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In the digital era, the software development industry is expanding at a rapid pace. However, to stay competitive in the market and boost revenues, businesses continuously search for ways to enhance efficiency, lower costs, and deliver modern-age solutions.
As cost reduction is becoming a top priority among organizations, offshore development center (ODC) emerge as the optimal solution to streamline software development and expand into global markets within budget. Did you know that the offshore development market size is likely to reach USD 283 billion by 2031? Yes, you read it right!
Besides lowering costs, the offshore development approach can also enhance the quality of software development by offering you access to a global talent pool. However, a point to note here is that the ODCs do come with certain unique challenges. With the right strategies overcoming the offshore development center challenges becomes simple and easy.
Read on to explore everything in detail. Let’s dive in!
What is an Offshore Development Center?
An offshore development center refers to a dedicated facility set up by a company in a different country. These facilities are usually located in regions offering a favorable cost structure. The core aim is to bring down the software development cost while gaining access to global specialized skills.
These centers are basically the extensions of the parent company and can provide a wide range of services, from software development to IT support, and more. This approach is ideal for companies looking for specialized talent at low cost. However, it is also suitable for companies who want to delegate their business operations and focus on their core activities for better scalability.
When to Establish an Offshore Development Center?
Are you wondering whether setting up an offshore development center is an ideal option? Delve into the prominent situations when it proves to be the best approach!
- Your company lacks sufficient tech talent.
- You want to scale your business quickly.
- You have plans to expand into a foreign country.
- Your business wants to lower the cost of ownership of tech backup.
- You are looking for cost-effective operations.
Top 10+ Offshore Development Challenges and Ways to Solve Them
Now that you have a basic idea about Offshore Development Center, it is time to explore the prominent challenges of offshore development center. Read on to explore everything in detail!
Communication Challenges
It is no surprise that effective communication is crucial to ensure the optimum success of software development. However, it often remains one of the top offshore development center challenges.
When you choose the offshore development center model, you need to manage a remote team overseas. While it may seem to be easy, it isn’t especially due to communication issues. Lack of proper communication can lead to confusion and may give rise to hiccups in the software development project.
The communication challenges usually arise due to two reasons. First, it is due to a lack of language proficiency. In several countries, English isn’t the first or second language. As a result, communicating with the remote team becomes tough. It may take a longer time to debrief your project, leading to delayed outcomes.
The second reason is the lack of analytical and logical skills. In this situation, the remote team may be well-versed with the preferred language. However, they may have difficulty in understanding the brief owing to a lack of the necessary skill sets and knowledge.
Such scenarios can have a significant impact on the quality of the software developed. That is why addressing the communication challenges of offshore development center matters a lot.
Solution:
To overcome this challenge, you can leverage collaborative communication tools like Zoom, Slack, and more. Besides that, taking time to train your team and improve their English-speaking proficiency is an ideal option.
Moreover, companies can also set up a rigorous selection process to address communication challenges. Make sure that your selection process includes resume vetting, proper screening of candidates, shortlisting, analytical aptitude tests, and selection interviews in English.
Another approach to deal with the communication issue is to set up an offshore development center in English-proficient countries. It can facilitate effective communication and ensure superior quality delivery.
Time Zone Differences
When build a remote team, the time zones of the offshore and in-house teams are sure to differ. Owing to such differences, collaboration can be challenging. With limited interaction between the offshore and in-house teams, you can expect a direct impact on the overall output and performance of the project.
Solution:
Want to overcome the time zone difference challenge of offshore development center? In that case, opting for a time overlap window can be an ideal decision. With a time overlap window, you can prepare pre-defined meeting slots and opt for collaboration activities. As a result, ensuring seamless collaboration between the in-house and offshore teams becomes easy.
Establishing a flexible work environment can also be a smart move. In this approach, you allow your offshore and in-house team to extend their working hours or start early. The core aim is to facilitate collaboration among the teams, irrespective of the time zone differences. Moreover, creating rotating shifts can also ensure a work-life balance for the offshore teams.
Following an agile scrum is yet another way to deal with the time zone difference challenge. It can provide you with a clear idea about the progress of the ongoing projects. Also, you can easily gain insights into the potential challenges that need to be addressed.
Quality Control
Maintaining consistent quality and controlling the software development process is also one of the major offshore development center challenges. Such issues arise mainly due to a lack of a well-defined set of coding standards. Moreover, the difference in working approaches of the remote teams can also lead to this challenge.
