Unlock the Power of An Offshore Development Center (ODC)

Developing great software that truly meets market needs takes time, skill, and effort. When local talent is limited, many companies turn to offshore development centers to bridge the gap. This model means setting up an office in another country where you can hire all the necessary experts. As a result, you can access international talent with lower operational and labor costs.

In this blog, we'll explore what is ODC, and why offshore software development centers are so valuable. I'll mention key factors for setting one up successfully.

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• Top 10 IT Outsourcing Companies in Vietnam
• Detailed Breakdown for Offshore Software Development
• Breakdown of Hiring An Offshore Software Development Team

What is An Offshore Development Center (ODC)?

An offshore development center (ODC) is a branch of a company set up in another country that provides specialized software development services.

An ODC is different from a traditional software outsourcing model. Instead of outsourcing work to an external company, the ODC acts like a subsidiary of the main company, fully integrated into its operation. Beyond developers and testers, the ODC team also has a technical manager, project manager, UI/UX designers, and HR. They all help the project run smoother.

ODC is usually located in a country with lower living costs with available necessary resources and infrastructure. This setup helps the company save on expenses like office space and equipment and access global talents.

Here’s what an ODC typically does:

• Handle the entire software development lifecycle of coding, testing, and maintaining software.
• Manage projects from start to finish, including planning, allocating resources, and keeping budgets in check.
• Work closely with your in-house team to ensure smooth integration and share knowledge.
• Keep you updated on project progress, challenges, and solutions.

Core Members of An Offshore Development Center

An ODC often provides many services, so they need specific specialists to handle various tasks, like:

• Project Manager: Guides the project, manages resources, keeps the team on track, and ensures deadlines are met.
• Account Manager: The bridge between you and your ODC team. They handle communication, ensure your needs are understood, and represent your interests within the ODC.
• Business Analyst (BA): Understands both the technical and business needs. They document requirements clearly and keep everyone on the same page.
• Software Developers: Write the code that turns your ideas into a functioning software product.
• Quality Assurance (QA) Testers: Test the software at every stage to catch bugs and ensure it works as expected.
• UI/UX Designers: Create a user interface (UI, the screens and buttons people interact with) or a smooth user experience (UX, how users feel while interacting with your software).
• Human Resources (HR): Manages hiring, onboarding, and maintains a positive work environment for the ODC team.
• IT Support (optional): Depending on your ODC setup, you might have dedicated IT staff to run hardware, software, and overall technical infrastructure.

5 Common Types of Offshore Development Center Models

Here are the most common ODC models:

Classic ODC: A dedicated development team working in a different location. Your company provides the resources, infrastructure, and project management. This means you create an overseas version of your in-house team.

Staff Augmentation: You rent developers with specific skills for a set period, and they work with your existing team. This is ideal when you need to fill specific skill gaps or scale your team.

Project-Based ODC: The ODC handles everything from planning to launch, so you can focus on other areas. This model is suitable for specific and well-planned projects with a clear scope.

Managed Service ODC: This is like having a full-service development partner. Your ODC team not only handles the projects, but also infrastructure, recruitment, and project management. Choose this if you need a hands-off solution.

Hybrid Model: This model mixes elements from different ODC models to create a customized solution. Like, you can have a dedicated team for core development, use staff augmentation for specialized tasks, or outsource specific project phases to a project-based ODC.

>> You may consider:

• Top 11 Staff Augmentation Companies in Vietnam
• Staff Augmentation VS. Outsourcing: Which Is Better?

Advantages of Offshore Development Centers

Cost Savings

One of the main benefits of offshore development centers is to save money. Clearly, when you set up an ODC in a country with lower living costs, you often pay less for developer salaries, but not reducing the quality of work.

Besides lower wages, other operating costs such as office rent, infrastructure, electricity, and internet are also reduced. You know, with these savings, you can invest in more important things for your projects. And, the final result is high-quality products with a lower cost and gain a competitive edge.

For example, compared to big IT hubs like the United States, Eastern Europe, etc., whose living costs are pretty high, setting up an offshore development center in India or Vietnam is a much cheaper solution.

Wider Global Talent Pool

With an ODC, you're not limited to local resources. Instead, you can access to highly skilled developers from around the world, so have more chances to find suitable talents.

Besides, many professional ODCs invest heavily in training their teams to meet international standards and catch up with the latest technologies. Thus, if you need specialized skills that might be hard to find locally, these teams can provide. Plus, they can also bring fresh perspectives and innovative approaches to solve problems due to their expertise and experience.

Project Continuity

Your ODC team is often in a different timezone, so they often work during hours when your local team isn’t active. This means your work keeps moving 24 hours a day, thereby shortening development timelines.

Besides, in cases where your parent company meets any disruptions, the ODC can step in and continue to run important tasks. As an extension of your in-house team, they follow the same risk management protocols and are ready to adapt to any challenges. As a result, your project continues to progress, and your business maintains continuity even in difficult times.

Easier Scaling

You know, an ODC is like an extra arm for your in-house team. They will take on tasks that might overwhelm your local resources. This support helps you scale your IT department more easily as your projects grow. Instead of worrying about hiring and training new staff locally that can take time and effort, your ODC gives you immediate access to skilled experts for a larger workload.

Clearly, the ODC helps you allocate resources more efficiently, and distribute the workload more evenly, so the project will run more smoothly.

