Successful startups are built on strong, common ground: talented resources who help shape, build and transform a business idea into a reality. These resources can range from engineers, software developers, project managers, testers, business analysts, data scientists, and more, all of whom can be based anywhere in the world.
After the challenges the IT industry, and every industry for that matter, faced in 2020, many organizations were prompted to adopt and embrace new ways of staffing their projects. With the entire world going remote, it began to make even greater sense to hire offshoring resources that could provide services with no ties to a physical location.
Offshoring is no longer a trend, but a legitimate way of generating more business opportunities and value without breaking the bank. This is especially attractive for startup operations as budgets can be tight and it’s important to make every dollar count, especially in the early stages of your startup company.
On top of costs, it’s also crucial to hire top-tier talent that can meet the modern business demands of the industry along with information technology trends. It’s safe to say that it’s virtually impossible to find all the talent your startup needs in a single location and at good value; talent is everywhere, so why should you limit your startup to geographic barriers?
In this blog post, we’ll be unpacking how startup organizations can not only benefit from hiring offshore resources, but thrive by hiring the best available resources no matter where they’re located, giving a competitive edge in terms of support, costs, risk, and skills.
Let’s dig right in!
What is Offshore Software Development?
Aspiring startups know that skilled software engineers are crucial to the success of their product or service, yet it can be really hard to find top-tier software engineers that are available or open to new opportunities.
Outsourcing is the answer for companies looking to tap into the best tech talent budgets can afford, giving them an upper hand to streamline the software development lifecycle with resources that are already very knowledgeable on the subject and that have a variety of projects under their belt.
Without embellishments, offshore software development consists of moving the software development process of your software projects to a country where production costs are lower.
Now, for a little trip down memory lane, let’s take it back to the 1980s where Accenture, formerly known as Andersen, which was popular for taking unstructured system requirements from clients and turning them into a working system for millions of dollars. While the term outsourcing wasn’t exactly used for this practice, Andersen was known for training consultants in software development similar to what today is known as the Waterfall methodology.
Fast forward to the mid and late 1900s where India-based firms began to take projects offering programmers, system analysts, and project managers for a fraction of what US firms were charging. While they weren’t taking a bite of the large-sized projects yet, Indian firms began to set a precedent as highly-skilled, highly available resources. As the year 2000 was getting closer, and lots of companies were getting their systems ready for Y2K, offshore resources became the answer for many looking to get better costs.
Twenty one years later and things have evolved greatly. Now, project-based outsourced software development is more Agile than Waterfall, and India, while still one of the strongest countries to offer offshore software development solutions, is no longer the only country that offers these types of services as many others are beginning to earn a well-deserved reputation for reliable software outsourcing destinations. Eastern European countries like Ukraine, Poland, or Belarus are among the top outsourcing destinations. Latin American countries like Mexico, Brazil, and Chile also house large concentrations of software developers and are increasingly becoming a hot spot for outsourcing. In Asia, China and the Philippines are right behind India as the top countries that offer professional developers.
Comparison of Offshore and In-house Software Development
The decision to turn to offshore solutions for software development mainly stems from wanting to lower costs, as many companies are faced with constantly dealing with budgetary constraints. Building a software project from the ground up can be an expensive endeavor, so offshore resources are often the best path to follow.
Choosing between investing in an in-house team of software developers or outsourcing software development to an offshore company is based on several criteria like budget, complexity of the project, and time to market, to name a few. In-house teams of engineers work in the employer’s facilities, making it a seamless workflow that offers a greater perceived control over project customizations, giving organizations direct control over picking and choosing the required skill levels that engineers must possess for a unique project.
Offshore software development is a no-brainer if you’re looking to hire a wide range of expertise in software development tasks at a fraction of what you’d typically pay if hiring everything in-house. Offshore software development centers offer virtual services and remote employment so clients benefit from uninterrupted support and a streamlined process with their team extensions. Offshore software development allows companies to tap into many different areas of building a software product or service such as artificial intelligence, machine learning, data science, etc., all of which can be hard and expensive to find in a single geographic location.
If your organization chooses to go with the in-house team direction, you need to be prepared to pay for a premium as in-house teams are more expensive to build and maintain. Oftentimes, companies look at in-house teams as a means to have similar language and cultural background, thus speeding up software development but with how interconnected the world is nowadays, this can be virtually achieved anywhere in the world. While offshore software development centers are typically in non-English speaking countries, professionals almost always speak the language fluently to communicate effectively with clients.
Here’s a comparison of offshore and in-house software development across several areas:
- Costs. It’s a lot more expensive to recruit, train, hire, onboard, and grow an in-house team of developers than offshore software development resources.
- Breadth of specialized skills. Hiring in-house engineers can prove challenging when you’re talking about different skill sets needed for a project. For instance, Data Scientists or an engineer specialized in a specific programming language are not that easy to come by and it may be the case that you don’t find a suitable candidate in your region, which is not a problem in offshore centers where they can easily access their pool of resources across the globe and hand clients the right professional for the specified task.
