Offshore Software Development Complete Guide
Slava Khristich
Vlad Nazarov
Is offshore software development accessible and affordable for all investors and startup owners? This article will provide valuable insights into the impact of outsourcing early-stage or mature projects to offshore facilities.
Indeed, hiring a custom offshore software development team offers high-tech entrepreneurs from various business sectors the opportunity to transform their ideas into market-ready software products while maintaining modest budgets.
At TATEEDA, we have been accumulating extensive experience since our establishment in 2013, providing proof of how an offshore outsourcing software development strategy can enable both young and mature American companies to broaden their technical horizons without breaking the bank.
? For instance, we assisted our client, SCRx, a pharmacy business from Southern California. According to our rough estimates, our custom software offshore development services have saved them approximately 30-40% of their budget compared to onshore vendors and over 20% when benchmarked against nearshore providers.
A custom pharmacy management system for SCRx was able to automate and accelerate processes for drug distribution, both within the facility and for delivery to customers’ homes, while also acquiring several crucial improvements in their existing pharmacy claim-management system:
| Are you seeking to accelerate your product launch while working within budget constraints? Do you require technical expertise to enhance your current project with new features or skills? If these scenarios resonate with you, then offshore software developers, such as TATEEDA, could be a valuable solution. Contact us today for a free estimate → |
Why Do Companies Opt for Offshoring Software Engineering or Other Operations? ?
The primary reason is clear: 70% of companies recognize global outsourcing as cost-effective, significantly reducing expenses associated with hiring in-house staff.
? Over 65% of businesses in the U.S. outsource at least one department, with approximately 40% of IT operations being among the most commonly outsourced due to their high costs and essential nature in modern business operations.
If cost reduction is a priority on your 2024 goal list (and we’re confident it is!), global IT outsourcing can offer a strategic solution for your business. In the following paragraphs, we’ll explore offshore IT development’s benefits and potential disadvantages compared to its onshore and nearshore counterparts.
| ?? Looking to enhance your team with offshore software developers? Or perhaps you need a swift consultation, followed by a personalized project estimate? Our expert representatives are always on standby, ready to connect with you and cater to your specific needs. |
Slava Khristich
Healthtech CTO
Based in San Diego, Slava knows how to design an efficient software solution for healthcare, including IoT, Cloud, and embedded systems.
Table of Contents
The Advantages of Offshore Development
The trend towards custom offshore programming is primarily driven by the quest for cost efficiency and the burgeoning demand for digitalization in the face of a tech talent shortage. This trend is significantly altering the cost dynamics and strategic considerations associated with engaging offshore web developers.
?? It’s no longer viewed as a questionable choice for reputable companies; instead, it’s seen as a means of blending local and remote talent into efficient cross-national teams. Most American companies are utilizing a combination of onshore, nearshore, and offshore resources, paving the way for workforce diversification and access to rare talents at a more affordable cost.
According to several industry surveys, the key reasons for tech company executives to use offshore engineering include the following:
- Cost Savings: One of the most compelling reasons to consider offshore software product development is the significant reduction in costs compared to onshore or nearshore software development service practices, without compromising quality or productivity. Of course, this is true for competent, well-organized offshore service vendors or an offshore software R&D center established in close affiliation with your company.
- Global Talent Access: Software offshoring opens the door to a vast pool of skilled offshore IT product engineers, offering a range of expertise from basic offshore app coding or testing to advanced software system architecting. For example, hiring an experienced full-stack developer can cost you at least $80,000-100,000+ in the U.S., while the same-level specialists can cost you $40,000-50,000 in Ukraine or other countries popular for offshore development services.
- Round-the-Clock Productivity: With teams spread across different time zones, projects can progress continuously, ensuring faster turnaround times for offshore software product development. This approach, often referred to as the “follow the sun” model, allows for 24/7 development cycles, maximizing efficiency and accelerating project delivery.
Here’s a comparison table among onshore, nearshore, and offshore software development strategies, including their benefits and concerns:
| Criteria | Onshore | Nearshore | Offshore |
| Location | The same country as the client | Neighboring country, within a few time zones | Different continents, beyond 4 time zones |
| Price Difference | None | Minimal | Considerable |
| Communication | Face-to-face interactions | Remote communication | Remote communication, significant time difference |
| Language Barrier | None | Possible, but manageable | Likely |
| International Expertise | Local market knowledge | Similar cultural insights | Diverse cultural and technical insights |
Learn more about the nuances of hiring onshore vs. offshore software developers from this article:
➡️ How to Hire a Dedicated Software Development Team: Onshore vs. Offshore
Navigating Challenges in Offshore Development
⛔ Cultural and Lifestyle Disparities: In the custom offshore software application development model, the pronounced differences in lifestyle and business culture between teams in the USA and their offshore partners can breed nervousness, discontent, and reliance on stereotypes. This cultural chasm challenges the building of trust and finding common ground, essential for seamless collaboration and alignment of project goals.
⛔ Industry-specific Technical Standards: Compliance with specific technical standards and regulations, such as HIPAA in healthcare, is a cornerstone of successful offshore software product development. However, offshore teams’ unfamiliarity with these critical standards can pose significant risks, threatening the integrity and compliance of the development project.
⛔ Data Management and Privacy Concerns: The offshore software application development model faces hurdles in adhering to stringent global data protection regulations like GDPR. The uneven understanding and application of these privacy standards across different regions can lead to data privacy risks and potential regulatory fines, impacting the overall cost of offshore software development.
