Offshore Development Center Models: Everything You Need To Know

Offshore Development Center Models: Everything You Need To Know

When it comes to digitalization, tight budgets and lack of access to talent pools are key reasons that make businesses take a step backward. According to a report by Deloitte, the cost and complexity of implementing new technologies are one of the leading obstacles to digital transformation for businesses, when 31% of companies surveyed in the report cited this as their greatest challenge. To resolve those tackling issues, offshore development center models come in handy. 

If you find yourself interested in Offshore Development Center (ODC) models but don’t know where to start, this article is the right fit for you. Let’s explore the definition of ODC from scratch!

1. What are offshore development center models?

Offshore Development Center (ODC) models are a type of business model that allows organizations to build an offshore development team. This concept enables businesses to set up a remote development center that serves as an extension of their in-house development staff. The ODC model offers numerous advantages, including lower operational expenses, improved development efficiency, and access to a worldwide talent pool.

The ODC model includes a specialized development team that is solely responsible for the client's initiatives. The team is made up of highly competent developers, project managers, quality assurance engineers, and other specialists who operate from the client's location remotely. The ODC model enables businesses to capitalize on the benefits of a global workforce and have access to a pool of highly experienced developers at a lower cost.

2. What are the types of offshore models?

Offshore models can be classified in a variety of ways. However, in this article, we will concentrate on the three most common offshore models: Build-Operate-Transfer (BOT), Dedicated Development Center (DDC), and Managed Services.

A. Model of Build-Operate-Transfer (BOT)

A prominent offshore development center approach is the Build-Operate-Transfer (BOT). A third-party service provider establishes a dedicated development center for the client under this arrangement. The service provider is in charge of establishing the center, supplying the necessary infrastructure, recruiting the team, and overseeing operations.

Once the development center is fully operational, the client can take over operations and manage the center on their own. The BOT model is popular among businesses that wish to build an offshore development center but lack the knowledge or resources to operate the operations on their own.

B. Model of Dedicated Development Center (DDC)

The Dedicated Development Center (DDC) approach entails the formation of a client-specific development team. The crew is solely dedicated to the client's projects and operates remotely from the client's location. The DDC model gives businesses more control over the development process and allows them to tap into the knowledge of a dedicated development team.

C. Model of Managed Services

A third-party service provider provides a variety of services, including software development, project management, and quality assurance, under the Managed Services model. The service provider is in charge of overseeing the entire development process, from project planning through project delivery. This concept is popular with businesses who desire to outsource their entire development process and concentrate on their core business operations.

3. When is it appropriate to use an offshore development center model?

Offshore development center models are a fantastic alternative for businesses looking to decrease operational expenses while increasing development efficiency. When deciding whether to use an offshore development center model, there are several important factors to consider.

A. Savings on expenses

Cost savings are one of the key benefits of an offshore development center concept. Companies can take advantage of the benefits of a global workforce and have access to highly trained developers at a lower cost. Offshore development center models enable businesses to construct a distant development center that acts as an extension of their in-house development team, allowing them to cut operational expenses while increasing development efficiency.

Companies can access a worldwide talent pool through offshore development center concepts. This enables businesses to tap into the expertise of highly competent developers from around the world. Companies can employ offshore development center models to construct a dedicated development team that is solely focused on their projects, giving them better control over the development process and access to specialized knowledge.

B. Improvements in Development Efficiency

Companies can improve their development efficiency by using offshore development center concepts. Companies may expedite their development process, minimize time-to-market, and increase product quality by utilizing a dedicated development team.

C. Scalability

Models for offshore development centers are very scalable. Companies can swiftly scale up or reduce their development workforce based on project requirements. This gives businesses more flexibility and agility in responding to changing market conditions.

4. How do you set up an offshore development center?

Creating an offshore development center can be a difficult procedure. Companies, on the other hand, can construct a successful offshore development center that gives them a competitive advantage with good strategy and execution. The following are the major phases in establishing an offshore development center:

A. Establish Your Goals

The first step in establishing an offshore development center is to establish your goals. What are your objectives in setting up an offshore development center? Which of the following are your key performance indicators (KPIs)? You may create a clear roadmap for creating your offshore development center by defining your objectives.

B. Select Your Location

It is vital to select the best location for your offshore development center. When deciding on a location, consider the availability of skilled developers, cultural compatibility, language proficiency, time zone differences, and the cost of living.

C. Create Your Legal Structure

It is critical to establish the legal structure for your offshore development center. Tax rules, labor laws, and intellectual property rights are all important considerations. When establishing your legal structure, it is recommended that you consult with legal counsel.

D. Create Your Infrastructure

The success of your offshore development center is dependent on the infrastructure you set up. Establishing your office space, IT infrastructure, and communication systems are all part of this process. You must also guarantee that your infrastructure fulfills the relevant security and compliance standards.

E. Build Your Team

One of the most critical tasks in establishing an offshore development center is recruiting your workforce. You will need to hire highly skilled developers, project managers, quality assurance engineers, and others. It is advised that you deal with a reliable recruitment agency that specializes in recruiting for offshore development centers.

F. Provide training and assistance

Training and support for your employees are vital to their success. To guarantee that your staff can operate effectively and efficiently, you must offer them the required training and assistance. This includes giving them the tools, processes, and approaches they need.

G. Controlling Your Offshore Development Center

The success of your offshore development center is dependent on its management. Establishing clear communication lines, creating project management methods, and establishing quality assurance systems are all part of this. It is advised that you choose a specialized project manager to oversee your offshore development center.

Final Thoughts:

Offshore development center models provide businesses a cost-effective and efficient method to capitalize on the benefits of a global workforce. Companies can cut operational expenses, get access to a global talent pool, and improve development efficiency by establishing a specialized development team offshore. Companies should consider cost savings, access to a global labor pool, better development efficiency, and scalability when considering whether to engage an offshore development center model. Defining your objectives, selecting your location, establishing your legal structure, setting up your infrastructure, recruiting your workforce, providing training and support, and operating your offshore development center are all important phases in building an offshore development center. Companies can construct a successful offshore development center that gives them a competitive edge by following these steps.

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