Question 1

What is an offshore software development company?

Accepted Answer

An offshore software development company is an IT firm located outside a client's home country, providing software services like software development, software maintenance and support, web and app development, quality assurance and testing, and IT consulting. It offers cost-effective solutions by leveraging lower labor rates and time zone differences.

These companies allow businesses, including tech giants like Microsoft, Apple, Google, Amazon, and Lyft, to leverage cost efficiencies and ensure 24/7 productivity. According to a Deloitte survey, around 70% of companies outsource at least one of their departments or work aspects to focus on core business functions. US countries usually deploy tasks to offshore development companies in Mexico and Canada.

Question 2

What’s the difference between offshore and onshore software development?

Accepted Answer

Offshore software development involves outsourcing work to foreign countries, capitalizing on cost advantages and diverse expertise. Conversely, onshore software development means deploying your project locally (within the same country), ensuring smoother communication and cultural alignment, though often at a higher cost.

Companies choose to offshore for several reasons:

Cost reduction: 70% of companies outsource projects to cut costs. [Deloitte]. Cost-effectiveness is one of the main reasons why offshoring has gained popularity in the past decade or so. Offshoring software projects can significantly reduce costs, sometimes to as low as one-third of what they might be domestically.
Alternative to recruitment: Due to the high demand for software professionals, offshoring can be a way to build dedicated teams when local recruitment is challenging, especially for non-tech companies.
Increased talent pool: Offshoring provides access to global talent, which can be particularly useful when specific specializations are scarce locally.

On the other hand, onshoring has its own set of advantages:

Quality assurance: USA-based firms are known for their expertise, creativity, and meticulous execution, ensuring a high-quality software solution.
Enhanced control: Easy communication, shared time zones, in-person meetings, and a common language foster seamless collaboration between the development partner and the organization.
IP and business security: Developing software within the US jurisdiction subjects the partner to local laws and authorities, providing a familiar and trustworthy legal framework.

Additionally, "nearshoring" refers to outsourcing to a neighboring country, like Canada or Mexico, offering a balance between cost-effectiveness and geographic proximity.

Question 3

What is the difference between offshore and outsourcing in software development?

Accepted Answer

The differences between outsourcing and offshoring in software development are clear. Outsourcing involves external task delegation while offshoring means delegating tasks to foreign teams. Let’s take a closer look:

Outsourcing:
- Task delegation to external entities for efficiency, expertise, cost savings, or overflow.
- Can involve individuals or companies, regardless of their location.
- Aims to streamline operations and focus on core competencies.
Offshoring:
- A subtype of outsourcing that specifically involves delegating tasks to foreign teams.
- Focuses on leveraging cost advantages, broader talent pools, and continuous operations due to time zone differences.
- Emphasizes geographical dimension, engaging with teams or individuals in a different country.
- Often chosen for cost differentials, accessing a wider talent pool, and benefiting from round-the-clock operations.
- In essence, while outsourcing involves external task delegation, offshoring specifically highlights geographical delegation to another country.

Question 4

What are the pros and cons of offshore software development?

Accepted Answer

Offshore software development has both pros and cons, and it's important to be aware of this before contracting such services. Read on to find out more.

Offshore Software Development Pros

Cost efficiency
- Reduces labor costs
- Global talent at lower expenses
- Used by successful companies like Microsoft and Google
Access to a broad talent pool
- Access top talent worldwide
- Diverse backgrounds and innovative ideas
- Skills or expertise that might be rare or expensive
Increased productivity
- Savings reinvested for improved resources
- Focus on vital business aspects via in-house teams
- Handle technical tasks efficiently via offshore teams
Scalability and flexibility
- Easily scaled up or down based on project requirements
- Quickly adapt to changing project needs without long-term commitments
Foreign market expansion
- Facilitate entry into local markets
- Build trust, understand customers, and save costs
- Overcome language and cultural barriers

Offshore Software Development Cons

Time zone differences
- Affect communication
- May lead to delays and customer dissatisfaction
- Require effective time management
Cultural barriers
- Impact teamwork
- Conflicts due to varying mindsets and behaviors
- Different holidays and work schedules
Communication obstacles
- Misunderstandings due to language barriers
- Less effective virtual communication
- Potential for misinterpreted instructions
Security risks
- Significant risk of information leakage
- Requires protection of sensitive data
- Varying IP risks across countries

Question 5

How much does an offshore developer cost?

Accepted Answer

Offshore developer costs range from $25 to $70 per hour, depending on the region and the developer's experience level. While these rates can fluctuate, there are general benchmarks that can provide a sense of global development costs.

To offer a clearer perspective, we'll also provide average rates by region for comparison:

Region	Hourly Rate for Junior Developer	Hourly Rate for Middle Developer	Hourly Rate for Senior Developer
Eastern Europe	$25-42	$35-56	$45-70
Asia	$25-42	$35-56	$45-70
Africa	$35-44	$40-52	$45-55
Latin America	$35-44	$40-52	$45-55

Question 6

How much does it cost to hire an offshore development company?

