Essential Offshore Software Development Best Practices Explained

Starting a tech company is challenging, especially with rising costs, evolving technologies, and fierce competition. Offshore software development has become a go-to solution for startups and corporations looking to achieve their goals efficiently. The global managed services market, valued at $161 billion in 2021, is expected to surpass $300 billion by 2027, highlighting the growing demand for offshore services.

Amid economic uncertainty and extended timelines for raising investments, startups are prioritizing cost-cutting and profitability. Offshore software development offers an affordable, high-quality option, enabling businesses to sustain growth and continue innovating. This article explores key tips, offshore software development best practices, pros and cons, top destinations, and the costs associated with offshore development.

I. Offshore Software Development: Pros & Cons

Offshore software development has gained traction as Western nations face a talent crunch, driving companies to tap into talent-rich, cost-efficient regions. While this approach offers significant benefits, it’s crucial to weigh the advantages against potential challenges before engaging an offshore IT partner.

Pros & Cons of Offshore Software Development

Pros of Offshore Software Development

1. Cost Savings
   Offshoring to regions with lower living costs significantly reduces development expenses without sacrificing quality. For instance, while a US software developer earns an average of $97,763 annually, a developer in Eastern Europe may earn just $36,000.

2. Scalability
   Offshoring provides flexibility in team size, expertise, and duration of collaboration, allowing startups to scale resources up or down based on their needs without the burden of permanent payroll commitments or employee benefits.

3. Access to Global Talent
   Offshoring broadens your hiring scope, giving you access to a diverse pool of IT experts. Whether you need Node.js specialists or niche programmers, outsourcing ensures you find the right talent.

4. Focus on Core Business Activities
   Outsourcing software development frees up the founding team to focus on marketing, PR, and other core functions, streamlining the path to a successful product launch.

Cons of Offshore Software Development

1. Time Zone and Cultural Differences
   Working with teams across continents often entails managing significant time zone gaps and cultural disparities. For instance, collaborating with developers in China means navigating a 12-hour time difference, which can complicate communication.

2. Management Challenges
   Without face-to-face meetings, maintaining clear communication becomes critical. Defining project requirements, milestones, and progress tracking upfront is essential to mitigate risks.

3. Transparency Issues
   With limited control over an external team, concerns about software development processes, data security, and team motivation may arise. However, choosing vendors with transparent practices, like open communication and regular updates, can build trust and reduce misunderstandings.

II. Best Practices for Offshore Software Development

Maintaining an in-house IT team that has expertise in the latest technologies is challenging and costly. Outsourcing means you don’t have to invest in IT infrastructure or spend time recruiting, hiring, and training employees. With an offshore partner, you gain access to a massive pool of skilled talent capable of delivering the software services you need.

Here are the ten offshore software development best practices that can help you maintain and improve offshore software development efficiency:

1. Carefully Choose Your Partner

Choosing the right team is one of the stepping-stones to successful offshore software development. Explore all available options and evaluate the prospective providers. Choose a partner who understands your business needs, has prior experience in your industry, and employs robust project management methodologies. Always check for references, understand their communication model, and carefully study their SLAs.

2. Always Stay in the Loop

An offshore project should never be a select-and-forget solution – although it is good if your offshore software development partner can work independently, it is always a good idea to stay in the loop. A healthy dose of collaboration is essential for updates about the current progress of the project, and for understanding issues or concerns. Assign an individual or a team who works in close tandem with the provider and achieves business goals together.

Offshore Development Best Practices

3. Be Clear on Expectations

When crossing any organizational boundary, a mismatch in expectations is common. What is considered good or acceptable by you, might not hold true for your offshore software development partner – especially in aspects such as quality, security, and user experience. Document everything in detail, be clear on the expectations, and improve the speed of delivery, ownership, and subsequently quality. Share values instead of documents in order to ensure expectations are well understood.

4. Agree on Ownership of Application Architecture

Having another team dictate application architecture can be disempowering. If your offshore team is not allowed to make important architectural decisions, their engagement and feeling of ownership is most likely to be lowered. Agree on the ownership of application architecture from the beginning, and witness a steady increase in process efficiency and software performance and quality.

5. Employ a Build-Operate-Transfer (BOT) Model

A BOT model enables you to offshore all your development work while you concentrate on your business. By offshoring your software development, you can achieve significant cost savings during the initial development stage. As your product reaches maturity and starts bringing in sufficient revenue, you can transfer the team to an entity of your own.

