The current state of the world economy and the widening gap between possibilities and IT resources in western nations have compelled businesses to hunt for dependable offshore outsourcing solutions that are affordable, practical, and long-lasting for their IT requirements. Due to this, demand for offshore development centers has surged (ODCs).

Due to the advantages, it provides in terms of the talent pool, affordability, and simplicity of deployment, India is currently one of the preferred locations for outsourcing software development projects by businesses in the United States, the United Kingdom, Canada, Europe, and Australia. If you’re wondering how a company might establish a scalable ODC in India, read on. You should read this article. The step-by-step process of establishing a dedicated offshore development center in India will be covered in this blog.

Why set up an ODC for your Software Project?

In today’s dynamic and constantly evolving market, businesses must constantly upgrade their systems, processes, and technologies to stay ahead of the curve. But doing this by expanding the in-house team can become an expensive affair, especially if you are a company in the US, UK, or any other western nation. Hence businesses across the globe are opting to outsource their development project, and here are some stats to back it

• USA outsources approx 300,000 jobs every year
• 45% of companies plan to increase their outsourcing
• 24% of small businesses today outsource their operation to achieve efficiency
• 50% of Fortune 500 rely on trusted offshore outsourcing partners for their requirements

But why? Well, here are the reasons why one opts for ODC for software development

Economical

Studies show that 70% of businesses opt for outsourcing to reduce operational costs. Cost saving is the most prominent advantage of an ODC. Companies usually offshore their IT projects to developing countries where the cost of hiring skilled and experienced resources is much lower due to the low cost of living. Besides this, companies also save on expenses like hiring costs, infrastructure setup, and employee benefits, as all of these, are taken care of by the offshore development company/partner.

Access to Global Talent Pool

Offshoring IT projects gives businesses access to the global talent pool. Their team does not have to be limited to the local geography. They can now hire resources from anywhere in the world and scale operations.

Quick time to market

By deploying a dedicated offshore development team on the project, companies can fast-forward their project development and reduce time to market.

Business expansion

ODC is a great way for a business to expand in new internationally with minimal risks. By partnering with trusted offshore outsourcing companies like Your Team in India, companies can easily steer through the challenges of entering new geographies.

Owing to these benefits, enterprises across the globe today are looking to start their offshore operations. Offshoring your software development is an excellent way to gain a competitive edge in today’s volatile market. But, location is a critical factor in the success of your offshore development center.

When it comes to choosing a suitable country for India, it tops the chart. Read on to know why offshoring to India is beneficial for your business.

Recommended read:- Offshore Software Development: The Complete Guide (in 2023)

How to Set Up an Offshore Software Development Center in India in 11 simple steps?

Setting up an offshore development team in a foreign land can become a tedious task. Especially when you don’t know how or where to start? But you need not worry; this section of our article will cover the step-by-step process of setting up an ODC.

1. Define the vision & requirements of your business

The first step to setting up a dedicated offshore development center is understanding the IT infrastructure needs of your business and project and defining the purpose of the ODC. Following the below steps can help you create a better vision for your offshore team.

• Outline the scope of work –
• Define the project’s purpose- Building a new product, building new features in an existing product, or upgrading it to better technologies.
• What features do you wish to build?
• What technologies do you wish to integrate?
• What tech stack do you wish to use?
• Whether it is a simple development or complex development with changing requirements?

Asking these questions would help you understand the project’s scope and make informed decisions.

• Define the term of engagement
• Whether it will be a short or long-term engagement?
• One-time, recurring, or permanent technical support?

This will give you an answer to which offshore development center model- Product engineering, Build-to-Scale, or Build-Operate-Transfer model, would work best for your business.

• Define the talent requirements
• Detail out the different experts required for the project at various stages of development.

It will help you choose the right mode of engagement with the hired team- Fixed Cost, Hourly Cost, Retainer Model, or Hybrid model.

• Choose a development methodology that would work best for the project.

The above steps would help you build an efficient project strategy.

2. Choose a location

Today, India is a major IT offshoring destination. Though multiple cities in India have emerged as IT hubs in the past two decades, there is a vast disparity in the distribution of tech talent. A tier 2 city becomes a more viable option when your project requires simple development, basic coding language experts, and a small team.