Solution:
An effective way to address this challenge is to set up a thorough quality control process. Moreover, you must spend adequate time providing necessary training to your remote teams and conducting regular audits. It can enable you to determine any deviation early in the process and allow you to take corrective measures at the right time.
Establishing strict standards and performing quality assurance testing is also crucial. It can help maintain the optimal quality of the software and allow you to stay competitive in the market.
Cultural Barriers
One of the crucial remote work challenges, Cultural barriers refer to the differences in beliefs, behaviors, and values that can result in conflict or misunderstanding between team members from different cultures. For instance, some cultures may value long hours of work while others believe in a more work-life balanced approach. Besides that, when working with offshore teams, you are likely to come across differences in making eye contact, greeting each other, being punctual, and more.
Such differences can lead to friction among your offshore and in-house teams. As a result, it can affect their collaboration ability and have a significant impact on the quality of output. Therefore, addressing the cultural barriers early is crucial for the success of the projects.
Solution:
There are undoubtedly several ways to deal with the existing cultural barriers. One of the best ways is to provide diversity training. It will provide your in-house and offshore teams with an opportunity to learn about the key differences in culture. Moreover, they will also get an idea of how to interact with team members from different backgrounds. Such an effort can help avoid discord, miscommunication, or confusion among your teams.
Another effective way is to create an inclusive culture. It can ensure that your team members feel included and welcomed irrespective of their culture and background. To set up a culture of inclusion, you can promote initiatives like planning cultural celebrations and creating employee resource groups.
Providing opportunities for cross-cultural interaction is also an ideal approach. Try to create opportunities where your in-house and offshore teams from different cultures get to interact with each other. It can be done through activities like cultural exchange programs and social events.
Also Read : Prime Software Development Challenges And Solutions
Trust Issues
When you set up an offshore development center in another country, you may not be able to oversee the work of your offshore team closely. As a result, it might become difficult for you to rely on them. You might worry about the quality of work you will receive or whether they will be able to pull off the project within the deadline.
However, without trust, working on long-term development projects can be challenging. Therefore, it is essential to find out ways and address the problem at the earliest.
Solution:
To overcome this challenge, holding periodic evaluations is an ideal decision. It can provide you with a clear idea about the progress of the project and enable you to determine whether the teams are proceeding in the right direction or not. As a result, it can enable you to develop confidence in the teams and build trust over time. Moreover, establishing transparent communication can also help.
Management Challenges
One of the common challenges of offshore development center is related to management. Aligning project goals across remote teams can be indeed complex.
When it comes to offshore development center, you may come across partners who lack a customer-centric attitude. In other words, your Offshore Software Development partner may have a greater focus on the financial benefits rather than the delivery of quality solutions.
Moreover, you may even experience issues like the lack of appropriate processes, frameworks, systems, and escalation matrix. Non-availability of resource backup can also be a problem.
Solution:
To overcome management challenges, it is always wise to collaborate with an offshore partner whose business attitude and approach focuses on delighting the customers. Make sure to evaluate the type and quality of solutions they are ready to provide. Moreover, getting an idea about the level of assistance they offer is also crucial.
Besides the customer-centric attitude, it is also essential to evaluate their work processes, systems, escalation matrix, and frameworks. Ensure evaluating how speedily they are able to resolve the escalations relating to the output quality, hired team, and new skill set requirement.
Lack of Agility
When it comes to developing modern software applications, agile software development methodologies are the gold standard. However, when working with an offshore development partner, you may come across agility issues.
Without agility, your overall development process may become inflexible. As a result, it can slow down development and result in an increase in costs. Moreover, you might end up missing out the crucial opportunities. It is because agile methodologies allow quick adjustments on the basis of changing market conditions or requirements.
A lack of agility may also mean that problems aren’t addressed quickly. All these can significantly affect the trust and satisfaction level of the customers.
Solution:
An ideal way to resolve this problem is to modify your agile practices to easily accommodate the different work environments and time zones. Another approach is to conduct retrospective meetings regularly to evaluate and improve the processes.
Moreover, you can provide training to both your offshore and in-house teams on agile practices and principles. It will ensure that all your teams are on the same page and streamline operations effectively.
