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The benefits and possible risks of offshore development center (ODC)

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Statista claims that over 80% of the world’s top 500 companies prefer utilizing the ODC framework for software development. Ukrainian IT teams now deliver software development services for over 100 Fortune 500 companies. In this post, we will consider how to take advantage of ODC and minimize risks associated with remote collaboration with teams of IT professionals. Let us delve deeper into several highlights:

From the very start, our goal is to explain the term itself. An offshore development centre is not located in your country – it is a remote office with all the personnel and infrastructure needed to carry out a project from start to post-release phase. The collaboration model allows enterprises to incur less operational costs than running a similar team in more expensive renting premises. Alongside software companies and IT service companies, Data providers and IoT companies can also benefit from ODCs. By offshoring to Ukraine, for instance, you may decrease the development costs by up to 40%!

Offshoring is about specialization: the enterprise delegates certain business activities to an external party. It allows the company to concentrate on its core activities and expertise. 

Most of the time, offshoring implies international outsourcing; however, sometimes, companies offshore services without outsourcing. For instance, IBM offshores some work parts to its Ukrainian offices. Therefore, team members who send the work and do it belong to the same enterprise. There are two popular models of an ODC: the contractor ODC model, suitable for small companies, and the customer ODC way of collaboration based on the customer’s specifications or the main office.

4 outstanding offshore development centre benefits

offshore development center

Establishing an ODC is a chance to access a vast employee population worldwide. That is how you can reach the talented and knowledgeable talent pool overseas, so the search area of recruiting expands drastically. In addition, it is less time-consuming to hire a team in Ukraine and Poland than in the US. 

Building a separate IT department can be daunting if your company does not specialize in information technology. Delegating this particular work area to an ODC will save your time and nerves. As a result, you get a chance to channel the effort to other critical work processes. 

Non-IT firms tend to underrate risk management instruments. One of the primary responsibilities of an offshore company is managing risks and mitigating possible difficulties. Therefore, risk management becomes a shared responsibility: when agreeing on outsourcing a specific component, the parties think over a scope of actions to be done. 

Even though the term refers mainly to scaling in hardware infrastructure, the importance of auto-scaling can be overestimated in software development as well. For instance, when a company obtains a level of maturity, it isn’t straightforward to keep up working with the same group of experts. And so, you might be thinking about shrinking the team or switching positions and the roles of employees. It is usually relatively complex to manage to hire or modify your team, so more and more companies choose to delegate this responsibility to their offshore teams.

Setting up an ODC and dealing with challenges along the way

Software development centre

We’ve prepared for you an offshore development checklist to help you make up your mind about the sequence of steps you will be going through. 

Due to the high expertise of developers and reasonable salaries, Ukraine established itself as one of the most preferred countries for ODC. Back in 2020, over 212,000 Ukrainian IT experts were highly educated. The majority of them are fluent in English. To set up an ODC, you should turn to qualified HR who understands your business specifics and is aware of local laws and conditions. 

For a seamless business operation, you should locate all the resources (both human and technical) in one place. The perfect workplace encourages the time to do their best, enhances productivity and contributes to the team’s cohesion. In addition, the place has to be appealing to visitors and should give them an understanding of the company’s values and philosophy. Don’t forget about getting legal support.

HR payroll system and well-organized accounting are a must for offshore development centres. Ensure that your enterprise complies with regulations and hire employees to monitor the team’s performance. And when it comes to actual work on launching an ODC project, here is a list of things worth your attention:

Speaking about the risks of ODC, we cannot fail to mention these ones:

Choose a reliable partner, and you will be well-set for success.

Software development centre

PNN Soft provides clients with reliable software development. The company has 20 years of experience in creating highly efficient solutions, but we continually hone our skills to deliver advanced technologies. We have developed more than 1000 efficient and stable programming products for different business branches.

We are determined to seek innovative solutions that meet individual companies’ needs. That is why we know which technologies spell success for your business. 

PNN Soft uses Scrum and Agile methodologies to ensure constant customer communication and build a flexible manufacturing process. Our Agile teams of professionals include software developers, testers, GUI designers, technical writers, and managers.