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For over two decades, offshore software development has been a mainstay of the global software development industry.

The demand for software development is increasing, and Offshore Software Development Centers (ODCs) have popped up in recent years to help startups and enterprises work with talented people worldwide. Also, the market size of IT outsourcing is expected to reach $938 billion by 2027.

Setting up a Dedicated Offshore Development Center: The Basic Principles

The fundamental reasons for this are lower costs and access to a larger, more talented labor pool. You can also improve collaboration and optimize the management of your software development projects by setting up an ODC.

However, setting up and managing an offshore development center (ODC) can be daunting. When setting up an offshore development center, you must stick to some basic principles.

In this blog, we will explain some essential elements of setting up an offshore development center. You can create a productive and efficient development center that meets your business needs by going through these principles.

Here we go!

What is Offshore Development Center?

Setting up a Dedicated Offshore Development Center: The Basic Principles

The offshore development center provides a complete solution for your software development needs. The offshore software development is the best of its class, where you get your requirements implemented without being dependent on any third party.

The ODC delivers the quality solution required to meet your business objectives. It is a novel and efficient business model that large IT product companies and startups can utilize.

Moreover, they are an excellent way for companies to reduce costs and establish their presence in countries with large skilled labor pools. You can also contact any offshore outsourcing software development company to avail the benefits.

The Basic Principles To Set Up Dedicated Offshore Development Center

Setting up a Dedicated Offshore Development Center: The Basic Principles

  • Choose a location

When choosing a location for offshoring, it is essential to consider all aspects of the culture & language preferences and the technical skills required.

Also, make sure that the vendor has expertise in helping you find what’s best suited to your project requirements.

You can pick Latin America, Eastern Europe, and Asia to set up your ODC. Poland and Ukraine are big players in Easter Europe, and India is the giant in Asia. However, if you choose an offshore software development company in India, you will get exclusive benefits.

  • Find a trusted partner

Not all business partners are equal when setting up an offshore development center. So try to find a good offshore software outsourcing company that can fulfill your project requirement.

You can go through the following variables when choosing a trusted offshore software development services company.

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  • Technical Expertise

When choosing an offshore development firm, look at their portfolio and testimonials to see if they are the right person for your project.

Consider checking if they have industry expertise in addition to English fluency because this will help you ensure that you can meet all deadlines with success.

  • Cost flexibility

Try to make sure you pay only for the services you hire from the offshore development center. Ask the vendor to give you the details like an invoice with transparent costing and a description of professionals and the work done.

  • Project Transparency

You must ask vendors to ensure transparency while working on your project. You can do so by asking for updates from time to time and by following proper communications and protocols.

  • Begin recruitment

After partnering up with a service provider, lay the first stone of your recruitment process. At this point, researchers will start analyzing current labor markets and select eligible candidates to interview.

  • Find an office

While recruiters are busy interviewing the candidates, your next step should be to find an office workspace. Decide for security system, office planning, seats, equipment, parking area, etc.

You can also take the assistance of real estate managers who would be guiding you to find a suitable workspace for your future IT professionals.

  • Get legal support

You can’t just go into a lease contract signing without hiring an experienced lawyer. So also, make sure you hire an experienced lawyer.

The lawyers will ensure that you are getting the best terms of the agreement. However, it takes a good understanding of the national law and profound negotiating skills.

  • Make procurements

To equip the new office, you need to procure furniture and proper IT infrastructure. So make sure it includes computers, software, security system, servers, etc.

  • Organize HR payroll

You need a person to organize HR payroll and accounting for your new offshore development center. This will support the functioning of operations while also making sure that you are aware of every step, including money transfers between ODC and head office.

Also Read: A Detailed Cost Comparison – Offshore VS Onshore Teams

Mistakes in Setting Up Offshore Development Center

  • Don’t Involve many recruitment agencies

When you decide to open an office abroad, most businesses feel it is good to involve at least two or three recruitment agencies in the local market. This way they can get more information and make their decision easier.

Unfortunately, this “excellent” plan seldom works and causes problems. A candidate can get interview calls from all recruitment agencies and be perplexed.

So, one ultimate solution is to keep it local by dealing directly with one recruitment agency who knows your company and the candidates inside out.

  • Don’t Ignore employer branding

Employer branding can be a powerful tool in the recruitment process. If you want to accelerate your search, start with an employer brand campaign that focuses on how great working at this company would feel.

  • Unadaptable company policies

For many companies, their corporate HR policies work well with in-house teams but not necessarily those located offshore.

For this reason, you should be adaptable and discuss the vacation & day off opportunities individually for each individual.

  • No IP rights agreement

Hiring developers means you trust them with your intellectual property, but it’s essential to ensure they won’t leak any information.