Accepted Answer

The cost of hiring an offshore development agency is from $20 to $50 per hour. However, this depends on the region, expertise, required equipment and software, project complexity, and agency size.

Here’s a cost breakdown for specific services:

Region	Hourly Rate for Junior Developer	Hourly Rate for Middle Developer	Hourly Rate for Senior Developer
Eastern Europe	$25-42	$35-56	$45-70
Asia	$25-42	$35-56	$45-70
Africa	$35-44	$40-52	$45-55
Latin America	$35-44	$40-52	$45-55

Costs can also vary significantly by region. For instance, developers in Eastern Europe or South America might charge between $25-$50 per hour, while those in Southeast Asia could charge as low as $10-$30 per hour.

Question 7

Why hire offshore developers?

Accepted Answer

Hiring offshore developers provides a strategic edge for cost-effective scaling and innovation. They offer top talent from low-cost regions, ensuring 24/7 productivity. Access to a global talent pool enhances diversity and skills. Effective communication tools mitigate challenges. A well-integrated offshore team drives innovation, accelerates time-to-market, and yields long-term cost savings.

The success story of Admios, an offshore software development company, and Off the Grid, a key player in San Francisco's mobile food scene, exemplifies the impact of this approach. Faced with operational challenges in 2016, Off the Grid partnered with Admios to implement a technology-driven strategy, streamlining various aspects of their operations.

This catapulted Off the Grid to a prominent position in the mobile food movement, with their platform now pivotal to the operations of hundreds of employees and over 300 third-party food trucks, serving millions annually.

Question 8

How do I hire an offshore software development team?

Accepted Answer

Hiring an offshore software development team is about more than just seeking cost benefits; it's about tapping into global talent and ensuring the collaboration aligns with your project goals and company culture. Here's a step-by-step guide to hiring an offshore software development team:

Create project requirements: Clearly outline the technical and communication needs of your project. This includes identifying the specific skills, expertise, and technologies required.
Research potential regions: Investigate countries or areas renowned for their software development capabilities. Consider factors such as time zone compatibility, cost of hiring, and talent pool quality.
Use online platforms & referrals: Use online reviews and reach out to your network for any recommendations to determine what companies will align to your needs.
Evaluate expertise and experience: Thoroughly review portfolios, client testimonials, and case studies of potential teams to gauge their level of expertise and industry experience.
Set a budget: Geographical location significantly impacts the cost, with regions like Eastern Europe typically being more affordable than the USA. Remember that a lower rate in some cases might mean compromising on quality. Even top-tier firms in Asia might offer competitive rates compared to your local market, but always factor in hidden costs such as subscriptions, equipment, and potential travel expenses.
Decide on the location: Factors to consider include the cost of living, ease of business due to local governance, infrastructure, labor resources, and data privacy. Regions such as Ukraine, Belarus, Poland, and Romania have emerged as top Eastern European software hubs, boasting vast IT specialist numbers and producing a considerable amount of tech graduates.
Check pricing models: Get detailed quotes. Understand their pricing model – hourly, fixed-price, or dedicated teams. While cost-saving is a benefit of offshoring, don't compromise quality for cost.
Conduct interviews: Schedule in-depth interviews and technical assessments with potential teams. This could include coding tests or discussing past projects in detail.
Run a pilot project: If possible, initiate a small-scale project with the team to assess their capabilities in a real-world scenario.
Discuss tools & methodologies: Ensure both sides are comfortable with the tools and methodologies that will be used for project management, communication, and quality assurance. Understand their development methodologies (Agile, Scrum, Waterfall, etc.). Ask about their tools for project management, version control, and collaboration.
Negotiate pricing: While offshore development can be cost-effective, ensure the pricing reflects the quality and expertise you are seeking.
Prioritize security: Have discussions regarding data security and ensure the offshore team is compliant with necessary regulations and best practices.
Establish regular communication: Given the physical distance, set up regular check-ins, updates, and feedback sessions to keep the project on track and ensure clarity.
Documentation: Ensure all terms, project specifications, and deliverables are clearly documented and agreed upon by both parties.
Ask for references and testimonials: Request references or testimonials from previous clients. Contact some of their past or current clients for feedback.

For tailored recommendations on outsourcing partners suitable for your project, let us know your needs and our team will help you find your perfect solution. You can browse our Marketplace for more details.

Question 9

How do I hire an offshore developer for a startup?

