In recent times, Offshore Development Centers (ODCs) have emerged as a favored solution for software development needs owing to their cost-efficiency and access to skilled technology professionals. For businesses seeking to bridge resource gaps or streamline costs, ODCs present a compelling option, particularly in scenarios where project requirements are fluid or long-term collaboration is sought. These centers offer a pool of professionals spanning various roles such as software engineers, testers, UI/UX designers, and more, supporting project activities under the guidance of client enterprises.

But diving into the world of ODCs can be daunting for the uninitiated. This guide aims to demystify the process and equip you with the knowledge to embark on your ODC journey.

Understanding Offshore Development Centers

An Offshore Development Center, or ODC, comprises a remote team of experts providing technology services such as IT outsourcing, web development, mobile applications, managed services, and software maintenance and upgrades.

ODCs are widely considered the best choice for technology companies. Assuming businesses are falling into a human resource crisis or need assurance for their technology projects, ODCs offer practical solutions to help companies overcome these difficulties. These centers are a lifeline for companies grappling with resource shortages or seeking specialized expertise without the overhead costs. Some popular offshore development services include QA testing, software development, UI/UX design, etc.

Advantages of Offshore Development Teams

1. Cost Reduction: ODCs typically come equipped with infrastructure, saving businesses from hefty investments. This translates to significant cost savings compared to building systems from scratch.
2. Access to Talent: ODCs boast a talent pool of skilled IT professionals, empowering businesses with the expertise needed to drive success. Moreover, these centers prioritize talent development, ensuring a continuous enhancement of skills.
3. Effective Oversight: ODCs operate under the guidance of the client, adhering strictly to requirements and timelines. This level of control enables seamless project management and ensures alignment with organizational objectives.
4. Timely Delivery: ODCs are renowned for their adherence to project timelines, minimizing the risk of delays and fostering a reputation for professionalism.
5. Resource Optimization: By leveraging in-house workgroups, ODCs offer a flexible approach to resource allocation, enabling businesses to scale their IT departments as needed.

While the benefits are enticing, it’s essential to acknowledge the challenges associated with ODCs:

Challenges of Offshore Development Teams

1. Communication Hurdles: Despite technological advancements, communication gaps persist, posing challenges in conveying ideas and ensuring alignment between teams.
2. Cultural Differences: Variances in work styles stemming from cultural disparities can impede collaboration and hinder productivity.
3. Legal Complexities: Navigating foreign legal frameworks can be daunting, with some countries imposing restrictions on foreign entities, potentially complicating business operations.
4. Security Concerns: Distance can exacerbate data security risks, necessitating robust measures to safeguard sensitive information from cyber threats and regulatory scrutiny.

Offshoring vs Outsourcing: What’s the Difference?

While often used interchangeably, outsourcing and offshoring in software development are distinct concepts. To clarify, let’s break down these terms:

Software development strategies on a high level can be grouped into 4 different  groups based on how you execute them and the location:

Software Development Strategies	Done Internally (Insource)	Done Externally (Outsource)
In-Home Country (Onshore)	Onshore Insourcing “in-house”	Onshore Outsourcing
Outside Home Country (Offshore)	Offshore Insourcing	Offshore Outsourcing

Insourcing involves completing specific tasks within the organization, whereas outsourcing is the process of hiring a company or individuals outside the organization to complete the same tasks.

Onshore refers to a company operating within their home country, whereas offshore refers to a company’s operations outside their home country, making it more of a geographical differentiation.

Interestingly, when businesses refer to outsourcing and offshoring software development, they often refer to the option of outsourcing software (which can be done onshore or offshore) and building dedicated offshore tech teams. This can lead to confusion, as many businesses think offshoring software development also means offshore software development outsourcing, which is technically still correct.

Below is a breakdown of definitions to help you identify these two approaches more clearly, avoiding any future confusion.

	Outsourcing Software Development	Offshoring Software Development
What they actually mean	Contracting an external party to help with the software development process.	Building a dedicated team in a different country to support the software development process.
Workforce	Non-employees, engineers work for the outsourcing service provider instead.	In-house employees but located in a different country.
Location	Can within and outside home country (onshore or offshore)	Outside home country (offshore)

Set up an Offshore Development Center in 8 Easy Steps

You want to start a group abroad but don’t know where to start, aren’t you? Maybe you will find it very difficult. But don’t worry, we will guide you through 8 steps to set up an offshore development center.

• Step 1: Determine the vision and requirements of the business.
• Step 2: Choose a suitable location. Here, the location is mentioned not only in the country but the city and region where your foreign team will operate in the future.
• Step 3: Identify the challenges you may face when working with foreign teams from different backgrounds and ethnicities.
• Step 4: Select your foreign software team based on project requirements, technical expertise, years of experience, and soft skills.
• Step 5: Create legal documents with the support of legal advisors from both countries.
• Step 6: Determine the infrastructure requirements for the System used, Internet bandwidth, Technology and communication channel, Server backup, Management policy, Data security system, Access protocol data access and exchange, and KT Process.
• Step 7: Team training and mentoring are a must to ensure smooth interaction between your inbound and outbound teams. To make sure the team works and delivers the project on time, you must define timelines for them to follow.
• Step 8: Set up scrum meetings for regular updates on project progress, feedback, changes, and bottlenecks.

