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Offshore Development Center vs. In-House: 6 Reasons to Go Remote

Offshore development center vs. in-house: 6 reasons to go remote

Remote development centers are opening their doors all across Europe and Asia. Many IT companies consider this model as a way of setting up their business for success. Even tech giants like Google, Amazon, and Apple choose to use the R&D framework for software development and other technical procedures. 

We’ve collected some of the top reasons that lead companies of all sizes to switch from managing their own in-house development team to building an offshore development center. 

What is an offshore development center? 

The offshore development center is a remote office located in a foreign country that consists of seasoned professionals with the desired technical background to work on specific software development projects. This model allows companies to leverage international talent to deliver superior products while reducing the in-house cost and workload. 

An ODC team usually includes software engineers, QA testers, UI/UX designers, and a business systems analyst who deals with requirements elicitation. There is also a delivery manager who is responsible for team leadership, client communication, and running the development process through to completion. 

Benefits of offshore development model

For a lot of companies the main pull of moving software development operations overseas is the ability to source the best talent for their project and to cover the lack of in-house expertise. Using an offshore development model, they can easily find the right tech specialists with specific competencies vital for their product’s success. 

Compared to managing an internal IT department, a remote office provides increased flexibility. This allows for fast team deployment, scalability, and cost optimization. It also grants more opportunities for market expansion, risk mitigation, and knowledge sharing. 

Benefits of Offshore Development Center vs. In-house Team

Here are some statistical data that illustrates why ODC is a fairly popular model being adopted by many of today’s businesses: 

  • 64% of organizations delegate their software development operations to external service providers. (Statista)
  • 80% of the world’s top 500 companies use remote offices to expand the development of software products and services. 
  • The IT outsourcing market was projected to reach $413.7 billion in 2021. (Statista)
  • Talent availability is cited as the main adoption barrier for 75% of IT automation technologies and 41% of digital workplace technologies. (Gartner)
  • 58% of companies feel that they increase the level of quality thanks to outsourcing. (Deloitte)

Let’s take a closer look at the advantages offshore development center has to offer:

Access to top talent

Due to growing demand worldwide, IT staffing and recruiting are getting harder every year. In 2021, 46% of industry executives cited talent availability as their primary concern for the upcoming decade. And quite rightly so, since the global talent gap is projected to reach a staggering 85M people by 2030. 

Finding high-quality tech specialists in countries like the USA, UK, and Canada is already a pretty challenging task. Offshore development centers can be a great solution to that, as this model offers access to a greater variety of software development specialists from all over the world. 

Moving your operations to an overseas location enables you to connect with the best developers in your business domain. A remote office, therefore, not only reduces geographical barriers but also removes the need to compete for top talent with big tech companies. 

Easy kick-off

Building an internal development team from scratch incurs a great run-time overhead and tremendous operative costs. You have to allocate sufficient funding and working hours for recruitment, onboarding, and further training of your tech staff. 

Offshore development framework can spare you of these troubles. You only have to define what to do and the vendor will pick it up from there. They will provide you with a dedicated team of pre-vetted software engineers who best fit your project specifications. Such partnership, therefore, offers high-quality results, hassle-free management, and unbeatable budget efficiency. 

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Offshore Developer Rates Guide

Get outsourcing rates in Eastern Europe, Asia, Latin America, Africa as well as tips on how to choose the country for offshore development.

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Faster time-to-hire 

Finding the right talent on the local market usually takes up between 10 to 12 weeks. Furthermore, because software engineers join the project one by one as you hire them, the recruitment phase can stretch out for 5-7 months. 

Establishing an offshore development center provides you with access to an employee pool that you may not have had access to otherwise. You can scout around for seasoned developers anywhere in the world, which fast-forwards the staffing process. 

Moreover, if you go with an accomplished software development partner, you can have a fully-fledged product delivery team ready in 6-10 weeks. Thanks to their curated talent pool of pre-screened candidates, vendors don’t have to spend extra time on interviews, tech screening, and coding assessments. They simply pick the people who best fit your project requirements. That’s why it takes them weeks, not months to compose the perfect team for you. 

Cost efficiency

The offshore business model allows you to pair powerful tech potential with moderate rates and affordable operational costs. This approach can generate the average cost saving from 40% to 60% of the original price tag on development services you’ll have to pay in the US, Israel, or Western European countries. 

With an offshore production center, you can source the same level of qualified professionals overseas, but at a much better price than hiring locally. According to the U.S. Small Business Administration, the basic wage package is typically 1.25 to 1.4 times the employee’s salary. The additional costs include taxes, health insurance, retirement savings plans, vacation, and medical leave reimbursement. 

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How to Calculate Offshore Software Development Costs in 2022

Everything you need to know about offshore software development cost structure: direct costs, ad-hoc costs, offshore developer rates, and more.

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Round-the-clock activity

Remote staffing usually implies significant time zone disparity. While some may see it as a downside, it can actually facilitate faster product delivery. Having some overlapping between the local and remote work hours ensures continuous work and a constant supply of services. 

Round-the-clock availability of resources means you will always have someone working on the project. This helps to identify and manage any issues arising in the development process in a timely manner. 

If you only have a local team, it would require your staff to do late-night shifts or work extra hours during major service updates. But pulling together with offshore software specialists working 4-6 hours ahead or behind your time zone, you can introduce changes without any interruptions in your normal workflow. 

Flexible team structure 

The majority of tech-oriented companies don’t require the same resources all the time. In fact, the ability to change tech stack, business model, or team capacity on the fly shows how quickly they can adapt to the constantly evolving project specifications. And offshore development centers shine a lot in this regard. 

The remote office model is pretty flexible in terms of team composition. For example, at the outset of the development lifecycle, the tasks mostly pertain to the creation of user-facing elements, so you will only need front-end engineers on board. When the nature of the work changes as you switch to building server-side application logic, more back-end specialists will be added to the team. 

Such a level of flexibility is impossible to attain if you rely solely on your in-house development team. But with offshore development, you can allocate resources more efficiently. Moreover, you will always have exactly the team you need at that moment.

Build your remote office with Grid Dynamics

If you consider building an offshore development center, Grid Dynamics is just the partner you need. Our service model covers team augmentation, dedicated teams, pod teams, and remote development offices. We can help you build an offshore development center of high-end engineers from scratch or find tech professionals to strengthen your in-house IT department. 

In the long run, partnering with Grid Dynamics is much easier and less expensive than hiring locally. Just share your requirements with us and our experts will come up with a team of pre-screened developers that best suits your project specifications. 

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