Offshore Software Development Companies in 2022 | 2023

What is an offshore software development company? Why do companies use offshore software development companies?

Offshore software development is when a company hires a company with a dedicated software development team to take care of all its custom software development needs. Offshore software development companies provide companies and businesses with custom built software and dynamic web and mobile applications, helping with benefit with significant cost savings and business process optimization. Offshore software development companies have dedicated software development teams that have expertise in catering to the varied requirements of clients from simple coding to custom software development services, application migration, mobile app development and digital product development.

Offshoring software development tasks is fast becoming not just a viable option for businesses and companies but rather a norm. So, what makes offshoring software development such an attractive option and why do companies prefer it?

Given the rapid pace at which the tech industry is growing, deciding to offshore software development is a natural business move and it is done for two main reasons – technology and cost. By outsourcing a range of software development tasks to an offshore firm, companies no longer have the uphill task of hiring employees, onboarding them and training them. At the same time, they get high quality software delivered in the shortest possible time reducing their time to market. Thus, the offshore model helps increase a business’s output and improve its technical expertise without investing extra resources or cost.

Pros and cons of hiring an offshore software development firm

The offshore business model comes with its own set of pros and cons, and any business should take note of both before going ahead with hiring an offshore software company. Let’s first take a look at the advantages of hiring an offshore software development company,

• Higher Profit Margins: It is a very challenging and costly task to hire, train and maintain a full-time in-house software development team. By offshoring the development to a software development agency, companies cut the costs of hiring and training employees as well as the investment in IT infrastructure.
• Access to experienced talent: Working with an offshore software development agency allows you to collaborate with experienced software developers who have years of expertise in their fields.
• Faster time to market: Offshore software development agencies not only produce quality software products; they also ensure the development process is streamlined and efficient getting the job done in a shorter period of time. Hence companies can save valuable time and can shorten the product development cycle.
• Scalability: One of the biggest advantages of working with an offshore software development company is that you can scale up or scale down on the project according to your changing needs and requirements. This scalability factor is not possible if you are working with an in-house software development team.

Now that we have taken a look at the advantages of outsourcing the software development to an offshore software development company, let’s look at the challenges that come along with it. The challenges that accompany the offshore software development model are,

• Data Security: Ensuring data security and integrity is a growing concern around the globe and this can be a challenge when working with an offshore software development agency. The software development agency may not have the same security protocols and standards as your company leading to a serious concern regarding data breach.
• Communication Gap: Communication gaps between the client and the software development agency can arise due to two reasons; the first and obvious reason being language barriers and the second being differences in organisational structure and work ethics. Overcoming this is essential to ensure that the project is a success.

Just like any other business model, software offshoring has both its pros and cons. So, companies have to do their due diligence and consider both the advantages and disadvantages before moving forward with deciding to hire an offshore software development agency.

Top 5 countries to hire an offshore software development team

With outsourcing the software development requirement slowly becoming less of a choice and more of a norm, the next big question is to where can we outsource the development to get the best possible results. Here are the top 5 countries that are popular destinations for outsourcing software development projects,

• Ukraine: Reasonable prices, great communication culture and high standards of education make Ukraine the number one and the most attractive country to hire a software development company from.
• Poland: Another attractive option in Eastern Europe to outsource your software development projects is Poland. A large experienced talent pool and affordable prices makes Poland one of the most popular countries to hire a software development agency.
• Taiwan: With a huge pool of talented and experienced software developers that can be hired at affordable prices Taiwan is fast becoming an attractive option to offshore software development projects.
• India: With one of the lowest market prices and a talented pool of developers India is one of the best budget friendly options for offshore software development.
• Argentina: Quality education, good communication and soft skills and affordable rates make this south American nation one of the best destinations for offshore software development.

With plenty of choices to choose from, companies need look at their needs, requirements, regulations and compliances to decide the country and the company that best suits their business model and project.

Tips to find and hire the best offshore software developer

Hiring the offshore software development company that best suits your company’s needs, requirements and work ethics is the key in ensuring a project is successfully carried out. Here are few tips and pointers to help you make the right decision,

• High Security Standards: Considering that collaborating with an offshore software development company means sharing highly confidential and sensitive data with them, it is important to ensure that the company has high security standards and protocols.
• Experienced Software Developers: It is important to ensure that the team that will be working on your software development project is highly experienced and has the expertise required to handle the same. Companies can verify if the developers have worked on similar projects before and what have been the end results of the same.
• Communication and skills: It is important for the client to ensure that there are communication or language barriers between the software development team and their point of contact in the company. It is also important to ensure that there is transparent and regular communication between both the parties to get the desired outcome.
• Client Testimonials and Reviews: One of the best ways to vet potential software developers is by going through their client testimonials, reviews and experiences. This will give you a fair idea of what to expect.

Choosing the right offshore software development team for the project can male all the difference in ensuring a quality product. Hence it is important to do due research before signing on the dotted lines.

Cost of hiring an offshore software development company & the various pricing models available

The cost of hiring an offshore software development agency varies greatly from country to country and the cost is influenced by a number of factors. Factors such as the complexity of the project, number of developers required, experience of the developers involved, technical requirements and specifications of the project and the duration of the project influence the total cost associated with the project. The average cost of hiring a software developer in South America ranges from $ 35 - $ 70, $ 30 - $ 65 in Eastern Europe and $ 20 - $ 45 in Africa. There are several pricing models such as fixed price model, time and material model and dedicated team model that are used to bill the client.  

In the fixed price model, all the cost details are pre-determined and agreed upon well in advance, whereas in the time and material model the client is finally billed based on the total time and resources spent on the project. The time and material model is best suited when the requirements of the project are constantly changing.

In the dedicated team model, the cost is determined by the developers working on the project and the number of work hours they put in.