What is Offshore Development Center (ODC)- A Complete Guide 2024

What is Offshore Development Center (ODC): A Complete Guide 2024

Businesses are continuously looking for methods to save expenses and obtain an upper hand in the age of globalization. One tactic that has been quite popular recently is the creation of Offshore Development Centers (ODCs). Offshore Software Development Center services vary greatly in price per hour depending on the country.For example, hourly salaries in India might be between $30 and $45 in 2024. This increase in demand highlights that ODCs are becoming increasingly recognized as a practical option for companies of all sizes.

However, what are ODCs precisely, and how can your company use them? This thorough article will explore ODCs, examining their fundamental ideas, benefits, implementation best practices, and considerations.

Overview Of Offshore Development Centers (ODCs)

Are you familiar with the acronym ODC? It is an acronym for offshore development centers, which are the "talk of the town" since startups and SMEs who want to cut costs and hire skilled programmers embrace them. Offshore Development Center (ODC) is your foreign office with tech talent. Establishing a specialized software development team abroad enables businesses to access a worldwide pool of highly qualified programmers. It is designed to speed up software or app development at a lower cost.

Typically, ODCs are established in countries brimming with tech professionals, offering favorable business environments and striking a balance between affordability and quality.

ODCs are popular with small and medium businesses because they provide access to a wider range of talent than they might find locally. In essence, an ODC acts as an extension of your company, with remote developers working on your projects according to your business practices.

ODC vs Outsourcing: What's the Deal?

The key distinction between outsourcing and ODCs boils down to location. ODCs are offshore, whereas outsourcing can happen anywhere. But that's not the only difference. While some outsourcing models resemble ODCs, there's a subtle twist: Offshore Development Center functions like a dedicated unit with its people, infrastructure, and processes, all serving one specific client.

Let’s learn more about the difference through a table:

[ Also Read - 20 Laravel Ecosystem in 2024: All You Need to Know ]

Types of Offshore Development Center

Some companies generally offer traditional Offshore development center models, which they can customize to fit a client's needs. Let's look at the models:

1. Build-Operate-Transfer (BOT)

In this model, you hire a service provider to create your ODC. They handle all the funding, hiring, and infrastructure setup. The service provider might get some revenue from the center, but eventually, they will have it handed over to you entirely.

2. Managed ODC

In this model, the service provider is also responsible for setting up the infrastructure and handling administrative tasks. Thus, you get a remote ODC that the service provider continues to manage. This model is a good option for companies that do not have the time or resources to manage their own ODC.

3. Product Engineering ODC Model

Businesses may begin project development using this offshore development center strategy even if they hire one employee. You read correctly! With this strategy, companies may expand their operations by hiring one to ten employees. The project will last 30 days to a year, including a one- to two-week setup period. Businesses can assemble teams in this manner based on needs.

4. Build-to-scale ODC Model

Thanks to the Offshore Development Center concept, businesses may help their internal team by hiring a committed group of ten or more specialists. This model's setup will require seven to thirteen weeks, and the project will take more than a year.

5. Dedicated Offshore Development Center

The most often used kind of ODC is this one. According to this strategy, an organization appoints a group of committed developers to work on its projects. Although this team can be found anywhere in the world, it is usually based in a country where living expenses are less than in the corporation's home country. With this strategy, the firm and the development team may work closely together and greatly influence the development process.

6. Staff Augmentation

A business may use this adaptable approach to hire individual developers or teams of developers to work on particular projects. Companies with short-term development needs or need to augment their development staff can choose this arrangement.

Various factors, such as an organization's size, funding, and development needs, will dictate the type of Offshore Development Center (ODC) needed. Each of these factors must be thoroughly considered before choosing an ODC model.

Advantages of Offshore Development Center

It's not enough to know "what is offshore development center"; you also need to know its many advantages. The offshore development center benefits include the following:

1. Access Top Talent Instantly:

Use a pool of qualified programmers instead of going through the effort of interviews. ODCs offer highly qualified experts who have undergone extensive screening and are prepared to take on your project and produce excellent results.

2. Significant Cost Savings:

ODCs offer a budget-friendly way to access expertise. They handle their infrastructure, hardware, and software, reducing overall expenses. Plus, with flexible hiring models, you only pay for the resources you need.

3. Effortless Scaling Up or Down:

Scaling internal resources can be complex. Offshore Development Center makes it easy to adjust your team size based on project demands. Need more developers? No problem. Need to scale back? Done. Using an ODC to manage your workforce is simple and easy.

4. Expertise at Lower Costs:

Get access to professionals with deep knowledge of specific technologies at a fraction of the price. ODCs allow you to leverage this expertise without breaking the bank. Just provide some light oversight to ensure everything runs smoothly.

5. Faster Development with Extended Hours:

ODCs operate in different time zones, allowing for extended working hours and faster development cycles. This gives you more time to review completed work and provide feedback, leading to a quicker turnaround and high-quality results.

6. Global Reach Made Simple:

ODCs are an affordable means of increasing your worldwide visibility. They may assist in localizing your solutions, which will facilitate market expansion and increase your reach.

How Offshore Development Center Functions?

Following the explanation of ODC and its benefits, let's now understand how it functions. In the ODC model, companies establish a branch office in a new country with lower development costs to expand their business operations. ODC professionals handle various tasks, including development, design, testing, marketing, maintenance, and more. Hiring from offshore development centers allows you to access skilled resources at a reduced cost.

