The First Steps to Offshore Software Development and the Ways to Protect Yourself from Risks

Perhaps the most important thing to know about offshoring software development is that this solution saves up to 60% of the budget. This is a substantial amount, isn’t it? And for those who have only one idea without strong financial support, this is just a life-saving jacket. Outsourcing your development tasks, you significantly save your money without losing quality and without depriving the project of flexibility. This is an ideal picture of the world, which is possible only with the right choice of the offshore development organization. In this article, we talk about the benefits of this approach, and also give practical tips on how to choose a worthy organization and protect yourself from risks.

Let’s Start with the Theory

So, it is possible that at the moment, the term offshore development creates confusion in your head. Let’s figure it out from a practical point of view so that you immediately understand what you should expect.

It all starts with the concept of outsourcing. This is a situation where you involve a third party to create your software. The essence of this process is always the same, but the location of the companies with which you can start working may be different. Therefore, there are three approaches.

• Onshore outsourcing. In this case, you choose a partner from your country. However, most likely you will not be able to save a lot of money since the development costs will correspond to your market.
• Nearshore outsourcing. This is a fairly profitable way when you hire an organization that is located on the same continent as you. Cultural differences may be insignificant, time zones are practically unnoticeable, but the price may already be more favorable than in the previous case.
• Offshore outsourcing. This is the most profitable but the most difficult option to implement since you and your outsourcing partner will be on different continents. As a rule, the price difference is huge (for example, compare the cost of developing a mobile application in America and Ukraine), but the whole process will require a very competent organization because of the time difference, a possible language barrier, and the need to constantly keep in touch.

I suggest you look at the latter option in more detail and consider its benefits for your business.

Besides, you take a look at my previous article where I go deeper into how much does it cost to build a web app.

Offshore Development and Its Best Features

Below we have listed the strongest advantages of this approach.

The Most Profitable Financial Opportunity

It is extremely rare for start-up companies to have an unlimited budget for development, but even in this case, it would be unwise to spend everything that you have. Offshore development is the best way to reduce your budget without sacrificing the quality of the result.

Flexible Opportunities to Prioritize

By freeing up some of the resources, you get the opportunity to set your priorities more correctly, while remaining flexible in relation to changing market conditions. You can invest free money in market research and product improvement, instead of giving the full amount only for the development process.

Everything Is Already Done for You

Recruiting programmers is a huge financial and time expense that you will either have to bear on your own or hire an external HR manager. In the case of offshore software development, you get a ready-made dedicated team that will work on your project exclusively. Moreover, as your business grows, you can always expand the team that helps you grow — just let the organization know about it.

Access to the Best Human Resources

Geographic boundaries no longer matter if you decide to outsource your programming tasks to another continent. You get the opportunity to choose the best specialists at a reasonable price. In addition, you can always start a test partnership with several companies to determine which of them resonates most with your goals and values.

Hiring an offshore team is a good option when you know how to choose your development partner wisely.

Are There Any Risks and What Are the Ways to Overcome Them?

Yes, as in any business, one hundred percent guarantee and the complete absence of risks exist only in an ideal picture of the world. Offshore development also has its risks, but the ways to overcome them are also very real.

Braking Development Process

When the time difference is significant, it can slow down the development process and threaten its seamlessness. Practice shows that this is the biggest fear of start-up companies because they do not understand how it is practically possible to organize work in such a way that customers have the opportunity to interact with the team and track the results, regardless of the time difference.

However, this is a fairly feasible task. And companies that specialize in working with customers from foreign countries have already developed their own approaches to organization and communication, which are convenient for both sides of the process.

Stealing Your Idea

Unfortunately, a practice already knows cases where a potential partner, having all the development opportunities, both human and financial, stole the idea of a customer who turned to him for advice. The only way to protect yourself from this is to sign an NDA. This document legally secures intellectual property rights and also obliges the outsourcing organization not to disclose the essence of your idea and not to use it for their own purposes.

Cultural Differences

It is also necessary to consider the difference in culture and mentality. Everything here is similar to the localization of the product — before releasing the product to foreign markets, it must be localized according to the needs of the new target audience. So in the case of offshore development, with strong cultural differences, there is a risk of getting a product that will suit only a very specific audience, which will differ from your target one. This is especially noticeable when working with companies from eastern and highly religious countries like Pakistan or India.

Lack of Competency

The market is full of new companies that want to grow at the expense of their customers. But there is a way to protect yourself from this situation as well. The first thing you should do is to carry out very thorough research of potential partners, and the second is to start a test collaboration with several companies from the short-list. For example, you can ask several companies to develop a specific feature, eliminate a mistake or make design sketches, and then compare the work process and the result.

So, How to an Organization That Fits?

We have already told you about the concept of offshore development, its advantages, and risks, and now it’s time to move on to the main thing — the direct selection of a potential partner. Clockwise has come up with the ultimate guide on this issue, so read the full story here to discover more!