Offshore Software Development: Key Benefits, Risks, and Best Practices

Offshore software development could be the right choice for you, if you’re looking at cost-effective options to expand your team and tap into the global talent market. As with any talent strategy, there are both benefits and risks involved. Let’s take a look at advantages of offshore software development and some offshore development best practices to keep in mind. There are talented individuals all around the world; building your team with a global perspective will yield great results and will diversify your community.

Let’s get started with some definitions.

Different Models

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1. Offshore

“Offshore” is exactly what is sounds like – we’re talking about a different country. Offshore hiring describes recruiting talent in foreign countries, often on a different continent than your homebase and a different time zone. Time zone, language, and cultural differences will also arise in offshore development. Offshore hiring can give your company 24/7 capabilities, as different subsets of your team are awake at different hours, “following the sun.” Offshore hiring also expands your talent pool as you are no longer restricted to your physical city.

2. Onshore

Onshore is the kind of hiring you are used to. Employees are in the same geographic area as the hiring company, there are no hidden costs or surprise fees, interactions are often in person, and language barriers do not exist. Although, the pool from which you are drawing is significantly smaller, which is why weighing the pros and cons of each model, within the context of what would be best for you and the work you do, is essential. Many teams are built through a combination of all these models!

3. Nearshore

And nearshore hiring is the in-between strategy. It describes hiring those within a close proximity to the hiring company, yet time zone and cultural differences may be present. You may not necessarily be looking at a different continent, but meetings will probably be remote, and you will have a slightly wider talent pool than looking onshore.

Offshore vs. Outsourcing

The terms offshore and outsourcing are sometimes used interchangeably, but there is a difference. Offshoring is a subset of outsourcing, which encompasses onshore and nearshore as well. Outsourcing is the umbrella term describing expanding a team’s reach and adding team members to projects as needed. Offshoring is a version of outsourcing, which specifically talks about geographic location. You can outsource labour to others close to your homebase or on a different continent.  

Offshore software development could be the right option for you if you are looking to expand your team, outsource project-based tasks, and tap into the wide world of talent. Before you begin, it’s important to know the benefits, risks, and best practices to ensure offshoring goes smoothly for you.

Benefits:

Let’s take a look at the benefits of hiring an offshore software development company, and hiring individuals around the world.

Cost

The most quoted offshore software development benefit is cost-effectiveness. When sourcing talent in countries with lower labour costs, you are still getting quality of work but for a fraction of the price. You also save on overhead costs, and you have the freedom to scale up or down depending on the project. Offshore development comes with the ability to hire contractors and workers for each project, which is more cost-effective than hiring full-time employees.

Access to Global Talent Market

There are no restrictions when it comes to talent. Expanding your view from just your home city to every city around the world optimizes your chances of finding the perfect additions to your team. Now with the technology allowing work to continue – and thrive – with ease, geographic location is no barrier. Offshore software development opens new opportunities and also allows for people to not be restricted by their country, and find work wherever they please.

Flexibility

Offshore development allows you to add team members as needed, scale up or scale down, and remodel your schedule in any way you can imagine. We are no longer restricted to an office or even a city; tapping into the global talent pool allows you to build your team how you want, and structure how work gets done in a way that aligns with each time zone and shifting calendar.

Efficiency

Offshore development gets things done quickly, as does hiring project-based employees. If you need to get something done now, and you don’t have all the time in the world, offshore software development is probably the way to go. Your time to market will decrease and you can move on with the many arms of your business working in coherence.  

Focus on Core Business Functions

Adding team members where needed, who are experts in their fields and deliver high-quality results, allows you to focus on core business functions that may otherwise be pushed aside. When you build the best team around you, utilizing every opportunity at your disposal, your day becomes more efficient and productive.

Risks and Best Practices

With every risk, there is a lesson and a best practice that we can draw from it. Let’s break down what to keep in mind and how to build the perfect global team.

Security and Legal Compliance

When hiring in other countries, it is especially important to do your due-diligence, which is best achieved when partnering with a global talent partner, like us! Different countries have different hiring laws that you need to follow that include labour laws, tax regulations, data privacy, and employment contracts. Ensure you have every detail finalized before hiring outside your homebase.

You also want to ensure that your hired employees are following the rules. Keep your cybersecurity up to date, have policies in place for working outside of the company’s home country, and have security specialists working within your organization as well.

Quality Control

When offshoring development, project management looks a little different. Often you are presented with the final product, and most of the work is done without your careful eye. Ensure that you are receiving quality work. This starts with hiring the right people. You then need to make sure everyone’s tasks are clearly stated and everyone has the support they need. Performance reviews, meeting catch-ups, and proof of work are good places to start, keeping a manager’s eye on the work being done, while trusting those you hired.

Communication

As mentioned, offshore could encompass a different continent, bringing different languages, cultures, time zones, and methods of communication to the table. The first step is always education. Educate yourself on cultural differences that exist within your team, as well as how each culture is comfortable communicating. There are many tools available to streamline asynchronous work across different time zones, and make sure to capitalize on moments of overlap. For more tips on global team coherence.

Hidden Costs

Even though offshoring is the most cost-effective method, there may be some hidden costs that sneak up on you, like coordination expenses such as using new platforms to streamline communication, legal and regulatory expenses, quality assurance and risk mitigation, and other costs associated with hiring in a foreign country. Make sure you are aware of all the details before the work begins, and that the final total is still within your budget.

The most important part of offshore development is partnering with the best global talent experts that can lead the way, source the best hires, and help you manage your diverse team. Poly Tech Talent is based in Canada, but we hire around the world! Reach out to us for our renowned offshore software development services. With every hire we intend on showing people that quality work exists around the world, you just have to look for it.

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