Offshoring Software Development: A Complete Guide for IT Leaders

Jeffery Thompson
Innovative Leader in Custom Software Solutions: Jeffery Thompson, Founder of BIT Studios
IT Consulting
17 min read
Published: Mar 8, 2023
Updated: Apr 20, 2023
Offshoring Software Development - Offshore software engineers working together across the globe

Are you considering offshoring your software development? Offshoring can provide several advantages for IT companies. These benefits include lower labor costs and better access to skilled developers.

But before deciding to offshore, IT leaders should understand all aspects of this strategy. It requires effort to evaluate potential geographic boundaries and technology infrastructure needs. You also need to find trustworthy service vendors to deliver reliable services.

This guide will cover what you need to know when offshoring software development.

What Is Offshore Software Development?

Offshore software development involves hiring people from other countries to work for you. It’s an excellent way to get experienced professionals to do your work at a lower cost.

Offshore development is different from onshore and nearshore development. With onshore, you need to hire employees living in the same country. Meanwhile, nearshore means you outsource to nearby foreign countries. Offshoring removes these limitations to your access to global talent.

Offshore software development means hiring developers from farther countries. It helps businesses access skill sets that may be outside their own country. Moreover, offshoring can also help companies save money. It’s because they can hire developers from countries with lower living costs.

What Are the Software Services You Can Offshore?

Most offshore development centers provide a wide range of software services. Here are some of their standard services:

Cloud Computing

Cloud computing allows people to use technology without having to manage it. It’s like renting a computer from someone else instead of having your own. When you rent from the cloud, you pay for what you use. You don’t have to worry about buying and maintaining expensive hardware or software.

The cloud comprises many computers that can store and process data. So, if one computer goes down, it doesn’t affect other data. This feature makes the cloud more reliable and quick. It also allows people to access their information wherever they are. They only need an internet connection to get the file they need.

Offshore software development companies can help you build and maintain cloud computing systems.

Mobile Application Development

Mobile app development is the creation of software for mobile devices like smartphones. These apps enable users to perform various tasks. For example, you can use them for checking emails or playing games.

The demand for mobile applications is increasing. With offshore software development, you can meet those needs quickly and cost-effectively. It’s why companies hire IT experts from other countries for mobile app development.

Offshore developers can help you create apps that work for iOS and Android platforms. They can also design mobile user interfaces and develop databases. If you need help optimizing apps, you can hire offshore developers with this skill.

QA Services

Quality assurance (QA) tests the product’s functionality. It also checks the software code for errors or bugs. QA ensures that your app performs according to industry standards before its release.

With offshore QA services, you can ensure that your software meets customer requirements. They will also test if your product works across multiple devices.

Web Application Development

Web development services include creating software applications on a web browser or server. Some examples of web applications include online shopping carts and content management systems.

Offshore web developers can help you create web apps that load quickly and are easy to use. They ensure that the app is secure, works well on different devices, and uses the latest web standards.

UI/UX Design

UI/UX stands for user interface (UI) and user experience (UX) design. It involves creating software that looks good, works well, and is easy to use. Here, designers create attractive software interfaces, develop prototypes, and analyze user feedback.

Offshoring these services can help you save time and effort. Offshore software development companies can help you produce compelling designs with their services.

What Are the Key Benefits of Offshore Development?

What Are the Key Benefits of Offshore Development? [Infographcis]

Offshoring development can provide many advantages to companies. It includes cost savings and access to a global pool of talented developers. Let’s take a look at how outsourcing can help businesses succeed.

Faster Time-to-Market

You can reduce the time it takes to develop products with offshoring. It helps you avoid the lengthy hiring process of a local team. Offshore teams also work round-the-clock, allowing them to finish projects quickly.

Moreover, most outsourcing offshore software development companies already have their agile process. This advantage makes it easier for them to iterate and launch projects quickly.

