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Offshore Development Services in IT – Definition and Examples

Artur Olechowski d08c1359d2

31/03/2022 |

7 min read

Artur Olechowski

Working with a business in your home country is surely comfortable. But does this outweigh the benefits of offshoring IT development services?

Offshoring is becoming increasingly popular due to technological advancements, shortage of IT talent, and greater communication and management capabilities. 

How does offshoring work? And what makes it different from other forms of outsourcing software development like nearshoring or onshoring? Keep on reading this article to get all the answers and check if offshoring is the right choice for your business.


Table of contents:

  1. Offshore development – everything you need to know
  2. The most popular offshore development services
  3. How to choose an offshore software development company
  4. Offshore development – takeaway


Offshore development – everything you need to know

Offshoring refers to delegating IT development processes to a partner located in another country, often far away (literally on another continent), in a different time zone than the company's headquarters. 

A good example of offshoring is hiring a team of developers in Poland to build a mobile application while your business takes care of the web app. 

Why are companies using offshore development?

1. Lower IT costs

Whether you run a business (of any size), cost optimization is always on the agenda. Offshore software development services enable companies to build top-quality IT products at a lower cost. That's because you get to avoid all kinds of expenses:

  • Recruitment costs – sourcing, attracting, recruiting, onboarding, and training new employees takes a lot of time and money.
  • Administrative costs – workspace, office management, and other costs that are part of hiring a full-time employee who will work at your premises.
  • Overhead costs – perks and benefits, taxes, and all other expenses you pay when hiring IT professionals for your in-house team.

2. Access to a larger latent pool

One of the best use cases for offshoring is talent scarcity. Some geographical locations suffer from skills shortages or extremely high competition, and skyrocketing salaries. Offshoring offers a solution to all of these problems.

Dedicated offshore outsourcing companies can help you access such talent globally, so you don't have to worry about the many challenges and incredibly high costs of hiring top IT experts.

3. Greater business efficiency

There are a number of reasons why offshoring software development can help boost business efficiency.

Outsourcing is an efficient way to direct your company's time and resources toward its core business without wasting time on recruiting specialists, purchasing software and hardware, and so on. 

By outsourcing your software development project to a reliable company, you'll be able to concentrate on your core business strategy without any added stress. With development taken care of, you'll be able to meet deadlines and accelerate time-to-market. 

Your in-house team can focus on core business goals. If IT solutions aren't your main source of income, you may not be able to manage IT development in-house. 

Going offshore delivers both enough talented workforce and smaller expenses due to reduced operational costs. There is no need to hire and supervise IT specialists, so you have more time on your hands. 

Combine the factors described above, and scalability won't seem like a goal that's out of reach anymore – get the people and time to accelerate time-to-market and launch before your competitors do.

What is the difference between onshore, nearshore, and offshore development?

You've probably heard onshoring and nearshoring when people discuss outsourcing IT development services. Let's clear things up, so you know what these terms mean: 

  • Offshore software development is based on transferring a development project to a third-party vendor located offshore – for example, on another continent. This approach offers many benefits, from cost-effectiveness to access to a new talent pool.
  • Onshore software development refers to the possibility of hiring software engineers in your own country or region. That means you hire software developers located in your area or nearby. You might feel like you keep everything under control, but this approach is not always ideal depending on where you live and who you work with.
  • Nearshore development is similar to offshore software development, as they both involve hiring software engineers abroad. However, nearshore IT outsourcing happens between countries with similar time zones, such as Western Europe and Eastern Europe or the USA and Latin America. It allows for faster communication with engineers than with far-flung offshore software development companies, but it is not always cost-effective.

The most popular offshore development services

You can outsource a vast number of tech-related services. Here are a few examples:

  • Web development – Outsourcing such a service to an offshore development company gives your business a leg up over the competition with a flawlessly functioning website product. The outsourced team does their best to design and develop a flexible and modern website within the shortest time possible.
  • Mobile app development You don't need to hire an in-house team or pay for hardware or office space, for example. Offshore software developers will build a cutting-edge solution for you without the extra expenses of equipment and working space.
  • UX/UI design An outsourced UX/UI designer will make sure that your app delivers an intuitive and smooth user experience and attracts more people to your product. Meanwhile, you'll be able to focus on other essential business issues while entrusting the creation of your design solutions to a reliable outsourced team.
  • Quality Assurance services – Software development requires thorough testing to ensure that applications function without any defects. Even the best developer will soon get tired when obliged to write test cases and check each detail. Solution? Outsourcing testing to a provider that offers QA services, software product maintenance, or customer support to give your in-house team a break.

Naturally, this list doesn't exhaust all the offshoring options. You can also outsource data storage and maintenance, network security, IT support, or have an outsourcing company build an offshore development center for you.

Outsourcing is the optimal solution to any IT and business problem related to in-house productivity or capabilities.

How to choose an offshore software development company 

Many businesses choose to outsource their software development to offshore teams to optimize budgeting and increase scalability. 

An offshore development team usually employs a remote work model, in which the majority of processes are performed online, using different technology solutions for communication, collaboration, software versioning, and more. 

This outsourcing model comes with a number of risks. The most important one is potential miscommunication – the inability to clearly explain your objectives and share them with all team members. Still, regular calls allow for constant dialog that helps you communicate the project's goals and get to know all team members better, fostering productivity.

Although skilled offshore software engineers are abundant, it's possible to encounter an incompetent one if you end up choosing a provider with suspiciously low rates. 

When hiring an offshoring provider, always check the following:

  • Their pricing list and skills,
  • Portfolio of collaborations or completed projects,
  • Project management capabilities,
  • Referrals from other customers.

Managing remote teams can be difficult, especially if you try to juggle too many tasks at once. To avoid missed deadlines and launch your product on time, you need to work out a schedule, monitor the process daily, and hire somebody capable of handling different responsibilities. Hiring a project manager is the best way out – and most outsourcing companies provide this service in their standard offers. This will take the pressure off you and help you meet all product development deadlines.

Another important part of hiring an offshore team is the legal aspect of the collaboration. As part of its corporate governance, every country has specific regulations that may become a barrier on the way to successful software implementation. When choosing an offshore software development company, make sure that your vendor fully complies with relevant local regulations, confidentiality, data protection laws, intellectual property rights, and non-solicitation terms. 

You will avoid these and other pitfalls and count on smooth software implementation by outsourcing to a reputable agency with a proven track record and extensive professional experience.

Offshore development – takeaway

We hope that this article helped you understand the value offshore services present to companies that are scaling fast or looking to focus on core business processes and leave the technology part to someone else.

If you're looking for a talented team of offshore developers, we're here to help you. Our team will build custom software tailored to your needs and share our skills and expertise with your business to help it grow faster.

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Artur Olechowski d08c1359d2

Artur Olechowski

Managing Director at Codete. Master of Law, a graduate of postgraduate studies at the University of Economics in Krakow. In his daily work, he masters the combination of business strategy and technology.

Our mission is to accelerate your growth through technology

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