Offshore development is a strategy used by large and small companies to reduce overhead costs, scale their business and gain access to talent. The main purpose of offshoring is to cut the costs of labor and other big expenses, like the HR department and office space. In the process, you get access to high-quality services, experienced specialists, and knowledge transfer. Offshore development center benefits big businesses, too. But what is Offshore Development Center, and how does it work exactly? Well, we’ll see what is ODC and how it can help your business grow (or fall if you don’t do it right).
What is an offshore development center?
An offshore development center meaning is a company’s branch in another country with a vast pool of talent and lower costs. It is an effective way for a business to free itself from geographical restrictions and make use of skilled developers in emerging markets. Offshore development center services can help businesses stand out from the competition.
Pros of ODCs
There are a lot of positives when working with offshore partners, especially when we are on the topic of offshore development centers. Let’s see the main ones:
Offshoring to IT labor is more affordable than it’s ever been. Today, with remote work becoming increasingly common, consumers are gaining more access to consulting services in high-demand fields and industries. This has caused the wage gap between digital workers and other fields of employment to close significantly. Companies can benefit from having a competitive advantage over other businesses that are not yet committed. Outsourcing rates are just better.
Access to more talent
Offshore development services mean that employees can work remotely around the globe, getting their efforts and productivity easily streamlined into your company’s infrastructure. In addition, by hiring such a large talent pool, companies can request candidates with specific skill sets. Hiring for what you need instead of settling for mediocrity is easier when you have access to more candidates (and more choices).
Expand to foreign markets
When companies develop a product or service in a particular region and sell it locally, they will earn trust through the local market. A subsidiary or branch based in their home country will leverage this advantage to reach the local market. Therefore, they can directly get access to customers, understand them, and can save money. The company can acquire sales leads and generate revenue by targeting local consumers with its products or services.
Cons of ODCs
The benefits and considerations of offshore mobile app development play a huge role, without a doubt. But ODCs are not flawless by any means. You can get great value but fail miserably. Let’s see some downsides:
Time zone discrepancies
As with any offshore project, the most challenging aspect of the process is the time difference. For small companies, working with a team in another country can be risky because there will always be someone working while others are asleep. This means no one will be available to assist customers during off-hours or late at night.
The English language is prevalent around the world, but it can be hard to use in a discussion by people who are not native English speakers. To easily and effectively communicate both IT ideas and the intent behind them, the only way is to translate everything into a common language that all parties can understand. English is the “bridge” that lets good communication happen, so if you deal with non-native partners, you might get lost in the translation if they don’t speak it.
Information leakage is a security risk that can cause severe problems for any business. When using offshore development services, developers need sensitive information, including customer data, code, and workflows, so that they can understand the entire system and tackle projects. Companies should put more effort into maintaining information confidentiality; otherwise, they should prepare for devastating consequences.
What is Offshore Development Center? Is it good or bad? As with all business decisions, it’s an amazing option if you know how to use it right, but it can backfire if you are not aware of any potential downsides. However, if you manage to get things under control, you can benefit from it a lot.