So never forget to consult an IT lawyer before signing anything and protect yourself if something goes wrong.

Also Read: Importance of dedicated resource for Android application development

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Benefits of An Offshore Development Center

Setting up a Dedicated Offshore Development Center: The Basic Principles


  • Cost-Effective

Offshore development centers can be very cost-effective, as they often allow companies to outsource work at a lower price than they would be able to in their home country.

Additionally, companies can often save on office space and other related costs by having an offshore development center.

  • Access to Expertise

Companies can hire developers who are very experienced at the tasks they are working on. This can allow faster work because of previous experience with similar projects and better results.

Moreover, it allows companies to access development expertise that might not exist in their home country.

  • Access to Talent

Hiring employees in an offshore development center allows companies looking for talented developers access to much larger pools of potential employees.

This can allow them to find the best person for the job, rather than just taking whoever they can find locally.

Further, it ensures that they always have access to talented developers, even if the talent pool in their home country is limited or non-existent.

  • 24/7 Operations

Because their employees are located in offshore development centers, companies can ensure round-the-clock operations. This can help them get more work done and make it easier for them to access customer support.

Moreover, having a 24/7 operation can make a company appear more reliable and professional overall.

  • Reliable Operations and Delivery

An offshore development center can allow companies to access reliable operations and guarantee that they will get the work done on time. This is because employees in offshore development centers are often more experienced, which means that they don’t require as much supervision.

Additionally, having a long-term relationship with their offshore development center allows companies to build trust and ensure that everything will go smoothly.

  • Better Focus on Vision and Strategy

An offshore development center can be an excellent way for companies to focus on their vision and strategy. By outsourcing work to an offshore development center, companies can free up their employees to work on more crucial tasks.

This can ensure that employees are constantly working on high-priority tasks and don’t waste their time doing low-priority, lesser important work.

  • Increased Control

An offshore development center allows companies to have increased control over the work. Because, in most cases, they need to approve or supervise everything done in the development center. Managers can also access metrics and monitor work in real-time, which can help to ensure that everything is going smoothly.

Bottom Line

Outsourcing work to an offshore development center can be a great way for companies to save on costs, access expertise they might not have in-house, and focus on their vision and strategy.

Though having an offshore development center has many advantages like the above, it’s essential to be aware of the risks involved to ensure everything goes smoothly.

This includes having a solid IP rights agreement in place and ensuring that the developers you hire are trustworthy.

By considering the points above, you can ensure that your company reaps all the benefits of working with an offshore development center.

If you’re looking for help setting up an offshore development center, our team at ValueCoders is here to assist you. Our experts can help you set up the ODC and understand everything your company needs to set up an effective offshore development center.

Also Read: Why Offshore Outsourcing Still Remains The Best Bet for American and European Firms

Frequently Asked Questions

Q 1 What kind of projects are most suitable for offshore development, big or small?

There is no concrete answer to this question as it depends on each project’s specific needs and requirements.

However, small projects are generally better suited for offshore development than large projects.

The reason is that small projects are less expensive and less time-consuming to develop and manage, so they are more feasible for a remote team of developers.

Additionally, since the offshore team will coordinate with your in-house team, smaller projects will be easier to manage and monitor.

Larger projects can be more challenging to manage remotely, as there is often a greater need for communication and coordination between the client and the development team.

Additionally, large projects can be more costly and time-consuming to develop, making them less feasible for an offshore development team.

Q 2 Why is the popularity of offshore software development growing so fast?

The popularity of offshore software development is growing fast because it offers several advantages for companies, including:

  • Lower costs

Offshore software development is often cheaper than hiring developers in-house or working with a traditional software development vendor.

  • Faster time to market

Business can get their products to market faster by outsourcing the development process.

  • Greater scalability

Companies can ramp up or down their offshore development resources as needed, making it easier to scale up or down their software development efforts.

  • Improved quality

By working with a team of developers who are experts in the specific technology used for your project, you can improve the quality and accuracy of your software.

Q 3 What is the difference between building an ODC and outsourcing?

The significant difference between building an ODC and outsourcing is that with an ODC, you own and control your data. Moreover, outsourcing services give up control to a third party.

With an ODC, you are responsible for designing, building, and maintaining the infrastructure. With outsourcing, the third party will design, build, and maintain the infrastructure for you.

Also, you are responsible for managing and securing your data with an ODC. With outsourcing, the third party controls and secures your data on your behalf.

An ODC provides more autonomy and flexibility than outsourcing. An ODC can be tailored to meet your specific needs, whereas an outsourced system is likely to be one-size-fit.

Setting up a Dedicated Offshore Development Center: The Basic Principles

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