As the offshore software development trend continues to rise, the need for an offshore development center (ODC) naturally follows. To many software development companies, ODC (Offshore Development Center) is long no longer an unfamiliar term. It is slowly becoming a favorite option for software development solutions due to its cost-effectiveness and excellent access to the vast availability of tech experts.
Suppose you wish to reduce software development costs and improve software quality by using an ODC yet don’t know where to start. In that case, this article might be just for you.
“In software engineering, offshore custom software development consists in offshoring the software development process in a country where production costs are lower, thus decreasing budget spending.” – Wikipedia
An Offshore Development Center (ODC) is an offshore team of integrated talents which offers software development services for the company but is located in a foreign country. Simply put, it is a subsidiary of a company that operates in another country. The land where the ODC is located usually has a much lower cost of living than where the mother company is located.
However, setting up an ODC must have resources available for the integration of the company. To reduce the primary office workload, offshore development companies usually have specialists in all kinds of management and technical aspects apart from programmers and testers. These people range from project managers, designers, testers, and UI/UX specialists to account manager HR teams and so forth.
Moreover, ODC tends to have advanced equipment and infrastructure, which minimizes additional expenses on offices and equipment.
Many people think of “outsourcing” and “offshoring” as interchangeable, but they are two distinct concepts. So what are the differences here?
Work Location
The Objective Of Each Activity
Level of Control
As you establish an offshore development centre, it’s important to carefully discuss and identify the key members in the OCD with an offshore vendor. An offshore team should include these major roles:
Discover and learn more about the most popular ODC models and how they function:
Contractor ODC Model
Customer ODC Model
Businesses that save money from offshoring can easily be more competitive. Alternatively, they may choose to reinvest those savings into the company to expand and generate more local employment, typically in more highly skilled jobs. Here are the top advantages of setting up an offshore development center.
Cost Reduction
Access To A Large Pool Of IT Talents
Great Control Over Operations
Continuous Technical Support
Projects Delivered On Time
Efficient Allocation Of Resources
Offshore Development Center is has become the way to go in a world troubled by Covid-19, and standing on top among all countries is Vietnam. According to Statista , Vietnam currently holds the 6th position in the offshoring chart. But still, there are some factors that business leaders need to take into account when choosing an offshoring partner.
Exploring the Vietnam offshore development centre service can provide a strategic advantage, given its prominent position in the offshoring landscape and the abundance of skilled software developers.
At Savvycom, we have identified these problems and always put them on top of our avoid list. So that we can create a professional and transparent working environment for our beloved clients and staff.
Cultural Barriers
Legal Barriers
Security Risks
Before venturing into establishing an Offshoring Development Centre, here is a list of essential requirements to help you determine the best ODC vendor and acquire the most for your businesses.
From the very beginning, it is vital to have a thorough understanding of which country offers the best service without wasting your company’s budget. Alongside the top two IT outsourcing destinations (India and China), Vietnam is a rising destination that is drawing the attention of many foreign businesses. Vietnam has a great pool of skillful software developers with a solid IT background and always stays up-to-date with all the latest technologies. Conducting a comprehensive ODC checkup list can aid in evaluating the suitability of Vietnam as an offshore development center location and ensuring alignment with your project requirements.
How to know which company is suitable for entering a partnership with? Look into their history. Ask their clients. Reviews and interviews from clients are priceless. Through this, you will gain more knowledge of the company and its business activities.
It is recommended to partner up with ODC companies with years of experience. These firms are more familiar with utilizing suitable technologies for ODC projects. They keep up with the trends in the world of technology. More importantly, companies with a long history are likely to be more reliable when keeping projects and information safe and confidential.
There will be less burden when working with an ODC company in a country with no trouble communicating. Companies that want to reduce labor costs can look for employees from countries like software development firms in Vietnam who have no problem communicating in English. Such an advantage makes misunderstandings less likely to happen between the client and the Offshore Development Center company.
Now, after all the research and selection on the country and ODC company, let’s move on to the actual work required to launch an ODC project. We’ll be covering this step-by-step:
| Company Transparency It is substantial that each member within the team understands their role and responsibilities well right at the start. | Suitability For Vacancies Pay attention to every aspect of the applicants, from qualifications and education to soft skills. | Setup ODC Security Measurements What parts of the project will be accessed and authorized by which members. |
| Detailed Development Process Select your approach and outline the timeline for each project, whether it is software updates or just reports. | Giving Clear Instructions Every member should learn how to write any problems to manage them as quickly as possible. | Team Management The offshore development team and the in-house team should be able cooperate with each other if needed |
This model is recommended when the scope and the specifications of the projects are subject to change. Clients can add or remove resources as their project requirements are modified. They will be charged based on the actual amount of time and effort the software developers spend working on the project.
This model is suitable for short-term, small, and medium-sized projects with well-defined scope and specifications. The timeframe and cost are fixed before the project begins, and clients will be charged accordingly.
This model is used for long-term projects with unclear scope and requirements. Within this model, clients will have a whole team at their disposal and follow a simple pricing system. Clients will pay a monthly sum of money that covers the salary of each team member plus overheads, including the outsourcing provider’s administrative and infrastructure expenses.
Both are equally important to the company’s overall success, so the offshore team must receive the same treatment instead of being treated as a separate, supporting team. Include them in your decision-making process and maintain a harmonious relationship between your in-house and offshore teams, which will, in turn, translate into workplace camaraderie and productivity.
An ODC is also a part of your team, albeit remote. Every member in an ODC team needs to be aware of the big picture and act accordingly, ensuring that both in-house and offshore teams work toward a common goal.
Keep your directions short and sharp. Chances are that your offshore team might have a completely different cultural background from yours. They might even have difficulties communicating in English. In these cases, get straight to the point and make sure they understand it.
Use practical communication tools to better demonstrate your ideas. A screenshot or quick video sent to your offshore team can be more helpful than hours of poring over instruction documents. Do meetings and video conferencing via Skype or Zoom to better keep track of the work progress.
Considering Vietnam as a destination for your Offshore Development Center (ODC) brings forth a myriad of advantages. Vietnam ODC services have gained prominence due to the country’s robust IT infrastructure and a pool of talented developers. With a strategic location and a favorable business environment, Vietnam emerges as a compelling choice for companies seeking to establish an ODC.
According to TopDev’s report , Vietnam has about 400.000 IT Enginners and over 50.000 graduated IT Students from over 153 IT Institutions per year.
Another reason that makes offshoring to Vietnam an appealing option is its cost-effectiveness. Vietnam is among countries with low-cost labour; the IT industry is not an exception. In addition, high technology is a sector that is granted tax incentives by the Vietnamese government, according to PwC – Vietnam Pocket Tax Book 2019
And since the primary goal of outsourcing is to reduce costs, here at Savvycom, we always aim to provide the best possible quality at the most reasonable price for a growing business.
Savvycom – Your Trusted Tech PartnerSavvycom specializes in tech consulting, end-to-end product development, and software outsourcing, utilizing digital technologies to bolster business growth across industries. Our focus on delivering high-quality software solutions and products is complemented by a diverse range of related professional services, all customized to meet your unique needs.
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Setting up an Offshore Development Center involves a strategic process. Here's a simplified guide:
Effectively managing an offshore development team requires a combination of strategic planning and communication. Here are some key steps:
Offshore software development offers several advantages, including:
