Offshore development center model - blog cover

The company that is about to open an ODC – offshore development center unalterably collides with many questions that follow outsourcing. What is the correct way to come up with creating a dedicated center? What steps should be taken, and to which points should we pay attention? How to structure the dedicated development team?

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HOW TO SET UP AN OFFSHORE DEVELOPMENT CENTER?

The list of key premises for opening an offshore development center is quite wide. The informational system is decentralized and isn’t united into a single one, and the documentation has been lost or outdated. The business requests to expand app functionality are impossible to feedback timely. The queue of requests for eliminating errors in the program code or its finalization grows faster than the IT service desk can process. If the aforementioned facts complicate the company’s life, it should refer to outsourcing and find a partner for building up an offshore software development center.

Customers, while conducting a tender among the service providers, should pay attention to such features as:

  • Availability of practical experience in building a dedicated offshore development center
  • Financial reliability and their business level
  • Availability of specialists with needed technical background and knowledge

Also, it is very important to ensure that the outsourcing provider is using automated project management software and if he will give access to the customer to it. Furthermore, the customer should understand how to motivate the project team and ways to keep permanent feedback. Estimation of the risks possible from the providers’ side should be maximally foreseen. This is hard to master that skill, but having at least some plan will help with problem-solving or avoiding risks.  

If there is an opportunity, it is strongly recommended that the customer sees the offshore software development center with their own eyes to have the imagination of where customers’ outsourcing efforts will be given. Having a personal talk with the development team is also favored, as they are potential co-workers in the future. Another valuable moment is if the provider has resources reserved for the future possible center extension (infrastructure, staff).

If that isn’t enough for the customer to learn the contractor’s resume, there is an extra process for checking his quality – it realizes some pilot project. But that is a completely different long story about outsourcing. Here we are asking a question trying to give an answer to it: how to build a reliable structure with ODC offshore development center.

Building up a clear interaction system for the company IT department and dedicated development team – one of the first elements to lower the possible risks. It isn’t enough to announce to all of the collaborators that all of them are “in one boat” from now to create a system like this. It’s important to form the development team, distribute the specialists’ duties, and ensure correct work of motivation levels.

There are different options for building the structure of the ODC offshore development center model. Most analysts, developers, and testers may locate in a region away from the customer, but the local office can be on the spot. It’s important for the project managers and specialists to respect their dedicated development team and accept them as the expansion of their own team.

The dedicated offshore development center is a team assembled for the project implementation. This is not only a group of outsourcing developers. The entire system should be a team, from staff developers to managers. All the units of the team implement the different functions. However, their forces are aimed at a similar goal: maximal efficiency for the project accomplishment. But of course, the dedicated team can be dismissed after the project release.

The dedicated offshore development center formation depends on the specifications of every project, but the main structure remains the same.

Looking for some additional details on the dedicated development team?

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OFFSHORE DEVELOPMENT CENTER MODEL: CONTRACTOR

Within the frames of the offshore development centers, the contractor groups up the development team of IT specialists, locating them in one of their offices, matching it to the customer’s needs, and creating all the infrastructure for its work. The team is concentrated only on the work for the customer. The customer chooses the field and volume of the outsourcing services provided: this can be the development of new solutions, expanding the functionality of the existing system, migration to other platforms, testing, software support, maintenance, etc.

Picture that explains the ODC Offshore Development Center: Provider's Internal Structure Scheme
Offshore Development Center: Provider’s Internal Structure Scheme

The key roles in a team within the contractor’s side are given below:

Account Manager is the one who works with the company’s clients and grants them loyalty. This specialist ensures the execution of all the tasks needed for a client, looks for a personal way to meet each customer, keeps staying in touch with them (an important thing even after all the work is completed), offering them new services. In other words, the role of the account manager requires this person to ensure that the client is satisfied with the company’s work, keep working with them, and recommend them.

