What is an Offshore Development Center?

An Offshore development center commonly referred to as ODC, is a software development team specifically consisting of software developers, designers, project managers, and other IT specialists located in a different country to handle specific software development projects. It is an offsite extension of an organization where the team collaborates with the in-house team to offer software development services upholding quality standards. 

The offshore development center (ODC) operates by following the company's core business goals, rules, and policies. This is a subsidiary of the main company and is considered to be a strategic approach to access globally talented professionals reducing operational expenses. Opting for ODC will be the best solution for companies that are focusing on growing their business across any geographical location.  

Key Takeaways

- An Offshore Development Center (ODC) refers to a team of software developers, designers, and IT specialists who work remotely for a client located in a different country or region.

- ODCs are essential business models for companies that require offshoring their software development and other IT-related work.

Offshore Development Center Models 

Different ODC models have their distinctive features and approaches toward driving success in software development.

Dedicated ODC Model 

A dedicated ODC model consists of a dedicated team that works on a client’s project collaborating closely with the in-house development team. This approach is preferred to offer a high level of customization and commitment to clients for the long term with a faster project deployment in the market. The client has direct control over the team, which helps make decisions and set priorities based on their requirements. 

Product Engineering ODC

The product engineering ODC model is suitable for organizations that are searching for additional assistance to the in-house team for an ongoing project. As the name suggests the organization uses this approach for product engineering which refers to the whole lifecycle of software products. Product engineering ODC model contributes to delivering high-quality products based on changing market conditions and requirements. 

Project-Based ODC Model

The project-based ODC model is a dynamic approach where a team of professionals is established for a specific project or a set of defined projects with a pre-determined time and budget. This approach is different from other models where this model is ideal for short-term projects with clear and well-defined project goals. This model also enables quick project deployment as these projects have short-term requirements. 

Hybrid ODC Model 

The hybrid ODC model is a combination of both onshore and offshore development. This type of model is highly suitable for long-term projects and allows for maintaining collaboration with the onshore and offshore teams with an effective communication strategy. This approach facilitates high flexibility where the organizations can adjust the team size based on the project size and can gain access to global talents. 

Benefits of Offshore Development Center

Establishing an offshore development center contributes to considerable business benefits that significantly drive success in the dynamic software development landscape. 

Cost Efficiency

Cost efficiency is one of the major benefits companies gain by establishing an ODC is cost efficiency. By setting ODC in other countries with lower costs of living companies can reduce their operational costs. 

Access to Global Talent 

Establishing ODC helps in gaining access to a vast pool of global talents with unmatched technical expertise in different geographic locations and maintaining high-quality standards. 

Risk Mitigation

ODCs help in mitigating risks associated with project development, delays, shortages of employees, or any unforeseen challenges within the company. 

Flexibility

ODCs offer companies enriched flexibility by helping them scale resources based on the project requirements, faster deployment, and adaptability to dynamic market conditions. 

Rapid Time-To-Market

Offshore development centers accelerate the development processes which helps delivery of the projects on the estimated time as they often work in different time zones. 

Business Growth 

Setting up ODCs helps companies and organizations to expand their services with cost optimization which ultimately improves the brand presence and its growth across the globe. 

How to Setup an Offshore Development Center?

Establishing an offshore development center requires meticulous planning and a strategic approach. Discover the steps entailed in setting up a productive offshore development center. 

Define Objectives and Goals 

The initial step in setting up an ODC is to clearly understand and define the scope, goals of the projects, outcome of the project, timeline, required number of employees, and budget, and define the roles and responsibilities of the team. 

Choose ODC Location

The second step involves choosing the right location that aligns with technical expertise, cost of living, cost-effective labor rates, cultural preferences, time zone, and political and economic stability. 

Adhere to Legal Issues

Each location has its own rules and regulations and it is essential to understand all the requirements for both the onshore and offshore location which includes necessary contracts, tax regulations, property laws, and data privacy rules.  

Partner with Service Provider

Companies can establish ODCs on their own or can partner with an offshore service provider with a solid reputation to manage and maintain ODCs. They help in various aspects like recruitment, administration, management, and other legal risks. 

Establish Infrastructure  

Setting up reliable infrastructure is essential to ensure the ODC operates efficiently. The infrastructure should be set up with all the requirements such as network connection, hardware, software, backup systems, power supply, etc. 

Hire Skilled Employees

Next comes the process of hiring skilled professionals such as software developers, project managers, testers, etc to create a team based on the goals and requirements of the projects and company culture.  

Setup Communication Channels

Setting up effective communication channels and tools for email, chats, and video conferencing with the ODC and in-house team is vitally important for communication regarding any issues, and delays, and keeping track of the work. 

Monitor Performance and Adjust Strategies 

It is crucial to monitor the performance of the ODC continuously to track and assess productivity, work excellence, timeliness, etc. Based on the data of performance the strategies are adjusted to improve productivity and profitability. 

Challenges Faced By Offshore Development Center 

Despite the benefits offered by offshore development centers it also brings in certain challenges for businesses in the realm of software development. 

Communication Barriers

Communication is the biggest challenge the ODC faces with the onshore team due to the lack of language proficiency. This may lead to poor project coordination and collaboration resulting in delayed project delivery. 

Different Time Zones

Different time zones are an ODC risk with the in-house team which conflicts when conducting meetings, deployed responses, and lack of real-time collaboration affecting the collaborative working environment. 

Quality Control 

Guaranteeing quality control might be challenging for ODC as there may be variations in quality assurance processes and testing procedures which will take hold of the overall quality of the software product.  

Security Risks

Transferring sensitive and confidential data between the onshore and offshore teams may instigate data risks. Thus implementing data protection policies and conducting regular audits might reduce the security risks. 

Final Takeaways

Establishing an Offshore Development Center is a strategic investment for companies and enterprises to witness long-term success. It has evolved as the best approach for businesses that aim to extend their services for software development needs most cost-effectively. ODCs play a pivotal role for companies in enhancing productivity reducing workloads, enriching profitability, and harnessing the power of top talents across the globe. 

Maticz is one of the leading software development companies that excels in offering cutting-edge software solutions at efficient cost and high profitability. We are packed with top-tier talents who have excellent technical expertise and experience in crafting bespoke software solutions that perfectly fit your business objectives and ensure delivery promptly. Take a big step in the digital race by connecting with us to develop responsive and cost-effective solutions. 

Have a Project Idea? Discuss With Us

Enquiry Submitted

Submit Necessary Details

Get Live Demo

Our Experts will Get in Touch

Enquiry Submitted

Submit Necessary Details