Access to the Latest Technologies

An outsourcing software development company can give you access to the latest technologies and tools. Many offshore companies have experienced developers who know different programming languages and frameworks. With this, IT companies can launch their projects faster while providing reliable performance.

Qualified Talent Pool

You can open up a larger pool of qualified talent for businesses through offshoring. It provides access to software developers from all over the world. It means you have more choices and can easily demand more skill sets.

Minimal Risks

Offshore software development also reduces the risk of project failure. By outsourcing to offshore companies, businesses can quickly scale projects anytime. It gives them more flexibility and control over their projects.

Reasonable Development Costs

Lastly, offshoring can significantly reduce the cost of software development. It helps companies save more money on wages and other expenses. As a result, businesses can allocate more funds to marketing and other operations.

Offshore software development is an excellent strategy for IT leaders. They can stay competitive in the global market without spending much.

Offshoring Development Services: Exploring Your Options

Offshore software development comes in four methods. Here’s how each method work:

Hiring a Dedicated Team

This method is the most common type of offshoring. Companies hire an offshore software development team that works exclusively on their project. It requires an upfront cost, but it gives you complete control over your team and project.


  • More control over the project
  • Full access to talent and resources
  • Ability to hire multiple developers


  • Can be expensive to set up
  • Difficult to scale up or down

Outstaffing or Team Extension

Outstaffing involves hiring an offshore developer as part of your existing in-house team. It requires minimal setup and is ideal for companies with tight budgets.


  • The cost is lower
  • Flexible team size
  • Access to dedicated resources


  • Less control over the project
  • Limited access to talent and resources

On-Demand Developer Services

If you have a short-term project, you can hire on-demand developers. They are independent contractors that work for you at a specific time. Hiring them allows you to move on to the next project without commitment quickly.


  • Cost-efficient for short-term projects
  • Flexible working hours
  • Access to specialized skills and resources


  • Not suitable for long-term projects
  • Difficult to control quality and accuracy

Project Outsourcing

In project outsourcing, you assign specific tasks to an offshore software development company. It eliminates the need to manage a remote team and allows you to focus on other aspects of your business. It also gives you more control over the process.


  • Easier to manage
  • Quicker turnaround time
  • Cost-efficient


  • Limited control over the project
  • Difficulty in scaling up or down

What Should You Look for When Hiring Offshore Software Developers?

When hiring offshore developers, you need to look for those who match your needs. Here are some of the things to consider when looking for an offshore development partner:


Hire an offshore software development company with experience in the technologies you need. Ask about their experience working on similar projects and how they handled them. You can also ask for their work portfolio to see their capabilities. You should also look for developers who are well-versed in agile methodologies.

Offshore software development companies should commit to delivering high-quality products. Check if they follow a rigorous development and quality assurance process. You should also ask if they use the latest technologies and industry trends.


Offshore software development teams should be flexible with changes or updates. They must respond quickly and efficiently to feedback from other team members.

So, you must ask your offshore partner about their communication channel. Ensure that they can easily collaborate with your team.

Time and Process Management

Time and process management are essential to your offshore software development project. Look for companies that have transparent processes and can deliver on time. They should also be able to provide regular updates. This way, you can monitor the progress of your project.

Here are some of the different development processes:

  • Waterfall Model. It’s a traditional sequential development process involving distinct software development stages.
  • Scrum Model. In this method, you must break down the project into smaller parts. Then, you will deliver each task in sprints or small increments.
  • Agile Methodologies. These include breaking down the project into smaller chunks and developing them simultaneously.
  • Lean Software Development. It focuses on creating value quickly while minimizing waste.

Development Cost

Finally, look for offshore software development companies that offer cost-effective services. Evaluate their rates against other vendors and compare their quality of service. You should also ask if they provide additional services after the project’s completion. It can include software maintenance and updates.