Project Coordinator is a specialist whose prior task is to manage the offshore dedicated development center: priorities, task completion planning, communication control, and operative issues solving. A coordinator isn’t actually a technical role. But most of the coordinators are ex-developers or testers. The primary coordinator’s task is to bring the customer’s idea to life in a timeframe set, using proper resources. In the limits of that task, the coordinator should build a development plan, group up the team, set the project working process, provide feedback to the customer from the developer team, remove the handicaps on the team’s way, and make timely product release.

Analysts mostly monitor the profile market: prices, competitive environment, and consumer demands. They are located in a marketing department and make marketing analysis. Their duties consist of collecting data where trends are highlighted from. In general, they analyze the company’s business processes and improve them, model company activities, and develop managing processes. In other words, their function is business engineering, a “home version” of ERP systems and consulting.

OFFSHORE DEVELOPMENT CENTER MODEL: CUSTOMER

The customer’s empowerments are a little bit (even much more) wider than the contractor’s ones. As the last is doing only the “executor” role, following the instructions, the customer’s empowerments actually consist of dictating those instructions. Saying more carefully and simply – the customer is doing management. The timeframes are estimated or requested by the customer mostly. The customer is doing the analysis of the market, research on the trends, etc., providing its development center with the data that will assist in the better insight of the project.

Picture wit the scheme of the ODC Offshore Development Center: Customer Internal Structure Scheme
Offshore Development Center: Customer Internal Structure Scheme

The key roles on the customer’s side are:

IT Manager is ahead of IT. Their function is to manage all IT operations. The bigger company is, the bigger the IT department is. Project managers have to subordinate under their command, empowered with a part of their duties. In such cases, the manager isn’t an expert in all the fields, so he keeps control of the subordinates’ execution process. Moreover, the IT manager plans the development and evolution strategy, compiles the budget, etc. But all the expert functions are given to managers of the respective department.

Development Manager directs efforts to raise the company’s income. First, the development manager defines a client communication policy, incepting it into all the departments. The development manager is also tightly involved in working process arrangement and atmosphere within the company: their duties often include organization and control of the office workflow, and management of the internal reports, due to the company’s successful influence on overall profit. The development manager is a “section” between the staff and top management, so receiving the reports from the employees, they are setting the report for the IT manager and all of the top management.

Exploitation Manager is responsible for the sufficient and methodical exploitation of the project outcome during the project lifetime. A plan for distribution and exploitation should be developed and frequently updated with the guidance of all partners involved in the project. Furthermore, the exploitation manager should supervise any intellectual property affairs which may crop up in the corporation.

OFFSHORE DEVELOPMENT CENTER BENEFITS

There are many benefits to setting up an offshore development center, including the following:

  • Cost savings. One of the biggest benefits of an offshore development center is cost savings. By outsourcing software development or IT services to a remote location, companies can take advantage of lower labor costs and reduce their overall expenses. This can be particularly beneficial for companies that are operating in a highly competitive market or are looking to cut costs in order to remain competitive.
  • Access to talent. Another key benefit is access to talent. By outsourcing development work to a remote location, companies can get into a wider pool of resources, including highly skilled developers, designers, and IT professionals. This can be beneficial for companies that are seeking specific technical skills or are looking to scale their development team quickly.
  • Improved time-to-market. Offshore development centers can also help companies improve their time-to-market by allowing them to complete projects more quickly and efficiently. That can be especially beneficial for companies that are operating in a fast-paced market and need to quickly bring new products to market in order to remain competitive.
  • Increased scalability. By setting up an offshore development center, companies can also increase their scalability. This allows them to quickly scale their development team in response to changing business needs, such as increased demand for a particular product or service.
  • Improved quality. Finally, it can also help companies improve the quality of their software products. This is because offshore development centers typically have access to a highly skilled and experienced workforce, as well as best practices and tools that can help improve the quality of software products.

CHALLENGES TO SET UP AN OFFSHORE DEVELOPMENT CENTER

While there are many benefits to setting up an offshore development center, there are also several challenges that companies need to be aware of.