Challenges of Offshore Development Centers with Solutions

Communication Barriers

Communication challenges can come from different time zones and cultural backgrounds. For example, it can be challenging to schedule meetings if there’s little overlap in working hours. Or, cultural differences might affect how to transfer messages, so causing misunderstandings.

To solve these issues, you need to set clear communication rules from the start. Additionally, use tools like video calls, shared project management platforms, and regular updates to keep everyone on the same page. Always create an open and supportive environment where team members feel comfortable asking questions

Intellectual Property (IP) Concerns

Always protect your intellectual property carefully when working with an ODC. This means making sure your valuable assets like ideas, code, and designs aren't theft or misused. You can use strong legal contracts like non-disclosure agreements (NDAs) to clearly define who owns what and what each party can do with the information.

Moreover, use secure data transfer protocols when sharing protect sensitive information between your in-house team and the offshore team. These measures lower the risk of data breaches and your intellectual property remains under your control throughout the project.

When Do You Need An Offshore Development Center?

ODCs have many benefits, but they aren't a one-size-fits-all solution. Here are some specific scenarios where an ODC is a better choice:

When having a tight budget: As mentioned before, ODC can help save costs. So, if your budget is limited, choose ODCs to significantly reduce development costs.

When needing to fill skill gaps: If your in-house team lacks specific expertise, an ODC can help you access global developers with specialized skill sets that might be difficult to find locally.

When needing to scale up quickly: If you need to scale up your development team rapidly to meet project deadlines, ODCs have available talents to meet your needs in a short period.

When needing 24/7 development: An ODC in a different time zone can provide continuity for your project and keep the development process moving forward, even when your in-house team is not active.

When core business activities are more important: Let the ODC team takes on the development workload, and use your internal expertise for high-value tasks. This doesn’t make your internal team becoming overloaded.

How to Set Up an Offshore Development Center (ODC)?

Setting up an ODC overseas is not easy. Before implementing, you need to carefully plan everything to make sure the final target is met. Now, I'll guide you through building, running, and managing a successful ODC with simple steps:

Step 1: Define Your Goals

>> Read more: Offshore Software Development Rates By Country

Step 3: Choose an ODC Partner

Try to find a partner who has the offshore development center services you need. Shortlist companies with proven expertise and experience in your industry, or better with successful similar projects. They also have to be competent in modern development methodologies. 

Plus, suitable work culture and operational processes are really vital as they affect directly how you communicate and understand each other. Additionally, verify that the partner follows strong data security practices and meets both international standards and local regulations.

>> Explore more: What to Look for in An Outsourced Software Development Company?

Step 4: Build Infrastructure

No matter whether you choose to fully outsource or not, you still need a reliable and secure infrastructure to run everything smoothly. This includes things like office space, IT systems, hardware, software, stable internet connectivity, power supply, and backup systems. 

Additionally, you need secure communication channels, collaboration platforms, and project management tools to manage teamwork. Let's implement agile methodologies to have a flexible and efficient development process. 

Lastly, protect your sensitive business data with strong security protocols. They are secure data transfer methods and compliance with data privacy regulations.

Step 5: Assemble your team

In this step, the main goal is a complete ODC team with enough needed skills through a careful recruiting process. When you've chosen the right talent on board, set a comprehensive onboarding process to help them adapt to your company culture, get used to tools and communication protocols, and clarify their roles.

Next, allocate resources and assign tasks based on each team member's strengths. Also make clear which parts of projects your ODC team can access and who authorizes those accesses. This can reduce the risks of sensitive data leaks and protect your IP rights.

Finally, don't forget to use clear communication channels like email, video chat, online meetings, etc. With those, you can minimize issues like misunderstandings, delays, or even worse project failures. I recommend using project management tools like Jira, Trello, and Asana to make communication easier.

Step 5: Manage and Monitor the ODC Team

To ensure your ODC always maintains high-quality work, you have to continuously manage and monitor them. First, you need to track performance through KPIs like productivity rates and bug fix turnaround times. Use tools such as charts and burndown reports to evaluate overall team performance.

Also, regularly review the code to make sure it always meets your standards. Then, set up a strong feedback loop between the in-house and offshore teams to help everyone stay aligned, solve challenges, and adjust to improve performance over time.

>> Read more: 

• How To Manage A Software Development Team?
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ODC vs Outsourcing: What is the Difference?

Both Offshore Development Centers (ODCs) and outsourcing let you to access talent from beyond your local area, but they differ in several key ways:

Relia Software: A Trusted Offshore Development Center Services Company

Relia Software is dedicated to helping businesses achieve their development goals through strategic ODC partnerships. With a proven success record, we've delivered outstanding results for clients worldwide.

A Case Study in ODC Success: MEKARI

Mekari, a growing HR and employee engagement platform, partnered with Relia Software in 2017 to achieve scalability, security, and better user experience. Through agile development, expert engineers, and a dedicated Vietnam Offshore Development Center in Ho Chi Minh City, we help Mekari transform from a startup to a leading SaaS player with over 1500 employees, serving millions of users.

You can walk through our Offshore Development Center Services here! If possible, contact us today to discuss your specific needs in building an offshore development center.

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Final Thoughts

An Offshore Development Center (ODC) is a great way to get the skilled developers you need, no matter their location. By partnering with an ODC, you can expand your IT team, access global talent, and keep projects moving forward, all while saving time and money.

So, why don't you use ODC to level up your software development projects? Let's try and see the benefits it brings in the long-term.

>>> Follow and Contact Relia Software for more information!