What is ODC – Offshore Development Center?

The global outsourcing market amounts 85.6 billion U.S. from 2000 to 2018. And Statistica had forecasted that the global spending on software, including custom software, middleware, and application is estimated to reach 738 billion U.S. dollars in 2019.

The market has experienced a drastic jump in the last decade, especially in the last year. This is because the offshore software development center has proven to be one of the most viable investments in terms of digital transformation.

Let’s explore a little more on the dedicated Offshore Development Center (ODC):

1. What is an Offshore Development Center (ODC)?

What is ODC – An Offshore Development Center is a Software Development workplace located in countries like India, China, and the Philippines which provides a lower cost of software development services & living for the organization.

Offshore Development Center(ODC) is an IT outsourcing model that provides human resources or Staff Augmentation to the required organization to accomplish a specific goal.

An Offshore Development Center, basically, functions as a global extension of their organization that is more economical, commercially sane and provides top-notch product/service quality.

ODC mostly has all the professionals from dedicated developers, designers, testers, quality analysts, copywriters, administrators, and others to handle the entire product development.

So, the client organization doesn’t have to worry about any of the development. All the product development cycle is handled by the ODC, making them stress-free and buying them more time to focus on their core business functionality.

2. When should you start considering setting up an Offshore Development Center?

As there are several methodologies that can be opted for completion of your software development, but one of the most reliable and successful ways is to set up your dedicated offshore development center.

The three major signs that indicate you require an ODC are –

a) If your organization is looking for a specific or expert developer

In case, your organization wants a software being developed but you do not have the right talent or knowledge. Then you can always opt for a dedicated offshore development center.

An ODC is correctly equipped with the right resources, infrastructure, and has the capability to deliver a successful product, within a definitive timeline.

b) If your organization has a limited budget for software development

Offshore Development Center(ODC) is a great model to bring down your software development cost, significantly. As it provides the flexibility to hire expert developers at minimal cost with varying engagement model.

All-in-all, it gives the option to develop a top-notch product at a liable cost that has the capability to scale up your business, and down the operation based costing.

c) Global exposure

Offshore Software Development centers that are based on different parts of the world enables organizations being SMBs or enterprises to expand their hands in the global marketplace.

This also helps in diversifying the talent pool and reduce the overall costing on manpower, infrastructure, and gets you additional space for your global audience.

3. Which Working Model is ideal for Offshore Software Development?

Three most common yet crucial business models of ODC

• Fixed Cost Model / Retainer
• Dedicated Development Team Model

• Hourly/ Time & Material Model

(i) Fixed Cost Model / Retainer

The fixed Cost Model is one of the most simple and beneficial engagement models, ideal for small to medium-sized organizations.

In this engagement model, the offshore development costs are fixed, eliminating all the possibilities of any additional service cost or hidden costs.

Fixed Cost Model is most relevant for SMBs as they offer fixed budgetary, and contracting this model makes the organization feel safe from any kind of additional capital investment in their software development journey.

Advantages 

Finalized pricing  The client and the offshore development team knows the budget, prior.

Strict deadlines Preplanning on project delivery and unaltered timeline.

Predictability Easy to monitor the status of software development and predict if it working successfully.

No excessive supervision Little supervision is required on the part of the client rest is managed by ODC.

Disadvantages

Rigid Terms

In-depth Planning

Miscommunication

 Note: The fixed-price model is also great for small projects with limited features and clear requirements i.e. MVPs and projects with limited budgets and definite deadlines.

(ii) Dedicated Offshore Development Team Model

It is a team-based model that consists of all the sources of technologies, architecture, and platforms. A dedicated virtual offshore delivery center model is assigned to one project at a given time, which is great for developing some big volume or complex project.

It is for a long development process that lasts for a long time and required a dedicated team to accomplish it.

Advantages

Value  More value is added to the business model as expert professionals are added to the team.

Maintained Flow of Productivity  Large retention rate improvements result in reducing the conventional attrition or challenges

Quality  The Dedicated development team core team model means fast modifications and maintains the flow of productivity.

Disadvantages

Inefficient for short-term projects.

Requires carefully planning

Requires a considerable amount of time

(iii) Time & Material model

Time & Material model is used when the total work scope is uncertain and cannot be estimated. These kinds of projects cannot be assigned with dedicated offshore developers as the total scope is undetermined.

The volume of the work fluctuates as the software development process is in process. So, hiring dedicated offshore developers might not seem appropriate.

Time & Material model the client is charged for the actual amount of time and effort spent by the software engineers on the project realization.

Advantages

Flexible Requirements Work is divided into short sprints, making deliver faster.

Hourly Rates  Clients pay a stated hourly rate.

Transparency  Clients easily monitor progress on a daily basis.

Disadvantages 

Uncertain deadlines.