Moreover, you need to consider their development pricing models. Here are some of them:

  • Fixed Price Model. This pricing is based on the project’s estimated time and cost. Most people prefer this model because it helps them stay within budget.
  • Time and Material Model. The vendor charges you for workers’ time and materials for the project’s completion. It’s ideal for complex projects with unexpected outcomes or results.
  • Dedicated Team Model. In this pricing model, you hire a dedicated offshore team to work on your project. It means the team will only work for your company.

Technology Stack

Finally, your offshore development company has the right technology stack for your project. Consider the programming languages, frameworks, databases, and other technologies required for your project. It will help ensure that your product meets industry standards and customer expectations.

Here are some of the software development frameworks that you might consider:

  • Python. It’s a programming language for building AI, web applications, and more.
  • Java. It’s one of the most popular and reliable languages used for software development. You can use this framework to develop mobile apps and enterprise solutions.
  • AngularJS. This JavaScript framework helps developers build responsive and dynamic web applications.
  • Node.js. This open-source JavaScript runtime environment is ideal for building server-side and networking applications.
  • React. This library allows developers to create efficient and interactive user interfaces for web applications.

Measuring the Success of Offshore Software Development

Offshoring software development can be successful if you measure it against specific criteria. It will help you evaluate the performance of your offshore teams. You can also analyze if their outputs meet your expectations. Moreover, it can help you improve your projects and stay competitive in the global market.

Metrics for Measuring Progress and Productivity

It’s essential to evaluate the performance of your offshore team. Here are some metrics that can help you measure your team’s productivity:

  • Number of Completed Tasks. It measures the number of tasks finished in a given period.
  • Velocity. This metric tells how quickly the team can complete tasks and deliver results.
  • Efficiency. It’s the ratio between completed work and time spent on it.
  • Quality Assurance Tests Passed. It measures the number of tests that your offshore software development team passed.
  • Time to Market. This metric tells the time the developers spent delivering the product.

Techniques for Evaluating the Quality of Deliverables

You must evaluate the quality of deliverables before you launch your software. Here are some of the techniques that you can use to measure the quality:

  • Usability Tests. Test the user-friendliness of your product by conducting usability tests.
  • Performance Tests. Evaluate the responsiveness and performance of your software with performance tests.
  • Security Tests. Make sure that your product has no security vulnerabilities by running security tests.
  • Compatibility Tests. Check if your product works across multiple devices and browsers with compatibility tests.
  • Automated Tests. Use automated testing tools to evaluate the quality and accuracy of your deliverables.

Measuring Customer Satisfaction

Customer satisfaction is another factor to consider when offshoring software development projects. Here are some metrics that you can use:

  • Number of Customer Complaints. It measures the number of customer complaints reported within a period.
  • Customer Retention Rate. This metric is the ratio of customers retained over time.
  • Customer Surveys. Ask customers to complete surveys to evaluate their satisfaction with your product.
  • Net Promoter Score (NPS). This metric measures how likely customers are to recommend your product or service.

Methods for Tracking Cost Savings and ROI

Cost savings and return on investment (ROI) are essential metrics for development projects. They will determine if partnering with offshore software development companies is worth it.

Here are some of the methods that you can use to track them:

  • Cost Savings Calculations. It measures how much money your organization saves from offshore software development projects.
  • Time Tracking Reports. Use time tracking reports measuring the cost savings of offshoring.
  • ROI Calculations. Evaluate the ROI of your offshore project by calculating the net income over time.

What Are the Challenges of Offshoring Software Development?

Offshore development services can help you save money, and access experienced developers. But before you outsource your projects, you should be aware of the challenges that come with them. Here’s what IT leaders need to consider when hiring offshore software developers.


Your offshore development services provider must ensure that all sensitive data is secure. It means you must prevent unauthorized access, use, or destruction of the information. If there is a breach, it could have serious consequences.

Organizations should invest in security measures such as encryption and authentication protocols. Also, you must have a data monitoring system for your offshore team. It will protect your assets and prevent malicious attacks.

