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What is an offshore software development company?

Offshore software development is a practice increasing in popularity across the world. Due to how competitive and fast-paced the software market currently is, businesses worldwide are always thinking of ways to get ahead. When it comes to software development, a way to get ahead is to call in resources from outside your own country and move the development process further afield.

There are two sub-topics within offshore software development, offshore outsourcing and offshore team development. These are two different and distinct ways in which people use outsourcing methods to meet their software needs. 

In this blog, we are going to explore this further, starting by clearing up these two sub-topics and answering the question, “what is an offshore software development company?”

Offshore outsourcing

Outsourcing is the practice of hiring an external team to complete your development work. Companies often outsource their software needs to a nearby software development company to help them design, build, and implement a new site, app, or server that they want. Other companies will outsource this work further afield to an offshore software development company in a further-away country. 

Companies do this in order to cut costs, widen their talent tool, and get a head start on their market debut. In an over-saturated tech market, these benefits can be the difference between success and failure for certain companies. 

With offshore outsourcing, the development team you use does not become part of your own company. It is a form of contracting, often used for short-term and time-limited projects. 

Offshore software development, however, is a different thing entirely. Let’s discuss that next. 

Creating an offshore software development team 

Offshore software development can also include the practice of creating your own development team, as part of your own company, in an offshore country. These employees are on your payroll and are part of your workforce. This option would be used more for long-term development projects and infrastructures. 

Companies often opt for this option for the same reasons we mentioned above. It is cheaper, you can access a much more diverse talent pool, and the development life cycle can progress much more quickly as you develop a more robust team. 

Salaries vary greatly depending on country and region and so the rate for developers, engineers, testers, and other roles can be significantly cheaper than in your country of origin. This often means that when you are creating an offshore software development team, you can hire multiple people for the same price as one developer in the UK. 

Cutting such costs and developing so quickly can help companies launch their products into the tech market at a quicker pace. Helping them enter the market earlier also helps to beat the competition and turn a profit at an earlier milestone. 

Pros and cons of an offshore software development company 

Offshore software development won’t always be the right decision for you and your company. There are two sides to consider before you make any decision, and it is important to get a full perspective on the topic.

With that being said, let’s look at the pros and cons of offshore development. 

Pros 

  • Cost-saving
  • Time-efficient 
  • Wider talent pool with diverse skill ranges
  • Bigger development team established quickly 
  • No internal hiring/firing costs (outsourcing)
  • No physical space needed for extra employees

Cons

  • Cultural differences, especially in communication and language
  • Time zone differences
  • Differences in laws and regulations 
  • Potential issues with security 

When handled in the right way, taking careful consideration of differences and cultural sensitivities, offshore software development can be a very beneficial thing to your company. Whether you opt for creating your own team abroad or outsourcing an already-established offshore company will depend on your business needs, budget, and upcoming projects. 

Either option will be cost-saving and time-saving, so if those are your company priorities right now, you might be onto a winner with offshore options. 

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