Vietnam ODC Services

According to Statista, Vietnam is among the top 6 leading countries in offshore business services worldwide in 2021. Although Vietnam’s economy has been hit by Covid 19 pandemic, Vietnam strives to become one of the most attractive places providing good ODC services. As a result, more foreign businesses tend to choose companies in Vietnam as ODC providers. Below are some advantages when hiring an ODC in Vietnam. 

Saving cost

Setting up an Offshore Development Center (ODC) in Vietnam does not require too much labor and office space rental costs. Raw materials and human resources in Vietnam are fairly reasonable, and the labor quality is not inferior to other countries. Therefore, it helps save on outsourcing costs and focus their budget on other factors such as marketing, software development, etc. 

Having highly-qualified developers

Foreign businesses can work with talented teams when choosing ODC services in Vietnam. ODC is an appealing choice when some complex projects require human resources with specific expertise and in case the business cannot add suitable personnel in a short time. And Vietnam boasts thousands of talented people fully equipped with proficient soft skills and technical skills. They are highly adaptable, flexible, and can meet strict requirements. That is the reason why Vietnam ODC can provide high-end services to customers. 

Having Governmental supporting policies

The Vietnamese Government currently has introduced policies to attract more foreign investment. Besides, the GOV has approved the National Digital Transformation Programme, which targets businesses that want to adopt digital transformation to boost their production, business efficiency, and competitiveness. 

There are plenty of companies in Vietnam delivering ODC services. HUVITEK takes pride in being among the best software development companies in Vietnam that provide high-quality ODC services. HUVITEK helps businesses solve problems and make breakthrough development with technology. And we boast a team of brilliant and talented engineers fluent in both English and Japanese. HUVITEK is committed to providing you with the most excellent ODC services in many fields, such as software development, mobile app development, web development, UI/UX design, business process management, quality assurance & testing, etc. We strive to meet all stringent requirements and bring you the best service you expect.

At HUVITEK, we have a comprehensive list of services and technologies we can work with. Some examples of services we offer are, among others:

• Custom Software Development
• Web Development
• Mobile App Development
• QA & Testing
• Managed IT Services

Get in touch with us to discuss your future projects!

Offshore Development Center Checklist & Proposal

Technical skills and quality

From the beginning, businesses need to determine which country provides the best service, so your budget is not wasted. Vietnam is gradually becoming a destination attracting the attention of many foreign businesses. Simultaneously, Vietnam also has a large team of excellent software developers with great IT backgrounds and constant updates with the latest technologies.

Well-suited portfolio 

One of the fastest ways to know if a company is good and right for you is to look at the projects they’ve completed. In addition, you can poll information from their customers to get the most objective and honest reviews.

The most helpful advice for you is to cooperate with companies specializing in ODC services with many years of experience. These companies are familiar with using the right technologies for ODC projects, and they also keep up with the most advanced trends in the technology world. Most importantly, these companies are also more reliable in keeping projects and information secured.

Effective communication 

Communication is one of the significant difficulties in working with ODC, as mentioned in the pros & cons of offshore outsourcing. For companies that want to reduce labor costs, finding employees from countries like Vietnam and the Philippines will make job exchange easier because English proficiency in these countries is considered fairlygood. 

FAQs Related to Offshore Development Centers

1. Where can we find an Offshore Development Team?

Well, there are many reliable ODCs in Vietnam that you can consider working with. The most prominent among them is HUVITEK, one of the leading IT companies in Vietnam. Experience in the technology field with many prestigious awards, we understand very well the processes and how to work as a reputable ODC. Therefore, we guarantee to bring the best results to our customers.

2. What is the main difference between Onsite and Offshore Teams?

Onsite Team refers to the team at a particular location. In business, it is often defined as a manufacturing facility rather than an administrative office.

3. What are the best practices for maintaining an Offshore Development Center?

Establishing an offshore development center is only the beginning. The more critical element of an offshore development center is its management. Effective management will ensure higher software development project sucess. Here are some effective methods that can support you in maintaining your ODC:
– Set up a standardized method of communication
– Make sure the documentation of all work in progress
– Treat your foreign team as part of your business, not external organizations
– Create scrum meetings regularly to ensure you are constantly updated on the work.

Conclusion 

Offshore Development Centers present a compelling solution for businesses seeking to augment their technology capabilities cost-effectively. With careful planning and the right partner, companies can unlock a world of opportunities and drive success in today’s digital landscape.

HUVITEK would be vastly grateful if this article could be of any help to you. Besides, based on the above useful information, we hope you will work with ODC successfully and effectively.