Undefined budget

Needs a lot of Management

Your Team in India – Our 3 Main Engagement Models 

4. How do you find the right vendors for offshore IT outsourcing development?

A generic checklist to find the right vendor for offshoring IT outsourcing development –

• Choosing the right location – Choosing the right location on the basis of the right talent pool, growing country, lower costs, infrastructure, expertise, and technology trends.

• Setting up a defined budget – Look for an ODC that suits your budgetary. While defining the budget, consider all the aspects from a number of resources to timeframe, aspects of development, and deployment for a specific amount. In case you want to calculate the cost of your outsourcing and how much you will save. You can try out our outsourcing cost calculator for an idea.

• Hiring the right offshore development team – For hiring the right offshore development team, it is important that you tally all the skills and experience of your dedicated development team according to your product requirement.

• Defining the rules and regulations – Prior to singing the contact with the ODC it is important that you also clearly list your guidelines, regulations, policies, and rules so that you are stress-free about the working conditions of your offshore development team.

• Clearly mentioning your goals – Define your goals, KPIs, and metrics to meet your expectations and budget. Explain your team what you want to accomplish and why. This gives out a lot of motivation to the hired dedicated developers and also gives clarity to your vision.

• On-going Communication – Enable your in-house team to establish an ongoing communication channel with your offshore software development center. Choose a team that is flexible with time zones difference and communicates on a daily basis, helping you in monitoring your project development.

• Security – Keep in mind to find a reliable offshore development company that keeps your company information safe and confidential.

5. What are the top benefits of the offshore development centre?

The benefits that can be achieved by outsourcing your software development are  –

• Low Development Cost -  Top Offshore Developers in India and other countries like Vietnam and Ukraine take much lower costs than developers in the United States. This leads client organizations to opt for countries that provide successful provide at a low cost. But is cost the only benefit to offshore outsourcing, or are there others? Yes, there are other benefits as well, which are listed below.

• Accessibility to Large Tech Pool-  The countries like Asia and East Europe have a large pool of tech talent that can be easily hired for the ODC in those countries. You have access to a large pool of tech talent in those countries and hire the most suitable candidate for your remote team.

• Improved Productivity -  Offshore Development Center (ODC) has the advantage of serving at two different time-zones, this reduces the time-to-market of your software product, fast-tracking the development cycle, and achieving a competitive edge on your competitors.

• No Infrastructure Cost -  Another important advantage is that clients do not have to pay for any of the infrastructural costs. Thus it is suitable for any kind of type and size of an organization.

6. What are some of the common Problems While Working with an Offshore Development Team?

1. Expectations Mismatch

It is very important to correctly recognize and match your client’s expectations, and deliver what he requires. Remember to clearly define your requirements to your hired offshore delivery center.

2. Cultural Gap

Lack of cultural diversity can be disastrous in an offshore development center. A team that can share holidays, cultures, festivals with the client can help lead to a successful and healthy relationship.

3. Threat

This is a common pitfall where the local consultant fails to foresee the upcoming challenges and threats while developing their client’s product.

4. Transition

The most sensitive period in any engagement is the initial transition period. The dedicated offshore development center should have a strong, well structured, and detailed commitment with its clients for a trustworthy relationship and successful product build-up.

5. Communication

The timing and level of communication should be well planned. There should be a clear channel of communication between you and your offshoring partner to encourage transparency.

7. How Do you Make offshore Development Successful For your Team?

Our Offshore Delivery Center in India applies various strategies to manage the uncertainty of our clients or potential challenges that we might face.

1. Develop Trust

We increase confidence by taking a more consultative approach to the marketplace; along with exploration of client scope and objectives to develop a proof of concept.

2. Additional Benefits

Highlight additional benefits that we offer as their extension in a global market, not just reduced cost, but efficiency increased resource availability, and top-notch delivery.

3. Cultural Gap

Conduct workshops to bridge cultural gaps and to improve mutual understanding. And work with partners with specific industry knowledge to mitigate gaps in knowledge regarding local requirements.

4. Communication

The timing and level of communication should be well planned. There should be a clear channel of communication between you and your offshoring partner to encourage transparency.

8. What is the Complete Process to Launch Your Dedicated Offshore Development Project?

1. Send your Pitch

Present your project details, vision, the main goal, and the provisional planning to your dedicated offshore development team.

Send them the important documentation, specifications, demo links that can help them understand your requirements. Next, a meeting will be organized with our sales team that will help you understand the entire development phase.

2. Define

In the next phase, our experienced team of technical consultants will work with you to set up the right team and the tech stack for your project. We will also define the roles of everyone in the team involved in your product development.

3. Select

After presenting the team of offshore developers, we will let you interview each and every developer individually so that you have clarity of your dedicated team of offshore developers who are working on your project.