⛔ Vendor Staff Turnover: The offshore development sector often grapples with high turnover rates among vendors, largely due to poor HR practices. This turnover can interrupt the development process, jeopardize the quality and timely delivery of software projects, and inflate the offshore software development costs.
⛔ Cross-national Legal Complexities: Offshore software product development entails navigating the intricate web of cross-national legal issues, making managing legal agreements and compliance with diverse legal systems a complex challenge. This complexity can hinder project execution and expose businesses to legal risks.
⛔ Communication Infrastructure and Technology Gaps: Discrepancies in communication infrastructure and technology access between the primary business location and offshore sites can obstruct efficient offshore development. These gaps can stifle interaction and collaboration, adversely affecting the project’s efficiency and success.
| At TATEEDA, we clearly understand the challenges and problems specific to offshore development services. We are working hard to maximize all the positive aspects and deliver the best possible IT talent at the optimal cost, enabling even startups and young companies to expand their capabilities in a budget-friendly manner. Contact us today for a free estimate → |
Effective Strategies for Optimizing Offshore Team Collaboration
These strategies include tactics and methods proven at TATEEDA. However, we have even more efficient know-hows that are available to our clients. ? Check out this table where an efficient solution counters each problem of offshore software development.
| Problem | Solution Steps |
| Cultural and Lifestyle Disparities | ✅ Search for offshore vendors with extensive experience working with clients from your country, demonstrated by a case study portfolio. ?? Ensure they have a deep understanding of your cultural and business practices through discussions and examination of past projects. |
| Industry-specific Technical Standards | ✅ Verify the offshore vendor’s experience with projects in your industry through background checks. ⚖️ ? Ensure the vendor’s engineers are familiar with key industry standards by discussing them and requesting case studies or references that demonstrate their compliance in past projects. |
| Data Management and Privacy Concerns | ✅ Implement strict data protection policies, including encryption and access control, tailored to global standards like GDPR. ?? Conduct regular security training and awareness programs. Perform consistent audits to ensure compliance with data privacy regulations. |
| Vendor Staff Turnover | ✅ Collaborate with vendors known for building lasting, productive relationships with their staff, evidenced by low turnover and positive feedback. ?? Evaluate the vendor’s HR practices and dedication to employee development, while keeping open lines of communication for feedback and aligning expectations to promote a stable team environment. |
| Cross-national Legal Complexities | ✅ Consult with legal experts to draft clear, comprehensive contracts. ?? Regularly review legal obligations and rights with the offshore team to ensure mutual understanding. Set up a legal advisory service for ongoing support and to navigate unexpected legal challenges effectively. |
| Communication Infrastructure and Technology Gaps | ✅ Invest in reliable communication and project management tools to bridge technology gaps. ?? Train teams on the effective use of these tools for smooth collaboration. Regularly update and upgrade technology infrastructure to meet evolving project needs and ensure efficient workflow. |
How TATEEDA Can Enhance Your Custom Offshore Software Development Experience
TATEEDA | GLOBAL stands out as a reliable and knowledgeable partner in navigating the custom offshore development landscape. We can assist you in:
- Finding offshore software developers with well-balanced skill sets at competitive salary rates.
- Creating and maintaining a dedicated project team across various locations, aligned with your time zone and specific project requirements.
- Augmenting your IT projects with full-stack developers, QA testers, DevOps, and other skilled offshore development specialists.
- Offering unique expertise in health-tech startups, biotech systems, pharmaceutical software, and more.
- Conducting HR processes for you. We’ll conduct interviews and background checks for all candidates to ensure your team gets only the best IT specialists.
Contact us today for more information and free estimates!
Delivered Healthcare Software Portfolio
The leading American healthcare companies benefit from working with us.
FAQ: Offshore IT Development Services
What makes TATEEDA a reliable partner for offshore software development?
TATEEDA stands out as a reliable partner by leveraging our extensive experience and a deep understanding of the custom offshore software development landscape. Our software development resources, located in Ukraine, Brazil, Poland, Colombia, and other countries, are selected for their highly skilled workforce. Despite our global reach, we legally operate as an onshore company with our headquarters in California, allowing us to offer the best of both worlds: onshore reliability with offshore flexibility and cost-effectiveness.
How does TATEEDA ensure compliance with industry-specific technical standards in offshore development projects?
TATEEDA ensures compliance by rigorously vetting our engineering teams across different locations for their proficiency in industry-specific standards. Our global team is proficient in English, Spanish, Portuguese, Ukrainian, and other languages, facilitating clear and effective communication. We showcase our commitment to standards through detailed case studies and references from past projects that demonstrate our adherence to critical industry benchmarks.
Can TATEEDA help mitigate risks associated with vendor staff turnover in offshore development projects?
Absolutely. TATEEDA mitigates these risks by prioritizing stable, long-term relationships with our employees across all our locations. Our robust HR practices and commitment to professional development, coupled with our proactive communication strategy, ensure that we align expectations and foster a productive team environment, all while managing development rates to benefit our clients through a mix of local and remote talent.
How does TATEEDA address data management and privacy concerns in offshore software development?
TATEEDA addresses these concerns by implementing stringent data protection policies, including advanced encryption and access controls, across all our offshore and nearshore locations. Our multilingual teams ensure compliance with global standards like GDPR through regular training and audits, safeguarding sensitive information and maintaining the trust of our clients. With our headquarters in California, we offer the security of an onshore company while benefiting from the cost advantages and diverse talent of our offshore and nearshore operations.
