Starting a tech-related business is an adventure that comes with difficulties, especially because of rising costs, constantly changing software technologies, and more competitive markets. It’s no wonder that numerous companies and startups alike are turning on offshore programming to help achieve their objectives.
In 2021, the global market for outsourcing of IT is predicted to amount to $413.7 billion in revenue. This is a sign of a rising demand for software developers from offshore as companies attempt to cut expenses while making the most out of this fad of collaboration.
What exactly is Offshore Software Development
Offshore software development, also known as offshoring, is the process of enlisting an external company from a different location to assume the responsibility of creating software or apps. Offshore refers to the fact that there’s an extensive distance and, consequently, a time-zone differences between the customer and the place of offshore developers.
Startups benefit from a variety of advantages by outsourcing offshore software which include cost savings and a faster period of time before they can launch. Offshore development services don’t have to be limited to developing an application from scratch. Developers may offer specific services like back-end development, design and UI/UX and the development of apps.
For instance, Dollar Shave Club, located in the US and has engaged our team based in Ukraine to create new features for their application. With Ukraine being seven minutes ahead of US the US, this project is regarded as offshore outsourcing.
Offshore Software Development Statistics
Outsourcing has proven to be an enduring activity in the face of the pandemic crisis that is sweeping across the globe according to the Deloitte’s 2020 Global Outsourcing Survey. The study revealed that 77% of those who responded identified price reduction as the main factor driving outsourcing. Deloitte also found the fact that 68% respondents said outsourcing aids in enabling cloud technology in their businesses.
The demand for outsourcing software is expected to rise over the next few years. According to ManpowerGroup 69 percent of US firms are experiencing difficulties in attracting skilled workers in 2019. This year, IT professionals among the most difficult to recruit. Employers in the UK are also experiencing similar issues with 67% of the tech executives admitting that the shortage of tech talent is causing disruption to the momentum.
Pros and Pros and Offshore Software Development
The shortage of talent in developed Western countries has led to the search for offshore software development firms in high-quality, low-cost countries. But, it is important to consider the advantages and disadvantages of such a deal prior to hiring for an overseas IT development company.
The advantages of offshore software development
The development of software offshore has been a preferred option because it offers the following advantages for businesses.
When you outsource your software developers from an area with a less expensive cost of living, then you reap the immediate benefits in terms of development expenses that are lower, without losing quality.
For a clearer idea of the amount you could save, think about the amount that an US startup pays for an employee’s salary. According to Glassdoor the median monthly income of an US Software developer comes in at $97,763 annually however, the same job in Ukraine just makes the equivalent of $36,000 per year.
Startups shouldn’t be burdened by a massive developer team with a monthly salary especially if they’re idle. Offshoring gives you the ability to change your skills, the number of developers and the length of time of collaboration. You can increase or decrease your capacity depending on your company’s needs.
In addition, offshoring implies that you do not have to make an annual commitment to employee insurance, social benefits and other benefits.
Hire from a Large Talent Pool
The process of creating software requires IT specialists from a variety of disciplines. The kind of software you’re developing you might be unable to locate this kind of expertise in local applicants.
Through offshore outsourcing means you have access to an international collection of IT talent. It doesn’t matter if you’re an expert in Node.js specialist or a programmer who is proficient in less well-known languages, you’ll be able to get the ideal candidate from the the top IT offshore outsourcing areas.
A New Focus on Business
Building a startup is a tedious juggling act and offshoring accords the co-founders to spend more time on core-functionalities. Instead of experimenting in programming or learning new technologies, the founder team can focus to marketing, PR and preparing for the launch of their product.
Cons of Offshore Software Development
While outsourcing software offshore can have significant advantages but there are some disadvantages.
Differentialities in Time Zone and Culture
Offshoring, which is the process of hiring developers in locations that are different from yours could mean an enormous difference in the time zone and culture. For instance, if you’re working with software engineers located in China and you’re working with them, you’ll have to contend with a 12-hour time difference. This is made more difficult by the fact that not all Chinese developers are proficient English users.
The success of outsourcing depends on the effective communication with your staff and the outsourcing vendor. Because face-to face meetings aren’t feasible, the requirements of the project and milestones, progress reports, tests, and other documentation that is required must be agreed upon prior to beginning the project.
In contrast to overseeing an in-house team, you do not have control over how an external vendor develops the software. Also, you don’t have any control over the way they handle sensitive data in order to keep its employees engaged in a shared objective. In addition there are IT vendors like Uptech that use open communication in order to prevent misunderstandings and mistrust.
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How do you manage the Offshore Development Team? Offshore Development Team
It’s true that working in a development department that is located offshore can be difficult, but it’s doable provided you’ve put in the proper base for it. Here’s how it should be accomplished.
1. Set out your goals
Before reaching out to prospective vendors, it is important be clear on the services you’re seeking.
- Are you in search of an external group of developers who can develop an application from scratch?
- Do you need help to enhance the UX experience of your existing application?
2. Select The Best Partner
The next step is to search for prospective vendors who have experience as well as the skills and the ability to manage such job requirements. Equally important is that the vendor demonstrate the necessary knowledge of your company. This will allow you to be sure that the vendor is committed to the goals of your business when designing the software.
