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How to Use Offshore Software Development to Gain a Foothold in New Market

The infamous Seth Godin recently stated, "To succeed in a crowded marketplace, you need to choose a remarkable application development company. You need to find a company that does something that makes them stand out from the competition. You need to find a purple cow."

Software outsourcing has emerged as an established strategy for businesses to achieve their key objectives swiftly and cost-effectively. The approach has helped companies overcome geographical limitations by discovering strategic partners worldwide and gaining competitive advantages, and sometimes it takes a purple cow. Nonetheless, outsourcing has not been devoid of challenges for everyone. Instances of coworkers encountering subpar or disappointing results after outsourcing their projects to distant companies are prevalent, especially concerning technology-related projects where excellence is imperative. So, one may wonder if offshore software development carries inherent risks.

Offshore software development is akin to hiring a professional local contractor versus an unknown contractor from another country for a home renovation project. So, business collaborations must be approached prudently by partnering with established and reputable entities. Let's go in-depth to understand outsourcing software development offshore and how it helps gain a foothold in the business.

What Is Offshore Software Development?

Offshore software development occurs when businesses outsource their work to a partner in a region at a different time zone than the company's headquarters. For instance, a European company may entrust a software development project to a partner in India. Understanding offshore outsourcing also involves considering the specific type of work the partner will offer. While these services are generally highly customizable and tailored to clients' needs and partner’s capabilities, offshore software services can be categorized into three categories, including:
  • Dedicated Teams - Dedicated teams are a time-bound engagement approach that allows companies to scale up their delivery capacity with contracted IT teams. Dedicated teams work as an extension of the client's project team, providing access to experienced engineers and using agile methodologies to develop software. It is an ideal choice for companies wanting to :
    • Get their software to market faster
    • Reduce the costs of software development
    • Improve the quality of their software
    • Increase their flexibility
  • Staff Augmentation - Staff augmentation is a business strategy that uses outside personnel temporarily to augment an organization's capacity. This can be done to fill skills gaps, meet project deadlines, or add more workforce to a team. There are several advantages of leveraging staff augmentation, including :
    • Add or remove staff quickly without the hiring and onboarding process.
    • Only pay for the staff you need when needed.
    • Access to specialized skills to accelerate projects.
    • Free up your in-house team to focus on their core competencies.
  • Project-Based Outsourcing - Project outsourcing allows organizations to collaborate with an external provider to complete all or part of a project. It is an ideal choice for businesses wanting to :
    • Get their project started quickly and move it through the development process fast.
    • Save your money on development costs.
    • Have experienced software developers with expertise in various technologies.

Did You Know?
Offshore software development has driven the growth of the global technology industry? Many renowned tech companies, including Microsoft, Google, and Apple, have relied on offshore development to accelerate their product development, reduce costs, and tap into a global talent pool. This approach allows companies to access specialized skills and expertise from different regions, leading to increased innovation and efficiency in the software development process.

The Co-founder of Microsoft, Bill Gates, once said, "The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency the importance of efficient processes in any business operation." The statement holds true for offshore software development, where the optimization of processes becomes even more critical, as geographic dispersion and communication complexities demand streamlined workflows to achieve heightened productivity and maximize the benefits of automation.

Is Offshore Software Development the Right Move for Your Company?

The Offshore Software Development Market, with a valuation of USD 122.2575 Billion in 2021, is forecasted to ascend to USD 283.4575 Billion by 2030. This projection entails a noteworthy CAGR of 10.13%, spanning the forecast period (2022 to 2030). This means offshore software development can be optimal for developing high-quality software products rapidly and cost-efficiently. However, it's essential to consider the following factors before making a decision:

  • Think About Your Audience and Potential Customer Base.
  • Who are you building the software for?
  • What features do they need and want?
  • What will make your product stand out from the competition?
  • Your Goals And Milestones.
  • What do you want to achieve with your software?
  • What key milestones need to be met to call the project a success?
  • Delivery Dates.
  • When do you need the software to be completed?
  • How will the offshore development company help you to meet your deadlines?
  • Mockups And Wireframes.
  • What does your ideal software product look like?
  • Create mockups or wireframes to give the development company a clear understanding of your vision.
  • Technologies And Skillsets.
  • What technologies will be used to develop your software?
  • What skillsets do the developers need to have?
  • Communication protocols and channels.
  • How will you communicate with the development company?
  • What tools will you use to collaborate?
  • Data Security And Transparency.
  • How will the development company protect your data?
  • What accounting and document-sharing platforms will be used?
  • Post-Development Strategy.
  • What services will the development company offer after software completion?
  • Will they provide support and maintenance?

These factors offers a framework for you to decide whether offshore software development is the right move for your company. Matching your company culture, the budget, the time-frame requirement, the in-house team, the extent of the project and the willingness of the management team to spend the time to find the purple cow among the options will determine success or failure. Most managers gravitate toward taking the safest possible route with current partners, ensuring the security of their own position, and do not consider new partners – these purple cows – when developing software to enter these markets. While there may be risks in bringing on a new partner, using the framework below to vet new relationships has a tremendous upside.

When is the Best Time to Outsource?

Navigating the decision to outsource your software development can be a pivotal step for your business. While there's no "One-Size-Fits-All" answer, understanding when to seek an outsourcing company's help can play a crucial role in the success of your project. Other than setting a rigid timeline, the decision to outsource is more about aligning with your business objectives as stated above. Whether you're an inexperienced startup or a seasoned corporation, outsourcing adapts to your unique needs and purple cows are out there if companies will take the initiative. Below are some key Indicators that will help you make the right decision.

  • Idea to Product: If you're holding a groundbreaking idea waiting to be transformed into viable software, outsourcing can fast-track your vision to reality. Collaborating with experienced developers can help you swiftly bring your innovation to market.
  • Resource Constraints: When your in-house team is stretched thin or lacks specialized skills, outsourcing becomes a strategic solution. External experts seamlessly supplement your workforce, ensuring your project maintains momentum.
  • Complex Projects: Complex projects, especially those demanding niche expertise, can benefit significantly from outsourcing. Leveraging seasoned professionals ensures the meticulous execution of intricate project elements.
  • Scalability Demands: As your business grows, the need for scalable solutions becomes evident. Outsourcing empowers you to flexibly adjust development resources as projects evolve without the overhead of permanent hires.
  • Core Focus Preservation: When your team should concentrate on core business activities, outsourcing non-core functions like software development can streamline operations. This strategic move frees your team to drive innovation and business expansion.

A framework to Consider Before Working with an Offshore Development Company

To maximize the results of working with an offshore development company, follow these five essential steps:

Offshore software development can be an optimal solution for enterprises pursuing excellence and efficiency. Businesses can develop exceptional software solutions by harnessing the capabilities of offshore development teams situated in regions with favorable labor economics. Nonetheless, navigating the path of outsourcing software development offshore isn't without its intricacies. It necessitates adept project management, communication strategies, and integration of collaboration tools to address challenges effectively. Also, by meticulously planning each step, offshore software development can bring optimum results for enterprises striving to etch their competitive footprint in the swiftly evolving digital realm… and you’ve found your purple cow.

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