What Is an Offshore Development Center?
Offshore Development Center
In today’s competitive environment, companies need to innovate rapidly and offer digital-first experiences to stay ahead of the competition. However, scaling technological initiatives and implementing a digital transformation are often complex and costly endeavors. To overcome these challenges, companies often establish an Offshore Development Centre (ODC), an offshore software development facility that allows them to hire experts from countries with lower wages and operating costs.
While an ODC offers several benefits, it is important for business leaders to understand the differences between this model and outsourcing before embarking on a new journey. Choosing the right partner, understanding the nuances of working with an Offshore Development Centre, and establishing clear communication processes are key to success.
The ODC model is an attractive solution for businesses that are looking to save money on salaries, operating expenses, and technology maintenance and upgrades. Hiring developers from countries with lower wages enables companies to achieve significant savings without sacrificing the quality of work. The ODC also allows companies to autoscale their IT departments based on project performance, which helps reduce staffing requirements and thereby decrease costs.
What Is an Offshore Development Center?
A well-established ODC also provides a centralized location for managing software development activities. It ensures that all team members have access to the latest tools, technology, and best practices for creating and maintaining high-quality products. This approach also enables companies to collaborate more easily with remote teams, regardless of their geographical locations.
In addition, setting up an ODC can help improve a company’s time-to-market, as it can employ dedicated offshore teams to work around the clock on specific projects. This can be particularly helpful for startups and small-to-medium enterprises (SMEs) that have a demand for software development that exceeds their in-house capabilities.
An ODC is a good option for companies with niche skills that are difficult to find locally, such as artificial intelligence, data science, and machine learning. It is also a good choice for companies with complex or large-scale IT projects, as they can leverage an ODC to create and maintain a dedicated team that will work on the project until it is completed.
It is essential for any company considering an ODC to carefully consider the business risks and costs before making a decision. This includes ensuring that the business is prepared to handle any potential security breaches and other risk factors that may be associated with an ODC.
While establishing an ODC can be challenging, many leading businesses choose to rely on a third-party service provider to manage the ODC for them. Typically, these providers will take on responsibility for hiring and managing the offshore staff, as well as providing the necessary infrastructure and office space. They also have a better grasp of local laws and business practices, which can make the ODC easier to manage. Additionally, they can offer a variety of different payment terms, including hourly rates and fixed-rate contracts. In addition, a third-party provider can also act as the legal owner of the ODC, selling it to the client company after 2-3 years.