- Communication. Many believe that in-house teams possess inherently better communication because they have direct access to other owners of the software development process. While this may be the case, it’s also true that the pandemic truly broke down a lot of barriers in the regard that nearly everyone went remote, so virtual communication became the norm which is something that offshore software developers were already experts at, making it easier to communicate with clients, teams, stakeholders, etc.
- Timezone and language. While in-house teams seem to have the upper hand in this area, it’s also worth mentioning that offshore developers give clients the ability to offer support around the clock. Also, as stated earlier, the current health crisis pushed in-house employees to go remote as well, putting everyone in the same square when it comes to communication.
Advantages of Offshore Development for Startups
Every startup is different, but they’re all in search of the best talent. When weighing the pros and cons of accessing the talent pool of offshore software development, startups have a lot to consider. This process can be easier by doing research, reviewing portfolios, or reading case studies to see what best practices apply to your unique situation. After looking at the hard facts, it won’t be difficult to see the many benefits you’ll gain by engaging with a software development company, mainly in the budget department.
Here are some of the top advantages of working with an offshore software development company for your startup:
- Money. Startup companies are typically looking for every way possible to lower costs and hiring an in-house team of software developers can be a luxury that you simply can’t afford at this stage of your company. By hiring an offshore software development company, not only do you significantly lower the costs of developing your product or service, you also access a pool of resources that would otherwise be virtually impossible to achieve if you were to build an in-house team of developers.
- Performance. Offshore software developers work with lots of projects that give them exposure to new technologies, methodologies, ways of doing business. All of this adds to their skill set, making it easier to perform better and improve your project’s efficiency. When choosing a competent vendor, you can get a holistic software development approach to your project that includes consulting, analytics, testing, UI/UX design, project management, and any other service your startup will inevitably need.
- Flexibility. Startups thrive on flexibility, so it’s important to have a team of developers that easily adapt and respond to changing business and market demands. If you were to have an in-house team, it’s traditionally more time consuming to ensure everyone aligns to a specific goal or find the right candidates that can meet the needs of a specific technology. By putting the software development tasks in the skilled hands of the right offshore team can significantly free up your time so you focus on other vital areas of your startup like Marketing, Financials, searching for investors, go-to-market strategies, and more. What’s more, offshore software development teams offer reliable and dedicated professionals who have proven expertise and knowledge on unique technical areas that can make your product or service more effective, all within an agreed-upon deadline.
Checklist for Hiring an Offshore Development Team
Okay, so you’ve decided that what’s best for your company is to go with an offshore development team...but how do you choose the best one? Worry not! We’ve prepared a handy checklist that you can use as the basis of your selection process to land a quality vendor who will take your project and needs, and make them a priority the way you need them to.
- Build a robust, specific job description of the type of professionals that you need for your software development project. By delineating specific parameters, it’ll be a lot easier to find vendors that have professionals who fit the bill.
- Perform background checks for legitimacy.
- Look at the vendor’s track record and industry reputation. See how many clients they’ve worked with, the size of the clients they’ve worked with, and the type of culture they promote. Are employees happy? Employee satisfaction says a lot about the success and wellbeing of a software development vendor.
- Ask about similar projects and how long it took them to deploy successfully.
- Read case studies of similar startups to your own to see the vendor they used and why it worked for them. By looking at other clients’ real data, you’ll get a clearer picture of the type of vendor that can suit your startup’s needs.
- Compare prices between at least 2-3 vendors to get an idea of the average pay. Consider that specialized roles will incur in slightly higher salaries, so be mindful of the project requirements so the vendor can assign the right roles to your startup.
- Ask about the vendor’s style of work, methodologies they most often employ, and some of the latest technologies they’ve worked with.
- Confirm the typical cadence to show MVPs, prototypes, or demos so you get an idea of what to expect for your project.
- As offshore teams are an extension of your team, confirm with vendors that you’ll hold total control over development.
- Confirm the type of communication channels they use to guide a project to completion.
Freelance Platform or Outsourcing Software Development Company?
As of late, hiring software developers under a freelance model is gaining popularity. Without the legal ties of a contract to a major outsourcing software developer, startups are tempted to go with the freelancing route but it can easily backfire if not done properly as it’s more complex to confirm the legitimacy and reputation of a freelancer.
While it’s true that software developers of offshore companies can cost a little bit more than freelancers, it’s also true that freelancers can’t guarantee their work in your project or maintenance after project completion. In short, outsourcing software developers give you a significant and tangible upper hand in terms of security.
Freelancers, thanks to their self-employed nature, manage their time based on the amount of projects they perceive they can undertake at a given point in time. When choosing to outsource software developers, the vendor has a management team that carefully assigns resources to a project based on their skills, expertise, and availability, so as not to overload them and give the client a satisfying end result.
What’s also worth mentioning is that in an outsourcing model, it’s easier for developers to access numerous resources and technologies, making it easier and more effective to guarantee high-performing software products or services, which is not the case with freelancers. Freelancers rely on their own equipment to get the job done and are best suited for small, specialized tasks rather than a full-fledged project like a startup.
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