Last Updated on 3 months
Successful startups are founded on a strong, shared vision, and require talented resources to transform that vision into a reality. These resources may include engineers, software developers, offshore developers, project managers, testers, business analysts, data scientists, and others, who can work from anywhere in the world.
The challenges faced by the IT industry and other sectors in 2020 prompted many organizations to adopt new approaches to staffing their projects. With remote work becoming the norm, it made even more sense to hire offshore resources that could provide services with no physical location constraints.
Offshoring is now a legitimate way to create more business opportunities and value without exceeding budgets. This is especially beneficial for startups, where finances can be tight and it’s essential to make every dollar count, particularly in the early stages of a new company.
In addition to cost considerations, it’s essential to recruit top-tier talent who can meet the demands of modern business and information technology trends. It’s virtually impossible to find all the required talent in a single location at a reasonable cost. Talent is everywhere, so why would you limit your startup to geographic boundaries?
In this blog post, we will explore how startup organizations can benefit from hiring offshore developers’ resources. By hiring the best resources no matter where they are located, startups can gain a competitive edge in terms of support, costs, risk, and skills. So, let’s dive in!
What is Offshore Software Development?
Many startups understand that having skilled software engineers is essential to the success of their products or services. However, it can be challenging to find top-tier software engineers who are available or open to new opportunities. Outsourcing provides a solution for companies looking to access the best tech talent within their budget. This approach gives them an advantage in streamlining the software development lifecycle with resources that are highly knowledgeable on the subject and have a variety of projects under their belt.
Offshore software development involves moving the software development process of your projects to a country where production costs are lower. If we take a trip down memory lane, we can go back to the 1980s when Accenture, previously known as Andersen, was famous for taking unstructured system requirements from clients and turning them into a functioning system for millions of dollars. While the term outsourcing was not explicitly used for this practice, Andersen was known for training consultants in software development, similar to what is now known as the Waterfall methodology.
As we move to the mid and late 1900s, India-based firms began to take projects, offering programmers, system analysts, and project managers a fraction of what US firms were charging. While they were not taking a bite of the large-sized projects yet, Indian firms began to set a precedent for highly skilled and available resources. As the year 2000 approached, and many companies were preparing their systems for Y2K, offshore resources became an answer for many looking for better costs.
It has been 21 years since outsourcing software development projects became popular. Over time, the industry has evolved, with project-based outsourcing now following Agile methodologies instead of Waterfall. While India is still a top destination for offshore software development, other countries have also become reliable options. Eastern European countries like Ukraine, Poland, and Belarus have emerged as popular outsourcing destinations. Latin American countries such as Mexico, Brazil, and Chile have also become hot spots for outsourcing, with a large number of software developers. Additionally, China and the Philippines are among the top countries that offer professional developers, following closely behind India.
Comparison of Offshore and In-house Software Development
Many companies turn to offshore solutions for software development to reduce costs as they often face budgetary constraints. Developing a software project from scratch can be a costly undertaking, so outsourcing to offshore resources is often the best option.
Choosing between investing in an in-house team of software developers and outsourcing software development to an offshore company depends on several factors, such as budget, project complexity, and time to market. In-house teams work within the employer’s facilities, providing seamless workflow and greater perceived control over project customization. This allows organizations to have direct control over selecting the necessary skill levels required for a unique project.
Offshore software development can be a great option if you’re looking to hire expertise in software development tasks without spending a lot of money. software development centers offer virtual services and remote employment, which means you can get uninterrupted support and a streamlined process with their team extensions. Offshore software development lets you tap into various areas of building a software product or service such as artificial intelligence, machine learning, data science, etc., which can be challenging and expensive to find in one geographic location.
If you prefer to have an in-house team, be prepared to pay a premium since in-house teams are more expensive to build and maintain. Companies sometimes prefer in-house teams because they share the same language and cultural background, which can speed up software development. However, with the world being more interconnected nowadays, this can be achieved virtually anywhere in the world. Although offshore software development centers are usually located 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 is more cost-effective to use offshore software development resources than to recruit, train, hire, onboard, and grow an in-house team of developers.
- The breadth of specialized skills. Recruiting in-house engineers can be a challenge, especially when different skill sets are required for a project. For example, finding a Data Scientist or an engineer specializing in a specific programming language can be difficult, and it is possible that you may not find a suitable candidate in your area. However, this is not an issue in offshore centers where they can easily access a pool of resources from across the globe and provide clients with the right professionals for their specific tasks.