Whereas for a complex project with large team requirements, tier 1 city is the right choice. Working with a reliable offshore development partner ensures that you find the right resources and IT infrastructure for your project at the best price. Read our blog on ‘Demystifying the Major Indian IT Destinations in 2022’ to make an informed decision. Factors that you must consider before choosing a location

1. Ease of resource availability across tech-stack
2. Per-hour rates of developers
3. Government FDI policies
4. Rules and regulations regarding data breaches and IP theft
5. Political and geographical stability
6. Available infrastructure in the location

This short checklist can help you save time and energy evaluating the offshore development company and making the right decisions. Want to know more about how to evaluate your offshore partner?

3. Service provider evaluation

The third and one of the most critical steps is finding a reliable offshore development company that can help you build a reliable and talented team of offshore software developers. A trusted partner would navigate the local environment and mitigate the challenges while working with a remote team. Here is a quick checklist for you to choose the right offshore Development company for your ODC

• Check for their industry experience, especially in your business domain
• Evaluate their development methodology
• Check if they are providing you dedicated offshore development center/team to work with
• Evaluate the size of the firm and their technology expertise
• Check for their international presence
• Do they offer resources with different amounts of experience?

This short checklist can help you save time and energy evaluating the offshore development company and making the right decisions. Want to know more about how to evaluate your offshore partner?

Following a three-step process of vetting the offshore development companies that involve:

1. Open and direct communication with the leadership team
2. Collecting information on work experience, client reference, and company’s social proof
3. Assessing the partners on their ability to have transparent and honest communication

This can help you make an informed decision about a partner.

4. Team Selection

Once you have zeroed down on your offshore development partner, your next step is to select your offshore software team. The right offshore service provider can help you select resources that meet your project needs, like technical expertise, years of experience, and soft skills. To build the offshore team for which, you need to define

• The team selection process-the end-to-end process to be followed before onboarding a resource in the offshore team. Setting up a transparent process that allows you to have complete visibility into the hiring operation of the offshore development center.
• HR Policies- Defining employment policies, engagement terms, and project payment.

5. Create legal documentation

The regulatory landscape of every country is different; thus, you must get legal advisors to frame the engagement agreements like

1. Business Agreements
2. Employment Agreements
3. Work Permits
4. NDAs
5. Data security and privacy policies
6. Coding standards

6. Infrastructure setup

Due diligence should be paid while setting up the infrastructure for an offshore development center. Closely evaluate the IT equipment placed in the ODC to ensure smooth operations and seamless communication with the offshore team. You need to define the infrastructure requirements in terms of

• Systems to be used
• Internet bandwidth
• Communication channels and technologies
• Server Backups
• Management policies
• Data security system
• Data access and exchange protocols
• KT process

7. Security management

Data security and IP protection face the biggest threat while working with remote teams. As the operations are spread across geographies, a minor lapse in information security can cause a major loss to a business. Thus, is it important to create a detailed Term of Engagement contract along with NDAs to be signed among the three parties:

• The Client
• The offshore development partner
• The hired software developers and other resources

To ensure the complete safety of data and IPs. Having a security measurement plan covering physical security layers and confidentiality and regular security audits can protect you from data theft and intelligence leaks.

8. Project management

This is the step where you have to define the Organizational Structure and apply it to your offshore development center. This step requires the creation of an extensive process framework that defines:

1. Scope of work and expected outcome from the resources
2. Hierarchy of workflow
3. Chain of command
4. Escalation matrix
5. Feedback mechanism
6. Knowledge transfer process

To enable seamless operations overseas.

9. Team training and mentoring

An offshore development team will have people from different regions and ethnicities, so you must carry out proper training sessions between your in-house and offshore teams to make communication smooth and seamless.

10. Define Milestones

To ensure the team works and delivers the project on time, you must define milestones with timelines for them to follow.

11. Communication management

One must build a strong foundation for communication in terms of technology and processes that enables a seamless flow of information between the in-house and offshore teams. Tools like Jira, Slack, Zoom, Google meeting, Trello, etc., can work wonders to ensure ongoing development visibility and efficient team collaborations.

Besides, daily scrum can help in keeping the project on track. Scrum meetings regularly update project progress, feedback, changes, and bottlenecks. This will help you monitor ongoing development without micromanaging the work. By following a suitable development methodology, creating an overlap work window, and bringing work flexibility, you can use this time difference to your advantage and fast-track your project development.

Setting up an offshore development is just the beginning. You must monitor and manage your offshore development team’s work to make it a success. Here are some tips for managing your remote offshore development team.

Read More at: Setup Offshore Development Center In India