6. Account for Time Zones

While offshoring software development across several time zones, it’s possible to end up with only an hour or two of overlapping working hours each day. Make sure there definitely are overlapping working hours, and ensure decisions are taken, and issues are resolved within budget. Be aware that you will need to adapt your workflow to accommodate a small overlap in time.

7. Encourage Shared Values

When local teams have strong values and distinctly different working styles or professional etiquettes, there can be challenges in sharing those values with the offshore teams. This may lead to frustration when working with a remote team that has a dramatically different style. Make sure your offshore software development partner is culturally alike, with a similar approach to work – if not the same. Encourage teams to collaborate with one another, and work together to reach shared solutions.

8. Communicate Frequently

In order to get the most out of the partnership, it is best if the onshore team lead communicates to all offshore developers— not just the offshore team lead – around once a week. Often, such direct communication with the offshore developer helps in identifying issues earlier rather than later. Look for ways to build a relationship with the offshore team through social and collaborative activities.

9. Develop Small, But Skilled Teams

When it comes to team size, the smaller the better – a small team of very highly skilled offshore developers will be more effective than a larger team of average developers. If the offshore team starts growing in size, split it into multiple teams and identify a team lead for each of the small teams to get the required accountability, visibility, clarity, and focus on the development process.

10. Reuse Components

Reusability is an important characteristic of a high-quality software component. By building a library of frequently used components, new software can be developed quickly from existing components, enabling greater schedule and effort savings. Create a repository to store reusable components – not just code components, but also design, data, documentation, test materials, and specifications.

III. Top Countries for Offshore Software Development

So, where should you look for the best offshore software development companies? As the demand for IT expertise continues to grow, several regions have emerged as prime outsourcing destinations, offering a mix of affordability, talent, and reliability.

Eastern European Countries

Eastern Europe, with countries like Ukraine, Poland, Belarus, and Romania, has become a hub for IT outsourcing. This region strikes a balance between cost-effectiveness and quality, providing skilled talent with cultural and language compatibility, as well as time-zone convenience. While Eastern Europe may not match Asia in terms of pricing, its reputation for delivering consistent quality, effective communication, and timely project completion makes it a popular choice.

Top Countries for Implementing Offshore Software Development Best Practices

Asian Countries

Asia has long been synonymous with IT outsourcing, thanks to its vast pool of over 4 million IT professionals capable of handling projects of any scale. The cost advantage remains a significant draw, with app developers in countries like India earning an average salary of just $20,000 annually, far below their US-based counterparts.

Among Asian destinations, Vietnam stands out as a leading choice to implement offshore software development best practices. Known for its competitive pricing and a highly skilled workforce, Vietnam has gained recognition for producing top-tier software experts at a fraction of the cost. Its growing reputation is built on robust technical education, government support, and a strong commitment to meeting international standards, making it a favorite among global companies seeking quality and affordability.

South America

Proximity to the US makes South America an attractive outsourcing destination for many North American startups. Countries such as Brazil, Argentina, Chile, Colombia, and Mexico have carved a niche in IT outsourcing.

Argentina, in particular, has emerged as a preferred destination due to strong government support, a highly educated workforce, and a thriving tech ecosystem. The country’s lower salary rates and cultural similarities with US-based clients further bolster its appeal for nearshore outsourcing.

IV. Key Challenges Companies Encounter When Hiring an Offshore Development Team

Before exploring offshore software development best practices for improving onsite-offshore communication, it’s crucial to recognize the typical obstacles businesses face when collaborating with offshore teams. Identifying these challenges early on allows for strategic planning and smoother project execution.

Below is an overview of the most common issues companies encounter when working with offshore development teams:

Effectively managing an offshore development team starts with addressing these potential roadblocks. By fostering transparent communication, aligning cultural expectations, prioritizing data security, and carefully vetting vendors, companies can transform these challenges into opportunities to build stronger, more productive partnerships.

Conclusion

Offshore software development offers businesses a cost-effective way to access global talent, scale efficiently, and stay competitive in a fast-changing market. By following offshore software development best practices, companies can overcome challenges like communication barriers and cultural differences, ensuring a smooth and successful collaboration.

At TECHVIFY, we specialize in providing high-quality, tailored software solutions to help businesses innovate and grow. Contact TECHVIFY today for a free consultation and discover how we can support your success through expert offshore development services.