Accepted Answer

Take these steps to hire the best offshore developer for your startup:

Define and outline your specific requirements: With defined requirements and needs, you can find a company specific to what you want. Depending on what you need to build, you will need a developer with expertise in specific technologies, tools, or integrations.
Tap into your network for recommendations of reputable offshore developers: Attending startup-centric events like TechCrunch Disrupt or use platforms like LinkedIn to connect with fellow founders who've successfully hired offshore talent.
Use online review platforms to evaluate different options, their track records, and testimonials: Platforms like DesignRush offer reviews and ratings of offshore development firms. Look for agencies or individuals with proven experience in your industry or technology stack.
Shortlist the top offshore developers: Narrow down the companies that align with your startup's needs.
Interview the shortlisted candidates: Ask relevant questions and assess their skills, experience, and cultural fit.
Ensure the team understands your business and aligns with your goals: If your primary goal is rapid market launch, ensure they can work in agile sprints and provide quick turnarounds. If brand identity is vital, ensure they can incorporate that into the development process.

Hiring offshore can offer cost savings, access to global talent, and round-the-clock productivity. But it's crucial to invest time in the hiring process to find the right match for your startup's unique needs.

Question 10

What questions should I ask offshore software development companies during screening?

Accepted Answer

The questions you should ask offshore software development companies during screening include:

What specific technologies and platforms are you most proficient in and how up to date are you with the latest tech trends?
How do you ensure your software professionals remain the best in class? What initiatives do you have in place for continuous training and professional development for your staff?
Can you share case studies or references from past projects like mine that would act as testimonials of the team's performance, challenges they've overcome, the solutions they've provided, and their project management acumen?
How proficient is your staff in English? Can you provide evidence of their proficiency or ongoing language training initiatives?
How do you handle communication across different time zones and geographical barriers to assess commitment to maintaining clear channels of communication, and flexibility?
What are the unique aspects of the local culture I should be aware of that might impact our collaboration?
Which tools do you use for project management, collaboration, and code versioning, and do you use specific technologies like Python or Java? (You can use technologies and tools specific to your needs)
Which development methodologies do you primarily use, and why? How structured is your approach when implementing these methodologies?
Describe your quality assurance and testing processes, along with methodologies that you use to identify and rectify issues.
How do you manage changes or adjustments to the project scope, including any additional costs that might arise due to changes, and strategies to weave in sudden alterations without compromising on delivery or quality?
What measures do you have in place for data security and protection of intellectual property?
Can you break down your pricing structure, and are there any potential hidden costs?
If we wanted to transition the project in-house in the future, how would that process work and how would you assist in acclimating our in-house team to the project and ensure smooth transitioning during the process?
How do you approach conflict resolution in case of disagreements or challenges?

These questions aim to help you understand, assess, and ensure the reliability and capability of an offshore development team, forming the foundation of a potentially successful collaboration.

Question 11

How to manage offshore software development companies?

Accepted Answer

The key to obtaining successful offshore software development services is to manage those projects efficiently and follow the best practices in outsourcing software development projects. With the right preparation and organization, an offshore development project can drive just as great of results as an onshore project.

To keep your project on track, despite different locations, time zones, and sometimes languages, follow these steps:

Set expectations: Share your brand goals and ensure that the firm you choose understands them and can truly help you reach them.
Communicate constantly: Ensure there are people on your offshore team who can speak the same language as you fluently; stay in touch daily to update tasks and talk shop.
Create deliverables: Work with your project manager to set an achievable timeline; ensure the team works to reach those deliverables on time.
Utilize video conferencing: Take advantage of high-quality screenshare video conferencing systems such as GoTo Meeting, Zoom, and Skype Business to speak in real-time.
Let them do their job: You should hire an offshore software company because of their expertise and not just because they'll save you money. If you decided to trust their expertise, give them time to do what they do best: deliver custom software solutions.

Question 12

What are the best offshore software development agencies in the U.S.?

Accepted Answer

Kanda Software
- 4.8 rating with 14 reviews on DesignRush; 4.7 rating with 7 reviews on Google
- Top clients: Facebook, Meta, Food Network, Twitter, Discovery Channel
Admios
- 4.8 rating with 4 reviews on DesignRush
- Top clients: Converse, Collective Health, Shopware, Terraformation, Conductor
Azumo
- 4.9 rating with 10 reviews on DesignRush; 4.7 rating with 13 reviews on Google
- Top clients: Lionbridge, Bayer, Accenture, Verizon, Nuance
BairesDev
- 4.9 rating with 25 reviews on DesignRush; 3.6 rating with 136 reviews on Google
- Top clients: Google, Burger King, eBay, IBM, Pinterest
Codup
- 5 rating with 43 reviews on DesignRush; 4.7 rating with 6 reviews on Google
- Top clients: Harrods, Steelcase, One Tree Planted, Vaxxen, Ingram

Scroll up to learn more about these companies and discover other best offshore software outsourcing providers chosen based on industry reputation, team size, hourly rate, client feedback, and more. To refine your search, you can sort companies by location, reviews, hourly rates, team size, and budget.

Top Offshore Software Development Companies

Best Offshore Software Developers Rankings

Need Help Selecting The Right Agency For Your Project?

Need Help Selecting The Right Agency For Your Project?

Top Software Development Companies by Expertise:

Latest Trends Related to Offshore Software Development