  • Communication barriers. One of the biggest challenges of an offshore development center is communication. Due to the remote location of the ODC, it can be difficult to maintain clear and consistent communication between the in-house and offshore teams. This can lead to misunderstandings, miscommunication, and delays in completing projects.
  • Cultural differences. When outsourcing to a remote location, it is important to be aware of cultural differences and how they may impact communication, collaboration, and the project’s overall success.
  • Time zone differences. It can also be a challenge for offshore development centers. When working with a remote team, it can be difficult to coordinate schedules and ensure that all team members are available at the same time.
  • Intellectual property concerns. It is important to ensure that the offshore team has access to the necessary intellectual property and that it is protected throughout the development process.

BEST PRACTICES FOR SETTING UP AN OFFSHORE DEVELOPMENT CENTER

It is really important to follow best practices to ensure the success of an offshore development center.

Define the scope of the project

Before setting up an offshore development center, it is essential to define the project’s scope clearly. This will help to guarantee that everyone is on the same page and that the project is completed successfully.

Choose the right location

When choosing a location for an offshore development center, it is important to consider factors such as cost, availability of talent, and infrastructure. It is also important to consider cultural differences and time zone differences in order to ensure a successful collaboration.

Set clear goals and expectations

It is important to set clear goals and expectations for the offshore development centers. This can help to ensure that everyone is working towards the same end goal and that the project is completed successfully.

Establish a strong communication plan

In order to ensure clear and consistent communication, it is important to establish a strong communication plan for the offshore development center. This can include regular meetings, clear lines of communication, and clear roles and responsibilities for each team member.

Hire the right talent

Finally, it is important to hire the right talent for the offshore development center. This includes finding individuals with the right technical skills, as well as individuals who are a good fit for the company culture and who can effectively collaborate with the in-house team.

An offshore development center can be a highly effective way for companies to reduce costs, access a global talent pool, and improve their time-to-market. However, it is necessary to be aware of the challenges associated with offshore development centers and to follow best practices in order to ensure a successful collaboration. By carefully considering the scope of the project, choosing the right location, setting clear goals and expectations, establishing a strong communication plan, and hiring the right talent, companies can successfully set up an offshore development center and reap the benefits of outsourcing.

CONCLUSION

Reaching the expected result depends on the right choice of an offshore development center services provider, smart management system, and communication with the customer. The customer can freely use the technical experience of the provider, and his team gained while cooperating with the customers in a similar sphere where solving comparable tasks. The development team, from the manager to the staff employee, focusing only on one customer, will have the opportunity to learn his features thoroughly. Also, such a team will prioritize tasks correctly while receiving them from business users and will offer acceptable solutions operatively. Eventually, the tasks related to information system development and advancement are completed professionally, bringing top quality and efficiency.

IT Startups often consider the offshore development center a good start for product development. This approach gives them a perfect balance of price and quality. You may check our recent article, “5 Reasons IT Startups Can Benefit from the offshore development center model”, to learn how startups can use the ODC model to ensure that their go-to-market time and budget will be as quick and efficient as possible.

If you are still reading here, you seem interested in the offshore development center model, and we are sure you have something to say. Perhaps you have been dealing with outsourcing for a long time, which makes you are already experienced in this sphere. If we match your ideas, or they are completely different, which is even better, you can share your opinion in the comments section below.

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Frequently asked questions

What is an offshore development center (ODC)?

An offshore development center is a dedicated unit established by a company to manage software development or IT services remotely. The ODC typically operates as an extension of the company’s internal development team, working closely with the in-house team to complete projects and deliver high-quality software products.

What are the main offshore development center benefits?

This engagement model has opened a number of great benefits for businesses and developers:


  • Cost savings

  • Access to talent

  • Improved time-to-market

  • Increased scalability

  • Improved quality

What are the popular locations to set up an offshore development center?

ODCs are typically located in countries where the cost of living and labor costs are lower, allowing companies to take advantage of these lower costs while still accessing a highly skilled workforce. Some of the most popular locations for ODCs include Eastern Europe, South Asia, Latin America, etc.

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