Additionally, you must clarify the responsibilities of your offshore vendor. It should include security standards that they must maintain in software development. You should review these policies regularly to ensure that vendors follow them.

Time Zone Differences

Another challenge of outsourcing software development companies is the time difference between countries. It could cause communication issues and delays in project completion. So, having regular meetings with your offshore team is essential. It will ensure every member is on the same page.

You can also use project management tools to ensure the completion of tasks on time. These tools help you track progress, assign tasks, and collaborate with offshore teams.

Cultural Barriers

You must also consider the cultural differences with your offshore development team. It includes different standards in customer service, communication styles, and team dynamics.

To avoid problems during the project, all team members must understand each other. It includes sharing a common language and values. Set your expectations and inform the whole team about them.

Moreover, you should choose a company that closely relates to your company values. It will help improve your collaboration and efficiency.

Quality Assurance

One of the challenges of offshore development services is maintaining quality. You must ensure that your product meets customer requirements before releasing it.

You can use a quality assurance process to test your product’s functionality. It can also check your software code for errors or bugs. QA test ensures that your software works as intended. It will also reduce reiterations and updates on your app.

Day-to-Day Control

It’s also essential to consider the day-to-day control of your offshore team. You must have transparent processes and procedures in place that everyone must follow.

Using project management tools is also helpful in tracking your team’s progress. Here, you can assign tasks and collaborate with your offshore software developers. It will help you stay in control of the project without micromanaging.

Legal issues may also arise when you are outsourcing software development. So, you must know the laws and regulations of the country you are doing business with.

You should also have a detailed agreement with your outsourcing partner. Make sure it defines the scope of work, payment terms, and working hours. You can also add other relevant information about your offshore developers. It will help avoid legal disputes or misunderstandings in the future.


Offshoring can benefit many IT companies, particularly in software development outsourcing services. It helps businesses access qualified talent and the latest technologies at competitive prices.

When you offshore developers, you must ensure that they are reliable and trustworthy. Ask questions and research reliable companies. This way, you can ensure your project will stay on track and won’t cost too much. It may take a while, but it’s worth the effort!

If you need an offshore software development company, BIT Studios can help you. We have a skilled global team that can help you get the best results for your project. Contact us today to get a free assessment.

Offshore Software Development FAQs

When Should You Hire Offshore Software Developers?

Here are the instances that indicate your need for offshore software developers:

  • You need help to hire skilled employees from your region.
  • You need specialized talent for specific projects.
  • Your budget and resources are limited.
  • You want to reduce development time and hit tight deadlines.
  • You want to take advantage of different working hours in other countries.
  • You need access to a larger pool of developers with diverse skill sets.

What Are the Best Countries for Offshore Development?

The best countries for offshore software development depend on a variety of factors. These include the cost of labor, access to talent, infrastructure, and legal frameworks.

India, the Philippines, and Argentina are some of the most popular offshoring countries. Each of these countries has its benefits and disadvantages that you should consider.

For instance, India provides access to a large talent pool of experienced developers. Meanwhile, the Philippines is known for its high customer satisfaction rate. Ukraine and Poland are great options when it comes to cost savings.

How to Choose Your Offshore Development Company?

When looking for the right offshore development team, consider their experience and expertise. Make sure they have experience in your industry and have a record of successful projects.

It’s also essential to assess their commitment level and availability. Ask if they can provide support during times when you need them the most, such as holidays and weekends.

You should also check their communication skills, tools, and processes. Make sure they use the latest technologies to get the best results for your project. Lastly, review their pricing structure to know what you are getting from them.

Why is BIT Studios Your Best Choice for Offshore Software Development Services?

BIT Studios is an offshore software development company with three decades of experience. We have worked on hundreds of projects for top companies around the world.

Our team comprises experienced developers and designers specializing in various technologies. We use an agile process to ensure that our clients get their desired results efficiently.

Moreover, we have transparent pricing structures to give value for your money.

Originally published March 8, 2023, updated April 20, 2023

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