>In the ever-changing landscape of technology and business, companies and startups may face challenges adapting to market shifts and internal project or business model changes. Offshore Development Centers offer the <strong>flexibility to effortlessly scale teams up or down</strong> based on current project demands, ensuring seamless adaptation.</p><h3 id="constant-support">Constant support</h3><p>An Offshore Development Center helps <strong>ensure the continuous development of a project. </strong>They help the in-house team overcome any roadblock in the development process, while also sharing technical decisions. Companies then have the ability to complete their projects at a much faster rate while still maintaining a high level of quality in their work.</p><h3 id="optimized-budget-allocation">Optimized budget allocation</h3><p>Offshore Development Centers are often located in countries with lower living costs, resulting in more budget-friendly development services. <strong>The savings generated can be reinvested</strong> in expanding your team, acquiring new technology, or enhancing other departments within your company, such as marketing.</p><h2 id="4-things-to-consider-when-choosing-an-offshore-development-center">4 Things To Consider When Choosing An Offshore Development Center</h2><p>So if you’re interested in partnering with an ODC, how do you find and build trust with one? The truth is that an ODC is as good as your vetting process. Making a well-funded selection is the difference between the success and failure of your project.</p><p>The <strong>first thing to consider when choosing an Offshore Development Center is cost</strong>. The cost of labor is usually much lower in developing countries than in the United States or Europe, so if you're looking for cheap labor, then you should consider outsourcing your project to one of these countries.</p><p>The <strong>second thing to consider is language barriers</strong>. If you need to communicate with your team on a daily basis, then it's best if they speak the same language as you do. It's also important that developers are able to communicate effectively with each other so that they can work together as a team and complete tasks quickly and efficiently.</p><p>The <strong>third thing to consider is how well the company has been reviewed by others</strong>. You should always check out reviews from other companies who have used them before as well as read reviews left by previous clients who have worked with them before; these will give you an idea of what kind of service they provide and whether or not they're worth using for your business needs.</p><p>The<strong> fourth thing to consider is how much experience the developers have</strong>. You should always check out their previous work to see if it's any good or not; this will give you an idea of what kind of service they provide and whether or not they're worth using for your business needs.</p><h2 id="would-you-like-to-know-more-about-hiring-an-offshore-development-center">Would You Like To Know More About Hiring An Offshore Development Center?</h2><p>An ODC is a tool that enables you to focus on the core of your business. It can deal with a software development project so that in-house teams can be free to tackle core business assignments. If you want to know more about the possibilities an Offshore Development Center can provide you, <a href="">follow us on LinkedIn</a> and fast-track your company’s growth now!</p>