Post pandemic, the global demand for software development has heightened drastically. But, higher market volatility and global demand for technical experts have compelled businesses to adopt a better revised approaches like Offshore Development Centers (ODC) to build resilient and flexible business models. The total revenue of IT outsourcing market in 2021 exceeded 9.8% than previous year which is close to $396.3 billion. An offshore development center will be an extended IT/Development team built overseas to work on your software development project that will eliminate some challenges such as finding specialists with required expertise, scalable technology resources, security, etc. as well as allowing you to eliminate redundant expenses
Offshore Development Center (ODC) is basically an integrated business model suitable for both startups as well as large companies. ODC means setting up a dedicated remote team of IT professionals to augment the on-premises team. You can hire a group of highly qualified software engineers and programmers overseas to work diligently on your software development project. You can profit from having talented resources without making a long-term commitment by contracting with an offshore entity because you can easily scale-up or scale-down depending on the project requirement. Moreover, an offshore development business model provides a dedicated delivery center with all the requirements like infrastructure set-up, software specialists, software development, design, quality testing, security audits, business operations and more.
An example will help to better illustrate how an offshore development center operates. Let’s say you work for a company that is creating software and wants to shorten the time it takes to go to the market in order to get an advantage over competitors. You might be able to accomplish this objective without worrying about the availability of tech talents and incurring too much expense by working with an offshore development center.
Establishing an ODC will be more appropriate when you are creating a large-scale project that needs ongoing support and updates, for example a Fintech enterprise application. It is advisable to set up a specialized offshore development center after evaluating the project requirements to define the project scope, duration, and cost estimations. Turning to an offshore development model helps to deliver faster when there are long-term large projects or a set of projects bound together. In the ODC model, all you have to do is supervise and maintain the work quality. While the model offers a speedy, economical, and more productive alternative to put your business output expeditiously.
Furthermore, it is thoughtful to consider setting up an ODC when your project needs particular technical expertise. Access to technical experts runs short most of the time, so you need to put in strenuous efforts to get technical experts as per the market requirements. Especially while developing a complicated solution, it is difficult to find Artificial Intelligence, Data Science, Machine Learning and Cyber Security experts easily. An offshore development center is a large pool of cross-functional teams packed with various specialized skillsets.
A data breach can have catastrophic reputational and financial repercussions if your project involves a significant amount of security-sensitive data, such as financial or personal customer information. Therefore, the Offshore Development Center model can be a better fit than the other outsourcing strategies if you have a project that requires a strong cybersecurity team and is sensitive to security issues.
When compared to conventional outsourcing, offshore development center can be considered as an upgraded solution for IT businesses.
Seven key criteria which makes ODC different from outsourcing:
| ODC | Outsourcing |
| Based on team size and time based contractual agreement | Scope bound agreement |
| Core team with flexible staffing | Utilization based model |
| Strategy and value-based approach | Task oriented relationship model |
| Complete customer control over the development process | Customer control over development processes depends on the engagement model |
| Best suitable for large and long-term projects | Works great for small and mid-sized projects |
| Immediate access to full-fledged team | Team ramp-up depends on the project needs |
| Limitless team scaling opportunities | Rare team scaling opportunities |
Cost-effectiveness: The main advantage of offshore development center is reduced direct and indirect costs such as infrastructure, recruitment, training, equipment etc.
Extended working hours: Having a specialized team working offshore in a different time zone assures you a continuous development of your product.
Focus on core competencies: ODC model allows you to focus on core business functionalities and helps you create a physical presence in an offshore mark with minimal cost.
Scalability: The number of resources that your business needs may fluctuate depends on the nature of the project and requirements. An ODC model will make the resource allocation process less complicated because the offshore team can work accordingly the tasks from in-house team.
Improved security: Well secured physical & IT infrastructure with all required facilities to accommodate ODC of various capacities. ODC model is more secure when compared to conventional outsourcing practices. Your team will be isolated in a separate office and the software & security will be kept up to date to ensure high-end data protection.
Innovative and quality work: A dedicated offshore development center provides access to pool of talented and skilled professionals as per your business requirements and that leads to enhanced quality of work. You will have assurity on the quality of work for the fact that you will be having the complete control over the professionals assigned to the projects in an ODC team.
An ODC is profitable, but it is not completely risk-free. However, it can be easily overcome.
Performance expectation mismatch vs output reality might be the first risk you encounter with the offshore team. A clear hiring procedure, appropriate resource training, and regular feedback can help to mitigate or lessen this risk. Another difficulty that can arise while working with remote teams is project management. The creation of SOPS, an escalation matrix, a task hierarchy, etc., can manage this. Moreover,
When you see the above benefits, setting up an offshore development center is always an excellent option, especially if you want to do high-quality work quickly in a cost efficient and a secure way.
KGISL is a leading ODC / OCC (Offshore Competency Centre) partner of global organizations, helping them outsource or setup IT competency centers in India.
Why because we have
Regardless startups, SMEs, or large-scale enterprises, we equip them to hire highly qualified software professionals and build reliable software solutions. Since, KGiSL is a multiproduct software company, having access to large talent pool, our clients have the luxury to scale up and scale down their team with the right talented skill-set, on-demand. Our customized engagement models, flexible cost structure, in-house infrastructure and a large talent pool makes us a preferred outsourcing partner for global majors. Over the last two decades, we have set up 10+ OCCs in Coimbatore for global clients of capacity ranging from 10 seats to 3000 seats.
BOT (Build-Operate-Transfer): In BOT model, we create the environment, develop the project, and operate it. After a particular period of contract, eventually transfer the ownership to the client.
Dedicated Offshore Model: This model provides dedicated IT, infra, network support and highly qualified professionals for the client’s project.
Shared Model: This model offers shared infrastructure, network support and resource.
BOM (Build Operate Maintain): This model is an end-to-end approach as per the client requirements.
Explore how KGiSL’s ODC services help clients to gain increased productivity at lower operational costs.
Setting up an ODC is a perfect solution for your business to save time, and cost and focus on your core business activities without worrying about human resources and other issues. Moreover, it will take over the challenges and boost your business scale. Would you like to explore further? Get in touch with us.