9 Benefits of Offshore Software Development

If you’ve been following IT industry trends, you’ve probably heard the buzz about the benefits of offshore software development, and hiring development companies based in far-off destinations like Central Europe, Eastern Europe, or Asia. Many developing countries are becoming attractive destinations for offshore software development due to their growing tech industries and skilled talent.

Eastern Europe, in particular, stands out as a strategic region with strong technical talent and minimal time zone differences, making it ideal for collaboration with Western companies. Cost effectiveness is a key reason why companies are increasingly considering offshore software development.

But is it the right decision for you? What are the advantages of offshore software development, and how can you make them work for your next project? ProCoders will walk you through what you need to know.

What Is Offshore Software Development and How Does It Work?

“Fast, Cheap and Good. You can only pick two.” Yet, when CIOs take their development outside their market, for example, try Mexico software outsourcing, they generally find they can get all three. They can find world-class talent, usually with the rare skills they need, for far less than they would spend otherwise. And for the lower price, they can afford to hire more developers than they might have at home, thanks to lower labor costs and overall cost efficiency.

Simply put, offshore software development is the practice of hiring software engineers from outside your country’s borders. Offshore software development services are growing in popularity due to their cost efficiency and ability to provide access to global talent.

As more CIOs have started to compare onshore vs offshore software development, more and more of them have realized the benefits of working with offshore software development. This practice has spread to any IT development project that will take more staff resources than a company has under its own roof.

According to a report from Researchandmarkets.com, as of 2021, the global market for IT offshoring was valued at approximately $370 billion (USD) and was projected to grow to $454 billion by 2026 — a continuous yearly growth rate of around 4.2 percent.

With all the benefits of offshoring software development, it’s a trend that won’t be slowing down soon. Offshore software development trends show an increasing focus on cost efficiency and leveraging lower labor costs to maximize value.

There aren’t many true “win-win” scenarios in modern life, but offshoring may truly be one of them.

Companies that use IT consulting services are able to get the resources they need to continue growing and making profits, with the added financial appeal of lower labor costs in offshore destinations.

Outsourced developers get flexible, consistent work, the ability to choose their clients, and the opportunity to work on high-end projects around the world. IT consulting companies do well by connecting companies to the resources they need and democratizing access to any and all companies, regardless of their location. Offshore software development is a cost-effective solution for companies seeking to optimize their budgets. Everyone wins.

What are the benefits of offshoring?

The benefits of offshoring are many and will vary from company to company. But here are some of the reasons why companies choose to hire IT consultants outside their borders:

Companies can achieve cost savings by leveraging global talent and operational savings. Offshore providers can assemble dedicated teams that are fully committed and focused solely on the client’s project goals. Cultural understanding is key to ensuring smooth collaboration and project success with offshore teams.

1. Access to a Bigger Talent Pool

One of the biggest advantages of offshoring software development is the ability to tap into a global talent pool. By leveraging diverse talent pools, businesses get a strategic advantage through access to a wide range of tech talent from different regions. In-house hiring limits your options to local candidates, while offshoring opens up the world to skilled professionals with diverse expertise and experience.

Plus, the broader talent pool of offshoring helps to overcome the scarcity of specific technical skills that may exist in your local area. Offshore software development gives you access to highly skilled engineers and talented developers, making it easier to build a team of specialized experts tailored to your project’s unique requirements, resulting in higher quality output and overall success.

2. Flexibility in Scaling

Every business has varying needs for software developers at different stages of a project. Offshore development allows you to scale your IT development team to meet changing project demands, so you have the right expertise at the right time. For example, designers might be needed more in the beginning, while other specialists may be required later on.

Offshoring gives you the flexibility to adapt to these changing needs without the extra costs and time-consuming process of traditional hiring. By partnering with a reliable development company, you can plug in new experts as your project evolves and unplug them once their work is done.

This dynamic approach to team building allows you to maintain the right balance of resources throughout the entire project lifecycle.

3. Focus on Core Business

Another pro of offshore software development is the positive impact on the internal staff’s morale, especially in non-IT businesses like restaurants. While companies with an in-house development team may choose to scale their capabilities or manage larger projects by supplementing their internal resources, non-IT businesses can benefit from offshoring by not having to build or maintain such a team.

By offshoring the creation of, for example, a delivery app, business owners can avoid getting into the IT world themselves. Instead, they can leave the app creation to an experienced team and focus on their core business needs and day-to-day operations. This way, they can use their resources more efficiently, and non-IT businesses can still have access to the latest technology without taking away from their core competencies.

4. Targeted Staff Skills 

Hire offshore developers on a contract basis provides a unique advantage. Instead of worrying about an employee’s long-term career path or future responsibilities, you can focus on the present. Offshore developers enable you to assemble a specialized team with the exact skills required for your current projects. This approach streamlines recruitment and ensures the most efficient use of your staffing budget, while also considering soft skills when assembling your offshore team to ensure effective collaboration.

5. Cost Reduction

One of the major offshore software development benefits is the substantial cost savings it offers. The cost-effectiveness of offshore software development makes it an affordable and value-for-money option, allowing organizations to access high-quality talent at a fraction of the cost. App development cost per hour can vary significantly based on the location of your offshoring partner. By partnering with countries in Central Europe, such as Estonia, Croatia, Albania, or Portugal, you can save 50% or more on development costs.

These regions typically have lower costs of living, translating to more competitive hourly rates and lower labor costs, which directly contribute to lower development costs compared to those in North America and countries in Western Europe. For example, a CIO in the US who is used to paying $250 an hour for top IT talent may find a similarly skilled senior software engineer in Central Europe for only $50 an hour.

In addition to Central Europe, developing countries and regions like Latin America are also popular for cost-effective offshore software development due to their lower labor costs and growing tech industries. These cost savings can be reallocated to other essential areas of your business, with reduced labor costs and lower development costs being key drivers for choosing offshore destinations. You can find more information about offshore software development rates in our blog.

6. Faster Development and Quicker Market Entry

Offshore development really shines when it comes to speed of development and market entry. Offshoring companies provide a valuable resource – unlimited capacity. Working with an offshore development company can further accelerate the development process by leveraging experienced teams and efficient project management, which reduces time to market.

By partnering with the right offshore team, you can reduce your time to market by half and get a head start in today’s fast-paced business world.

7. No Costs and Administration

With internal hires, there’s paperwork. Performance reviews. HR procedures. Often, healthcare benefits and parental leaves are available. And all these things are important for your long-term staff. But with offshoring, all that administrative work and expense is eliminated. You simply pick your talent, add them to your workflow, and pay one fee every month. How easy is that?

8. Faster Recruitment

Hiring for an internal position can slow down your development by 3-6 months once you factor in the time it takes to approve a job description, get budget approval for the hire, post it for the allotted time, sift through resumes, do interviews, onboard and train an employee.

When you work with an offshoring company, you can have your development team assembled in days. In fact, at ProCoders, we can have your new offshored team assembled for you in 2 days to 2 weeks.

9. Time Zone Advantage

In some cases, working with IT professionals located far away can be an advantage. As your internal team wraps up their day, your offshore team is just starting theirs. This can result in continuous product development, effectively allowing your project to run 24/7 and increase productivity and speed up project completion.

Offshore Development Security

Data security is a top priority when it comes to offshore software development. You’re sharing sensitive business information and intellectual property with an offshore development team, so robust security measures are essential. A reputable offshore software development company will implement comprehensive security protocols, including advanced encryption, secure servers, and strict access controls to protect your data at every stage of the development process.

Plus, leading offshore partners adhere to international data security standards such as GDPR and HIPAA, so your software projects are compliant with global regulations. By prioritizing data security, you can outsource software development, knowing your intellectual property and confidential information are protected from unauthorized access and breaches. This security builds trust and ensures the long-term success of your offshore software projects.

Building Strong Partnerships: From First Meetings to Long-Term Success

The foundation of a successful offshore software development project is building a strong partnership with your offshore software development company. The initial meetings between your team and the offshore team are critical – they set expectations, clarify project requirements, and establish communication channels. During these early discussions, you need to outline your business practices, define deliverables, and ensure everyone is aligned on project goals.

A reliable offshore partner will have a proven track record, a team of skilled software developers, and a deep understanding of your industry. By being open and transparent from the start, you create an environment of trust that supports long-term collaboration. This leads to cost savings and higher efficiency and ensures your software development projects are delivered on time and to the highest quality. Investing in a strong partnership with your offshore team means ongoing innovation and business growth.

Leveraging Technology with Offshore Teams

Offshore software development teams give businesses a way to leverage technology and stay ahead in a fast-paced digital world. By outsourcing software development to an offshore team with the right skills, you get access to cutting-edge solutions like cloud computing, artificial intelligence, and augmented reality without the need for significant investment in infrastructure or training.

