The information technology sector is growing rapidly as businesses are becoming increasingly digital. With the advent of cloud computing, AI, and big data technologies, IT operations have become significantly more complex. This has led to an increased demand for specialized IT service providers who can manage these processes efficiently and cost-effectively.

Operational expenses are one of the largest ongoing costs for any business, particularly those with a large volume of technology infrastructure. Reducing IT operations cost by even a small amount can greatly impact your bottom line, especially if you operate on a tight budget. This can be made possible with offshore development. A Deloitte survey states that to save costs, about 70% of businesses seek to outsource their software development projects.

What is offshore development, its benefits and disadvantages?

Globally, offshore development is becoming more and more popular. During the forecast period of 2021–2026, the worldwide IT outsourcing market is anticipated to generate revenues of USD 425.90 billion. According to forecasters and researchers, the most significant benefits of IT outsourcing are cost savings, operational effectiveness, and consistency. Using the software development services of a different organization in a different place, typically from another country, to benefit from cheaper taxes and prices is referred to as offshore software development.

You can shorten the development process and easily access qualified people by outsourcing software development tasks, including coding, software support, maintenance, etc. The numerous advantages of offshore software development make it a preferred choice for large organizations, small and medium-sized businesses, and start-ups worldwide. Businesses are allowed to grow quickly, when necessary, in addition to lowering their operating expenses. However, this doesn’t mean that the offshore development model has no disadvantages.

Advantages	Disadvanatges
Flexibility- A piece of software typically requires at least four people to develop, namely a project manager, QA engineer, UX/UI designer, and software engineer. The absolute minimum in terms of software development is that. Solution architects, project managers, product managers, API engineers, frontend engineers, backend engineers, UX/UI designers, DevOps, and business analysts are generally members of the team. What if you are unable to put all of these folks on the payroll? One significant benefit of offshore software development is evident here: You have the freedom and flexibility to meet your needs whenever it is most convenient for you. Additionally, by outsourcing software development, you can give your complete attention to business expansion and product planning.	Security issues and concerns- Criminals who operate online are getting more and more skilled. Data is the new gold, and it is being stolen. However, this issue can be resolved by agreeing to an NDA and talking with your offshore software development company about the security infrastructure.
Time-saving- You can complete the project more quickly if you have a committed team. This frees up your time so you may concentrate on your primary business rather than worrying about software development. You can work to expand your business in this way. Offshoring gives you access to a large talent pool that has previously received training in software development. These members can assist you in resolving issues and overcoming obstacles because they have vast expertise and understanding in their field.	Cultural differentiation- Not every IT consulting firm is familiar with Western culture and productivity expectations. You might discover that their paid holidays don't line up with yours, confront odd government rules, or have tax problems you're not accustomed to. While some nations are worse than others at this, customers frequently have positive experiences in European nations like Ukraine or other offshore nations with similar languages and customs.
Scalability- Businesses may expand quickly thanks to offshore software development, which is one of its main advantages. Outsourcing experts have the necessary training and expertise and are prepared to begin creating the product, whereas an internal team might not have the necessary skills. You may be confident that the offshore software development team has the necessary skill set for your business or project because working for an offshore development company demands staying up to date on the latest technology.	Time zone difference- Management problems might occasionally arise if you and your contractors are separated by several time zones. It can be challenging to hold phone meetings while at work. However, the majority of IT outsourcing businesses are prepared for this and have adjusted work schedules significantly to accommodate customer phone calls. Make sure to bring up this topic with the businesses you are considering.

Statistics and facts on offshore development consulting

Most businesses use outsourcing as a primary strategy, and as an employment trend, it is unstoppable. Since there is a talent shortage, it seems that businesses would look for low-cost IT staff in nations with low living costs. The phrase “fishing where the fish are” simply refers to potential consulting clients. Many countries with “low cost of living” are suddenly discovering that their IT sector may serve as a growth engine that can be hired by businesses all over the world. Many countries, like Mexico, the Philippines, and Ukraine, now acknowledge IT consulting as a substantial contributor to their GDP.

India controls a significant portion of the global technology sourcing market- India is said to account for 7% of the world market for sourcing technology, according to the Ministry of Electronics and Information Technology. This covers the market shares for both software and hardware. The average hourly income for Indian developers, which is $15 as opposed to $100 for an American developer, is one of the main factors influencing this. India continues to be the top outsourcing destination for some of the world’s biggest IT businesses because of all this and more.
China is in the lead with the fastest growth over the last ten years- China’s revenue rose from $1.38 billion to $106.46 billion in the previous ten years. This identifies it as the ODC with the highest growth rate. The Indian technology services sector saw revenue increase from $4 billion to $58 billion within the same period. On the other hand, the value of Ukraine’s offshore development centers is currently $5 billion. However, it’s also crucial to remember that manufacturing outsourcing contributes significantly to China’s growth.
India remains the best country for offshore development centers- India continues to be the top offshore location for businesses worldwide, notably for web development services, according to the Global Services Location Index (GSLI) for 2019. In reality, according to a report by IT behemoth Deloitte, 22% of the participating organizations in its survey currently outsource to India, and about 59% of those companies do so already. This appears to be fuelled by a large and expanding pool of web developers and engineers in India who are skilled in a wide range of technologies, including ASP.NET, ZenCart, Joomla, AngularJS, WordPress, Magento, and ReactJS.

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But how can offshore development reduce your IT costs?

A lot of small and midsize businesses end up spending more than they need to on their IT infrastructure because they don’t have access to affordable outsourced solutions or vendors that understand their specific needs. Hiring us would offer you benefits in the following ways:

Hiring a third party proves beneficial- If your core business activities are hampered by your current IT operations, then hiring an experienced outsourced provider will help you reduce IT cost significantly. However, hiring in-house staff might not be the best option for your business given the reasons: businesses that rely on IT are more likely to be affected by employee turnover than those without a technology component. Hiring additional staff to make up for attrition can be costly and time-consuming.
In-house talent-hiring hassle is avoided- If you decide to hire in-house staff to manage your operations, you have to take into account the salaries and benefits of your employees, their training requirements, and the overall cost of hiring in-house. This can be significantly more expensive than hiring a third-party provider. When you hire in-house staff to manage your IT operations, you also have to factor in the burden of managing these employees. You’ll need to hire an HR representative to oversee payroll and benefits, including health insurance, time off, vacation time, and so on. You’ll also have to go through a significant hiring process, including sourcing qualified candidates and conducting interviews. This can take a lot of time and effort, and you may not even find qualified candidates in your area.
Cloud monitoring and backup- Another way to reduce your cost and improve your efficiency is to partner with us who offer remote monitoring and cloud backup services. Remote monitoring enables us to review the status of technology remotely to ensure that it is running smoothly. This monitoring service can help identify potential issues before they become significant problems. Cloud backup is another important service that can help you avoid data loss and keep your operations running smoothly. No matter what size your business is, it’s important to have a reliable backup solution in place to avoid data loss and costly downtime.

Conclusion

Your company can benefit from and take advantage of several opportunities provided by offshore software development. You can devote more time to your main line of business and concentrate on your growth strategy while leaving software development in the hands of a trustworthy partner like us.

We have a team of brilliant and skilled software engineers who would be delighted to work with you to make your idea a reality and, who knows? create the next unicorn. Please feel free to browse our portfolio or get in touch with us to talk about your project.