4. Share your Authorization terms (if you have any)

Determine and share your security measures, such as who gets access to different parts of your project and who all are authorized to make what kind of decisions.

5. Establishing a Communication Channel

We will establish a communication channel and project management tools that will help directly contact with your developers.

6. Launch

Now your team is all set to start your development process. Our technical experts will closely work with your delivery team to monitor the status of your project. And on a weekly basis send you a progress report of your IT project.

9. Which are the Best Countries to Set Up an Offshore Development Center(ODC)?

1. India

It is not a surprising fact that Indian Developers/Programmers work at a fraction of a salary amount and yet delivery some of the most powerful and leading It products in the industry.

India is a huge nation with a massive young population that has the best software developers in the world. The pricing is not the only aspect that makes India an ideal location for setting up your Offshore Development Center.

Their capability to develop top-notch products by writing in good code has proven them exceptional in the marketplace.

An average annual salary of Developers in India

           Source: Towardsdatascience

Additionally, India stands out in the mobile app development category as well. In fact, India has the largest population of mobile app developers in the entire world.

Source: Towardsdatascience 

2. China

China has a lot of workforces which are both cheap and reliable developers. They are known to be extending their work shifts from 12 to 16 hours.

Their software industry is also way cheaper than the United States. An entry-level programmer in China is 30 to 40% less expensive than the United States of America.

But the biggest challenge that China has is sealing the security turnouts. There is a lot of news about data breaches in China, making it a little, not a preferred country to outsource IT projects.

3. Ukraine

Despite a lot of governmental issues going out in the country, Ukraine has been a choice of a lot of developed countries to outsource their IT outsourcing work.

Ukraine has been ranked as the largest of any Central or Eastern Europe Country. This is because there are over 900000 IT professionals in the country.

To know about some more countries and their developers’ packages you can read our blog, “Which are the Top Locations to Set Up an Offshore Development Center?”

10. Why Outsource in India?

India has one of the largest Information Technology sectors and also equips the biggest pool of IT talent. The country has produced highly skilled developers, consultants, and engineers, who have been rated as the best resources in the world.

Even though India has such great talent, salaries still remain much lower than the United States and Europe. And countries consider India to be the best fit than China, Russia, and the Philippines.

Indian developers are experts at developing and designing complex systems design. Their capability serves well in applied fields of software engineering.

Some more reasons why India is a popular Offshore Development Center destination:

• Availability of huge talent pool
• Accessibility of programming specialists
• Low labor costs
• Technical excellence
• Research & Development
• Experience with complex projects
• Adaptive culture
• Availability of local professional organizations.

India remains the largest provider to the critical North American and Western European buyer markets for outsourced services.

Offshore development centers in India are reporting 45 to 60 percent annual growth. Gartner Group predicts that within two years, 40 percent of its clients will spend up to two-fifths of their legacy budgets on offshore outsourcing to India.

India is up on the innovation curve 

“India has evolved from being the IT, services and business process outsourcing hub of the world to being a significant R&D center for multinationals and many Silicon Valley startups”.

Presently, we have seen an entire product line that can be easily developed, designed, and delivered entirely from India. A lot of multinational organizations, such as Cisco, GE,  have shifted their R&D, development, and operations to India.

India is currently been seen as a prominent place to grow your digitally transforming business, be it B2B or B2C.

11. Why Choose Your Team in India (YTII)?

Your Team in India is an initiative to bring world-class offshore IT services at cost-effective prices for global businesses of all sizes.

We provide IT Staff augmentation and IT resourcing services, where we staff, manage and support offshore development teams based on our client’s requirements.

Our services include:

• Providing certified and experienced developers
• Client’s Team management
• Offering State-of-art-infrastructure in terms of hardware and software

Why Choose Us?

Choosing Your Team in India means accelerating your business growth with ‘0’ setup-investment. Partnering with us will give you –

• A Global Outreach – We will help you expand your organization by providing dedicated Indian offshore developers.

• Unique work Methodologies – Working with us gives you the choice to bring about your own corporate methodology and management techniques.

• Quality – Top-notch product quality as the developers that we provide have years of experience and do not work from home.

• Cost-effective – Reduced expenses of entire software development cost.

• Scalable – You can quickly ramp up or downscale your team, any time, within hours.

• State of the art infrastructure –  High-end facilities for designing, developing, testing and building a range of with the latest software.

To Conclude 

Setting up an offshore development center in India offers a lot of major benefits for companies of all sizes and kinds.

While there is no single answer as to where and how companies should establish an ODC, making informed decisions as given in this blog, you can get help to establish one of the greatest values.

To know more in detail about our services, engagement models, technology stack, and the kind of developers we provide, you can get in touch with us at info@yourteaminindia.com.

Share with us your project requirements and ideas and we will get back to you with a detailed proposal that matches your needs.

This content is a syndication of the blog originally posted on Your Team in India.