- Communication. Many people believe that in-house teams have an advantage when it comes to communication because they have direct access to other stakeholders involved in the software development process. While this may be true, the pandemic has broken down many of these barriers as everyone has had to go remote. As a result, virtual communication has become the norm, something that offshore software developers were already experts in. This has made it easier for them to communicate with clients, teams, stakeholders, and others involved in the project.
- Time zone and language. Although in-house teams may have an advantage in this field, it is important to note that offshore developers can provide clients with 24/7 support. Additionally, as previously mentioned, the ongoing health crisis has forced in-house employees to work remotely, placing everyone on an equal footing when it comes to communication.
Advantages of Offshore Development for Startups
Every startup has unique requirements, but they all seek outstanding talent to support their growth. When considering the option of offshore software development, startups should carefully evaluate the pros and cons. Conducting thorough research, examining portfolios, and reading case studies can ease this process and help determine the best practices that apply to their specific needs. After analyzing the relevant information, it will be clear that partnering with a software development company can provide numerous advantages, particularly in terms of budget management.
Here are some of the top advantages of working with an offshore software development company for your startup:
- Costs: Startup companies often struggle with the high costs associated with hiring an in-house team of software developers. This is particularly true in the early stages of a company when resources are limited. One solution is to hire an offshore software development company, which can significantly lower the costs of product or service development. Additionally, outsourcing provides access to a larger pool of resources that would be difficult to achieve with an in-house team.
- Performance: Offshore software developers work on various projects that provide them with exposure to new technologies, methodologies, and business practices. This exposure adds to their skill set, making it easier for them to perform better and improve the efficiency of your project. When selecting a competent vendor, you can receive a comprehensive software development approach for your project that includes consulting, analytics, testing, UI/UX design, project management, and any other services that your startup may require.
- Flexibility: Startups require flexibility, which means having a team of developers who can quickly adapt to changing business and market demands. If you were to have an in-house team, it would take more time to ensure everyone aligns with a specific goal or find the right candidates who can meet the needs of a specific technology. By outsourcing software development to a skilled offshore team, you can free up your time to focus on other vital areas of your startup such as Marketing, Financials, searching for investors, go-to-market strategies, and more. Offshore software development teams offer reliable and dedicated professionals who have proven expertise and knowledge in 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
If you have decided to opt for an offshore development team for your company, you might be wondering how to select the best one. But don’t worry! We have created a helpful checklist to guide you in the selection process. By using this checklist, you will be able to choose a quality vendor who will prioritize your project and needs according to your requirements.
- Develop a clear and specific job description for your software development project. This will help you find vendors that have the professionals you need.
- Verify legitimacy with background checks.
- When choosing a software development vendor, it’s important to check their track record and reputation in the industry. Look into the number and size of clients they have worked with, and the type of culture they promote. It’s also a good idea to check the level of employee satisfaction, as this can be a good indication of the vendor’s success and well-being.
- Ask about similar projects and their successful deployment time.
- To find the right vendor for your startup, it’s a good idea to read case studies of other similar startups. By analyzing the vendors they used and understanding why it worked for them, you can get a better idea of the type of vendor that might be a good fit for your own needs. By looking at real data from other clients, you can gain deeper insights and make an informed decision.
- When selecting a vendor for your project, it is important to compare prices between at least 2-3 different vendors. This will give you an idea of the average pay for the project. Keep in mind that specialized roles will usually require slightly higher salaries, so it’s important to be mindful of the project requirements and communicate them clearly to the vendor. This will help the vendor assign the right roles to your startup and ensure that the project is completed successfully.
- When evaluating a vendor, inquire about their working style, the methodologies they employ, and the latest technologies they have experience with.
- Get an idea of what to expect for your project by confirming the typical cadence for showing MVPs, prototypes, or demos.
- Confirm with vendors that you will have total control over offshore development teams as they are an extension of your team.
- Confirm the communication channels that they use to guide a project to completion.
Freelance Platform or Outsourcing Software Development Company?
The practice of hiring freelance software developers is gaining popularity among startups. However, this approach can be risky if not executed properly. Freelancers lack the legal ties and reputation of a major outsourcing software developer.
While offshore companies may cost more than freelancers, they provide greater security and can guarantee their work and maintenance after project completion. When outsourcing offshore developers, the vendor has a management team that assigns resources to a project based on skills, expertise, and availability. This ensures that offshore developers are not overloaded and that clients receive satisfactory results.
In addition, outsourcing provides developers with access to numerous resources and technologies, allowing them to create high-performing software products or services. Freelancers, on the other hand, rely on their equipment and are best suited for small, specialized tasks rather than full-fledged projects.
Overall, outsourcing software development provides startups with a tangible advantage in terms of security, quality, and resources.