For instance, a US-based company can hire experts from a dedicated Offshore Development Center in India for significantly less than hiring in other countries. They can even hire them on a contract basis for short-term projects to benefit from their expertise.

The following summarizes the essential elements to take into account when learning ODC operations:

• Setting Up an ODC:

Several factors need careful consideration when setting up an ODC, including selecting the right talent, navigating legal formalities, and establishing the necessary infrastructure.

• Team Selection:

The team composition in an ODC should be based on project requirements. Ensure the chosen professionals are well-trained and aligned with the project's technologies and methodologies.

• Infrastructure:

In an offshore development center, preventing security risks and fraud requires strong security protocols, encryption, and two-factor authentication.

• Task Allocation and Coordination:

In an offshore model, specialists are given work according to their experience and skill set. They then work together easily to complete their responsibilities effectively.

• Quality Assurance:

After project completion, rigorous testing procedures are implemented to ensure the highest quality of deliverables. This includes aspects like performance, functionality, and other relevant considerations before handing the project to the client.

Building an Offshore Development Center: A Step-by-Step Guide

Before venturing into the world of offshore development teams, take a moment to clearly understand your project's requirements. Having a well-defined project scope, even a rough outline, is crucial for choosing the right Offshore Development Center model. This initial planning will help you determine if offshore development is the best fit for your project delivery needs.

For example, starting a long-term project with a continually changing scope requires continuing technical help. In certain circumstances, an ODC model might be the most tactical choice.

1. Define If an ODC is Right for You.

ODCs are not a one-size-fits-all solution. Here are some scenarios where setting up an ODC could be beneficial:

• You require specialists with niche technical expertise.
• Your company needs to scale up rapidly.
• You want to save on infrastructure, operational management, and hiring costs.
• You seek a long-term collaboration with a team adhering to your company's standards.

2. Choosing the Perfect Location

Cost efficiency is undeniably a major factor when selecting your Offshore Development Center location. However, the ideal location goes beyond just low prices. Here are some additional considerations:

• Expertise in specific technologies relevant to your project.
• Language proficiency of the workforce.
• Development of the local IT sector.
• Developer salaries and hourly rates.

3. Finding the Right Partner

A reliable offshore development partner is crucial unless you choose to build your ODC from scratch. They will be with you from project inception to completion and even beyond. Here is how to find the best partner for your needs:

• Research their experience in setting up ODCs and the models they offer.
• Ensure the company has a strong understanding of your specific needs and the local market.
• Check client reviews on platforms like Clutch to gauge their service quality.
• Compare ODC setup costs from various providers to assess the cost-effectiveness of your investment.
• Estimate the partner's flexibility in adapting to your project's specific needs.

4. Build Your Dedicated Team

Once you have chosen an offshore development partner, it's time to assemble your dedicated team. This stage involves recruiting and interviewing candidates. Decide on your level of involvement - do you want to participate in every step, join interviews, or simply approve final selections? Remember, various engagement options are available when working with offshore development firms.

Following these steps, you can set up an Offshore Development Center more clearly and confidently. Remember, planning and choosing the right partner will ultimately lead to a successful and productive offshore development experience.

Who Benefits Most from Offshore Development Centers (ODCs)?

While the offshore development trend is booming, not all companies are ideal candidates for an Offshore Development Center. The following is a synopsis of who can use ODCs most successfully:

Companies with Overflowing Project Loads:

Many businesses simultaneously take on many development projects. However, their in-house resources might be sufficient to handle them efficiently. ODCs provide a solution by enabling faster development, supplementing internal expertise, and meeting tight deadlines.

Businesses Seeking Specialized Skills:

If your company needs help finding developers with specific skill sets, ODCs offer access to a vast pool of experts. You can hire talented programmers with the exact skills and experience your project demands, filling any gaps in your local team.

Cost-Conscious Organizations:

Businesses with tight budgets for software development projects may find that outsourcing to developing nations with cheaper labor prices can be a game-changer. Significant cost savings are possible without sacrificing the caliber of the development effort.

Startups and SMBs:

Limited resources and a lack of in-house development expertise are common challenges for startups and small and medium-sized businesses (SMBs). ODCs provide a cost-effective and efficient way to manage large software development projects, giving these businesses a significant advantage.

How Can IPH Technologies Assist You With ODC Setup?

From setting up ODC to effectively managing the operations, IPH Technologies will help you every step of the way. We have a pool of highly qualified personnel with outstanding technological know-how who can assist you in setting up your offshore development center . Additionally, our company offers flexible employment models and sets up transparent and unambiguous channels of communication that facilitate productive teamwork. Our years of experience and knowledge in managing offshore teams will enable us to help you correctly through the challenges of establishing and refining an offshore development center.

We will assist you in embracing a simpler, more efficient, and less expensive development environment for your company. Working with IPH technologies to set up your ODC will benefit you, as you will receive excellent outcomes at a reduced development cost. We will also help you overcome any barriers related to data security, cultural and communication gaps, legal compliance, etc. You can reach us at any time with further questions.

[ Also Read - Top 12 Reasons to Choose Laravel for Web Development in 2024 ]

Conclusion

This thorough article has given you all the knowledge about offshore development centers (ODCs). We have discussed their definition, operation, benefits, how to set up your own ODC, recruiting procedures, and the crucial difference between ODCs and outsourcing.

Offshore Development Center is a smart decision that enables businesses to grow their internal staff and access new markets worldwide. It provides many advantages, such as a quicker time to market, lower development costs, and access to a global pool of competent specialists.

We hope you now have all the information you need.