Data Security and IP Protection Risk
Data security and IP protection risks are among the most prominent offshore development center challenges. IP protection is all about safeguarding your sensitive information from inside leakages and threats. Sensitive information may include everything from operational and financial data to intellectual property and trade secrets that can significantly impact your business.
On the other hand, data security is all about protecting your valuable data against outside malware or threats. It is basically an intersection between availability, confidentiality, and integrity. Failure of these components can make your data vulnerable and result in unauthorized access, information breaches, deletion of critical data, and leakage.
Addressing these challenges can provide you with complete peace of mind. It will enable you to focus on your business activities rather than worrying about data protection.
Solution:
An effective way to address this challenge is to perform a thorough risk assessment and leverage corrective measures before the establishment of the offshore development center. Make sure to sign an NDA with your offshore software development partner. It is one of the best ways of ensuring data sanctity.
Building and incorporating enterprise-grade network security into the infrastructure of the ODC is also an ideal option. Moreover, make sure to conduct regular security audits for servers and infrastructures. It can help identify potential loopholes and enable you to fix them at the earliest.
Creating a local database of the ongoing software development project can also help. It can enable you to conveniently create backups at all times. Leveraging hardened systems for critical projects is yet another way of dealing with this challenge.
Infrastructure Challenges
Infrastructures like technologies, systems, internet connectivity, and power supply play a pivotal role in keeping the offshore development centers operations. Failure of any of the components can have a direct impact on the outcomes of the projects. It can result in significant delays and increase in costs. Moreover, it can even impact collaboration among the in-house and offshore teams and affect productivity.
Solution:
Mitigating infrastructural challenges may not be possible for businesses. However, you can definitely afford them through the selection of the right destination.
Make sure that your offshore development center has a power supply 24/7 and uninterrupted internet connectivity. The offshore development partner must have access to all the latest technologies and systems essential for the software development project.
Moreover, the location you choose must have proper connectivity and transportation within the city. Apart from that, evaluating the voice infrastructure is also crucial to ensure smooth international calls.
Also Read : Deep Dive into the Offshore Software Development Rates
Legal Challenges
Policies, politics, international relations, and laws do have an influence on businesses. Several factors like FDI regulations, export and import policies, labor laws, taxes, attrition, wage inflation, and legal landscape are likely to have a significant impact on the offshore development center. They can also affect the success of ODC.
Solution:
Before setting up an offshore development center, it is critical to conduct an in-depth analysis of the legal landscape of the foreign country. Make sure to gain insights into geopolitical issues, foreign business policies, and FDI regulation. Collecting all such information can help you avoid legal challenges and ensure optimal outcomes for software development projects.
Productivity and Performance Challenges
Many businesses experience disappointment in offshore development owing to a mismatch of reality vs. expectation. Often the output quality and the dedicated development team are below the average level.
One of the main reasons for such offshore development center challenges is hiring team members without properly evaluating whether they check all the boxes of the company’s requirements. You may come across performance issues in the work, resulting in poor quality and delayed deliveries.
Solution:
Wondering how to resolve these productivity and performance challenges of offshore development center? Transparent hiring is one of the best approaches. Make sure to partner with an offshore development company engaged in an end-to-end hiring process.
From screening resumes to shortlisting the candidates and selecting them, the offshore company must take your input in every step. Selecting such a partner will allow you to hire the right resources capable of delivering superior quality outcomes to meet your business requirements.
Another way to address these offshore development center challenges is to ensure seamless customer support. Besides transparent hiring, your offshore partner must be willing to provide support and assistance whenever required.
Regular feedback relating to the resources, output, and ongoing operations is also crucial. It can enable you to take corrective actions, fix issues on time, and avoid mismatches between the delivered solutions and expectations.
Conclusion
Businesses are leveraging the benefits of hiring offshore development team to streamline their whole development process. The core aim of choosing this approach is to minimize the cost of businesses, gain access to global talents, and enhance productivity and overall outcomes.
However, when leveraging the approach, you are likely to come across various offshore development center challenges. By now, you must be well aware of the most common challenges of offshore development center challenges. From management and data security issues to performance and infrastructure-related challenges, there is a lot to deal with.
With the right strategies, resolving the offshore development center challenges becomes easy. It is time to partner with the reputed and experienced professionals in the industry, set up your offshore development center, and reap the offshore development center benefits. Partner with seasoned experts, share your unique business needs, and avail of the best solutions to stand out in the competitive market.
