How do I set up an offshore development center?
Do you have a product that has the potential to make money internationally? However, your limited resources and lack of expertise in foreign markets are holding you back from expanding internationally. This post will answer the question “How do I set up an offshore development center?”, which might help you solve the problem above.
1. What Is an Offshore Development Center?
ODC (Offshore Development Center) is a term that refers to a company in another nation providing you with software and IT services. You can say it’s your company’s subsidiary.
This center provides software development skills to several offshore development teams. By using this project management technique, managers may expand their local teams with skilled engineers while spending less money on hiring local technical people.
Companies throughout the world are searching for reliable offshore development service providers, and offshore development is fast becoming a common practice in the software industry.
2. How Do I Set Up An Offshore Development Center?
The offshore development center is a subsidiary located abroad, providing software development services for companies. Here are general guidelines to set up an offshore development center.
2.1 Identify Your Business Needs And Goals
First of all, you should define clearly the business goals:
- Identify the issues and what the corporation should do to solve them.
- How much the budget is.
- Which cooperation to choose.
- Which entity management to choose, either by you (BOT) or your partner (FTE).
- What level of control the company wants to have in the future.
- What required results.
Figure 1. Define what your business should focus on.
For example, if you are looking to build an MVP and have only limited funds and features available, consider choosing a fixed-price ODC.
With clearly defined business objectives, you will be able to decide which offshore development center model to use and how much money you are willing to spend on this project.
2.2 Choose A Suitable Location
Eastern Europe and Asia have been the outsourcing destination of choice for IT companies because it offers economic incentives.
However, businesses should also consider technical skills and cultural specifics to avoid problems with communication or work ethic gaps when running teams remotely from those regions.
2.3 Find A Reliable Vendor
After choosing the country, it is time to find a reliable vendor. In every country, there are thousands of offshore corporations that all have optimal portfolios, high ratings, a large number of positive reviews, and reasonable service pricing.
Fortunately, you can find the ideal offshore provider using the following helpful pointers on what to look for:
- Price.
- Technical professional.
- The scale of the business.
- Extensive experience establishing R&D departments.
- Communication at the start.
- The reputation of the vendor.
- Communication at the start.
2.4 Start Recruitment
When you finally close the deal with a service provider, you need to recruit employees to run an ODC. At this stage, researchers will begin evaluating the present labor market and identifying the applicants who meet the criteria.
Figure 2. Start recruitment after selecting a service provider.
Pay close attention to all aspects of applicants, including education, soft skills, and any other relevant information that may help determine suitability based on company standards.
2.5 Set Up ODC Security Measurements
The Offshore Development Center service providers claim to offer high-security measures to protect their clients. However, you can not rest assured if you do not participate in the development process.
You may want to protect the company from any intelligence leaks and intruders with an ODC security strategy that incorporates physical security levels and confidentiality.
2.6 Identify The Rules And Regulations
With the offshore team selected, you should draw up a list of all your rules and regulations to ensure everything goes smoothly and protect your organization. The offshore crew will know for sure what you expect of them and what would happen if they fail to follow the regulations.
Remember to consult lawyers before signing any agreements, as they will help protect the company if something goes wrong or your partner breaks their word.
2.7 Communicate With Your Team Regularly
It is important to keep in constant contact with your ODC so they can inform you about the progress of their project. Regular meetings will help iron out any bumps or issues before they become a problem.
Figure 3. Communication and collaboration tools for organizations.
Effective communication tools like Jira, Zoom and Slack will make these conversations easy even from afar.
If you don’t have time and can’t carry out such tasks above in a short period, there are some offshore development services in Ho Chi Minh city you can look for. They provide services that help you easily create your offshore development center.
3. WHAT TO CONSIDER WHEN SETTING UP AN OFFSHORE DEVELOPMENT CENTER
3.1 CREATE AN INTENSIVE JOB LIST FOR YOUR OFFSHORE DEVELOPMENT CENTER TEAM
A basic outline checklist is crucial in the initial phase of this procedure to make sure you don’t forget any chores or functionalities for your project. On the contrary, you should be most concerned about your fear of shortage! Write down anything and everything that comes to mind, even if it contains repeats (which you can easily delete when completing the tasks).
3.2 FIND OUT MORE INFORMATION ABOUT THE BUSINESS YOU INTEND TO WORK
Use search engines like Google, LinkedIn, and Clutch. Just type their name to learn more about them, then click Enter when you’ve discovered it.
Discover ways to contact the former clients of the development team you have in mind: Ask politely if any of their previous clients may discuss or suggest this partner to you. It goes without saying that speaking with them for even a short while would be far more beneficial than merely reading about them.
3.3 MAKE SURE YOU HAVE ACCESS AT ALL TIME
Both parties can coexist peacefully if everything goes according to plan. Yet, what if there was a dispute? Are you certain that they won’t lock all codes in this circumstance or will they always be “fair play”? My real recommendation is that you should work to ensure that you always have access to all newly established accounts as the account owner.
3.4 MAINTAIN PROPER PROCEDURE COMPLIANCE ON THE PART OF THE ODC TEAM
Be careful to educate yourself with specific procedures in their job as your legal company during your initial interactions. Furthermore keep in mind that non-disclosure agreements (NDAs) are crucial for teams working on software.
3.5 THINK ABOUT SELECTING PAYMENT STRUCTURES WITH ADJUSTABLE RATES
In all honesty, Time & Material is the software outsourcing model that is best for you at the moment that you have chosen to read this. On the basis of the price list and agreed-upon pricing rules, you would soon carry out the payment in accordance with the ability and performance of the task they provide. Therefore there will be a least 25% increase in expenses over the set price to account for potential risks. As a result, it might be claimed that the price will increase.
3.6 TIME ZONE RESTRICTIONS ARE OVERCOME THROUGH INITIATIVE
There will be time zone variances when working with or hiring offshore developers. Tell them what you need to do to adjust for time zone differences: If your offshore development center team is working while you are asleep, all you have to do is ask for a work result, and you will receive it when you awaken.
4. What Are The Differences Between Onshore And Offshore?
4.1 Cost Savings
It’s quite undeniable that offshore will cost much less than onshore. The reason is pretty simple, offshore means that companies can search for far-away countries, allowing them to compare the costs and make their best decisions.
4.2 Time Savings
Finding some companies inside of your countries’ borders is always faster than reaching out to the other end of the world.
Still, the availability of labor and the diversity of options from offshore are unbeatable. You get to choose which company can instantly carry out what you want without waiting for them to gather employees!
4.3 Efficient Communication
Many factors seem to be standing in the way of communicating between your firms and offshore centers. However, it’s not impossible to overcome if you seriously look at the problem.
4.4 Different Time Zones
This is the biggest terrain all companies have to face in this day and age of international business in general and offshore activities in particular. Consider different measurements so that you won’t have to resolve potential troubles in the future!
Conclusion
Now, you must have stopped wondering, “How do I set up an Offshore Development Center?” reading this far. Setting up an offshore development center is a great way to keep your costs low and increase profitability.
However, you should have the right infrastructure set up before hiring anyone so they can start working immediately.
Sources: Internet
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