A skilled offshore development team brings technical expertise and experience with the latest tools and platforms so your business can tackle complex projects and keep moving forward. Offshore teams can help you integrate technology into your software products, streamline development processes, and deliver innovative solutions that set you apart from the competition. By partnering with an offshore software development company, you can embrace new technology and drive your business with agility and efficiency.

Risk and Compliance in Offshore Projects

Risk and compliance are key components of any offshore software development strategy. When outsourcing software development, you need to consider risks such as data security threats, cultural barriers, and financial stability. A reputable offshore software development company will have a risk management framework in place, including regular audits, compliance checks, and contingency plans for unforeseen issues.

Also, your offshore partner should be aware of the regulatory requirements of your industry and ensure all software development projects comply with relevant laws and standards. By managing risks and prioritizing compliance, you can minimize disruptions, protect your data, and maintain the integrity of your software projects. This will safeguard your business and build trust and reliability with your offshore development team for long-term success in your software development outsourcing journey.

Offshore Software Development for Startups During Economic Downturn: Yes-No Checklist

During an economic downturn, startups may consider offshore software development as a way to cut costs and grow. This yes-no checklist will help you decide if this is the right strategy for your startup.

Factors	Yes	No
Budget Constraints	Limited funding and need to reduce operational costs	Able to maintain development budget despite the downturn
Access to Talent	Struggling to find skilled developers locally or within budget	Already have a strong in-house team that meets your needs
Scalability	Need to scale development team quickly to meet changing demands	Current team size is sufficient for project needs
Flexibility	Looking for a team that can adapt to changing priorities and project requirements	In-house team is already highly flexible and adaptive
Time to Market	Need to speed up development process to maintain a competitive edge during the downturn	Confident in current development timeline
Communication	Willing to invest in effective communication tools and strategies to overcome barriers	Prefer to work with a local team to ensure seamless communication
Quality Control	Willing to establish processes and allocate resources to ensure quality of offshore work	Prefer to maintain direct control over software development quality
Legal and Regulatory Compliance	Prepared to navigate legal and regulatory requirements of working with an offshore team	Prefer to avoid potential legal complexities with offshore development

If you find that the benefits outweigh the challenges, be sure to select a reputable offshore development partner like ProCoders and invest in proper planning and communication to ensure success. When choosing the right offshore partner, assess their communication abilities (including your preferred language), developer quality, and potential for long-term collaboration.

How to Gain Benefits from Offshore Development with ProCoders?

ProCoders, an IT outstaffing company, specializes in creating tailor-made teams and providing comprehensive offshore software development services consisting of the best software engineers in Central Europe. Our professionals are fluent in English, highly experienced, and experts in their fields. By partnering with ProCoders, you gain access to a diverse talent pool that can address your development challenges effectively and deliver the best results.

Over the years, we’ve discovered that establishing clear development objectives and maintaining honest communication is crucial to harnessing the full potential of offshore software development. That’s why we recommend conducting a Discovery Phase to understand your unique business goals, determine your budget, and identify the number of developers needed to achieve your objectives.

Consider the skills, programs, and frameworks your outsourced staff should possess. What level of experience do you prefer? Would you like to manage your offshore talent directly, or do you need project managers and senior engineers to handle daily planning and direction? ProCoders will assist you in answering these questions before your development even begins.

We offer dedicated development team services, including building dedicated teams that are fully committed to your project goals, and staff augmentation services to ensure a flexible and customized solution for your project. The first one focuses on building a team of specialists who meet your project’s unique requirements, whereas staff augmentation definition is slightly different. It’s all about enhance your existing team with additional team members. By working with ProCoders, you can optimize your development process and achieve your business goals more efficiently.

Conclusion

Offshore software development provides a multitude of advantages that can transform your project’s trajectory, from cost savings and access to a diverse talent pool, to faster development times and the flexibility to scale your team as needed. Embracing the time zone advantage can further enhance productivity, ensuring round-the-clock progress.

Achieving success with offshore development requires a well-prepared strategy, a clear understanding of your objectives, and the right partner to help you navigate the journey. At ProCoders, we are passionate about showcasing how outsourcing can unlock your company’s full potential. Let us guide you through the process, starting with a complimentary consultation tailored to your unique needs. Connect with us today and discover the benefits that await!