3. Select the most effective model for work
Most software developers who are offshore offer several collaboration options: time and materials fixed cost, dedicated team. Each type of collaboration has each its own pros and cons. The team-based approach provides stability as well as control, and is the best suitable for projects that last for a long time.
While fixed-price is ideal for projects that have clear requirements. Time and material allow flexibility for projects with ambiguous requirements.
4. Use the tools to communicate
Communication is essential for a seamless relationship between an IT provider located offshore and its customer. Uptech is a company that uses a variety of communication tools. Uptech we employ various tools for communication such as Slack, Jira, Zoom, Figma, and Miro to collaborate with our clients.
5. Feedback is appreciated.
To keep outsourced developers from diverging from the intended direction It is essential to conduct regular check-ins during which the status reports are shared with the client. It is essential to determine whether the developers are headed towards the correct direction, and provide an actionable report accordingly.
6. Be Partners and be One team
Based on my work experience with a wide range of customers, I am able to affirm that the secret to success in offshoring lies in the remarkable collaboration with the supplier and the client. In essence, you’ll have to collaborate with the developers you outsource like they’re part of your own team.
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Top Countries for Offshore Software Development
So, what’s the ideal nation to go to for an outsourcing software development firm? Due to the worldwide demand for IT skills, numerous nations around the globe are competing for a spot on the top outsourcing destinations list.
Ukraine is the best option in the event that you’re looking to outsource services to Eastern European developers. Ukraine has over 200 000 IT professionals and the economy is heavily geared toward outsourcing services. Ukraine is frequently named an ideal IT outsourcing hub by some of the world’s most reputable organisations.
The reputation of India as the best outsourcing nation in Asia is bolstered due to its 5,000,000+ developers of software. India is known for its low rate per hour however it is hindered by issues including cultural differences, as well as doubtful quality.
The rise of Argentina as the most sought-after Latin American outsourcing country is because of strong government support as well as high-quality educational facilities, particularly in the field of technology. Argentina’s IT outsourcing sector is supported by its low salary rate and its cultural affinities to US-based customers.
How Much Does Offshore Software Development Cost?
Although offshore software development typically can result in savings The resources utilized vary in accordance with the type of project. It is therefore impossible to determine a specific amount on the development of a specific software. However, our experience suggests that developing a software program in Ukraine can cost anywhere from $50,000 to $250,000.
offshore app development
There are a few things that will affect the final cost.
- App type and difficulty – If you build a simple app without interactive elements, you will only pay the minimum. A complex app such as Uber will be more expensive.
- Platforms Support – Software that targets one platform is cheaper than software that can be installed on all platforms.
- UX/UI requirements – A simple, one-page web application with a minimalist design can be very affordable. However, complex 3D visual processing and dozens of icons will cost you more.
- Backend processing – For apps like DoorDash the majority of the processing takes place at the backend. Even if you are outsourcing, building a backend engine is expensive.
What are the cost components of offshore software development?
Other than the direct costs of building the software, there may be other factors that will impact the cost of offshore software development services.
- Technical Complexity This is what we mentioned above. It includes the app type and supported platforms. Back-end processing and third-party integrations.
- Project Scope Offshore outsourcing is not limited to the development of an app. Although vendors may offer post-release support and QA testing, they charge separately from the development.
- Deadlines – Do you have a strict schedule and no room to make mistakes? This could mean that the vendor will need to allocate more resources to your project, which may result in a higher developer’s fee.
- Tech Stacks Developing complex software applications requires a team of developers who are skilled in different tech stacks. Your project will cost more if you have IT specialists involved.
Why Offshore to Uptech?
Uptech, a Ukrainian software outsourcing company, is located in Ukraine. We have been able to work with more than 100 startups across 11 countries over the years and have thrived in an IT outsourcing market. Uptech is managed by highly-skilled IT professionals who have experience working with startups from various industries (healthcare and fintech, social media, ondemand, real estate, etc.).
Aspiration, an American fintech startup offering alternative banking solutions through an app, has chosen our product development philosophy. Aspiration allows users to not only manage their financial transactions, but also invest through the app.
We have worked closely with our client during all stages of development. Before we begin developing the app, our team makes sure that the idea behind the app is tested with a feasibility analysis. To ensure that we are on the right track, we kept our client informed about the progress of the project and solicited feedback.
Uptech’s consistent delivery of high-quality app development services is not overlooked. Clutch has named us one of the Top Development & IT Companies in Ukraine for 2021. Our team was also awarded the DesignRush Award by an industrial publication.
These accomplishments speak volumes about how Uptech collaborated with clients and created apps that were functional, but also met the users’ needs.
All indications point to offshore software development being the preferred method for building apps in the future. This arrangement is especially beneficial for startups. We have shown you how to select the right IT outsourcing company and where to look for them.
We’ve also shown our success as a top-ranking software outsourcing company in Ukraine, and how we have helped numerous startups.
For more information on how to leverage our highly skilled software developers to help your startup, please contact us.