How to choose an offshore software development company

by Andy Nguyen
offshore software development company

An offshore software development company is the first thing that comes to mind for many people when they think about developing software. 

The reason?

Offshoring your software development tasks offers tons of benefits, like high-quality talent and lower rates

Now, you may have several questions — like where to find an offshore software development company, whether they all produce the same quality of output, and how you can distinguish a good offshoring partner from the rest.

Don’t worry. We’ll answer all these questions and more in this article. We’ll cover what offshore software development companies are, why you should consider offshore developers, and how to select a good one

Also, we’ll go over how you can use the right tools to manage your work with offshore development companies. 

This article contains:

(use the links below to jump to a specific section)

Let’s jump in.

What is an offshore software development company?

Offshore development companies carry out software development services in different countries or regions, usually areas with low living costs. 

Offshoring software development offers several benefits to companies, but it’s often confused with other business strategies like nearshoring and onshoring. 

Offshoring vs. nearshoring and onshoring

Offshoring is when processes are outsourced among businesses in different countries/regions with separate time zones. 

Nearshoring is when outsourcing happens among countries in the same region, usually within the same timezone. For example, nearshore outsourcing occurs when US-based companies outsource to companies in Mexico or Canada.

Onshoring (onshore outsourcing) occurs when a company outsources business functions to another firm in the same country. 

What services do offshore software development companies offer?

Offshore development companies offer several software development services, but you can categorize these into five types:

1. Development

Depending on the company you hire, they can offer offshore development service types like:

  • Cloud-based SaaS development.
  • Web application development.
  • Front-end development. 
  • Back-end development.
  • E-commerce development.
  • Enterprise application development.
  • Custom application development.
  • Mobile app development.
  • Blockchain and artificial intelligence (AI) projects.

2. Design

Offshore development companies specialize in user experience (UI/UX) designing to make apps look more intuitive, offer user-friendly interfaces, and enhance custom software development performance. 

3. System upgrades

If you want to upgrade a legacy system or initiate a complete digital transformation of your business, an offshore development company can carry out services like: 

  • Data migration: Move your data from the old system to the new one. 
  • Re-platforming: Upgrade old applications to move them to the cloud. 
  • Enterprise application integration: Unite databases and workflows to have a single source of data.
  • Process redefinition: Change system processes to make them more efficient. 

4. Quality assurance and testing

As software needs rigorous testing before release, offshore development companies hire Quality Assurance (QA) engineers and testers to carry out problem checks and create superior products for clients. 

5. Support and maintenance

All software requires constant maintenance to function correctly. Offshore development companies offer continued support and maintenance and implement upgrades to software based on client needs. 

4 key benefits of offshore software development 

Offshore software company benefits

Here’s why you need to think of hiring a development company based outside your country:

1. Access to top IT talent pools

It’s natural for you to want the best offshore developer teams to work on your software product, right?

The problem is: talent is one of the rarest resources in IT.

Since offshore software outsourcing partners hire top developers worldwide, offshoring software development gives you access to top-notch talent. 

With offshore outsourcing, you’ll get access to a team of knowledgeable, experienced, and specialized professionals equipped with the latest technology who’ll work on your software product. 

2. You can focus on your core business

When you hire an offshore software development company, forming a team to handle software development isn’t your concern anymore. 

You can use that time and resources to improve core business processes such as strategy, expansion, acquiring new clients, etc.

3. Faster launch times with the lowest risk

Offshore development companies specialize in quickly delivering high quality software. If you choose to offshore your app development, it’ll be much faster than using an in-house team. 

Moreover, since they have years of experience in software development, an offshore development company will have a lower risk of failure when compared to an in-house, dedicated team. 

4. Low-cost solutions

Did you know that 70% of businesses outsource to lower costs?

Cost-effectiveness is one of the main reasons for offshoring. 

The cost of living in many offshore countries is much lower than in western countries like Australia and the USA, letting you save on wages and administrative costs.   

Here’s an estimate of how much you’ll have to pay per person, per hour of a software development team around the world:

  • Asia & Africa: $18-$40. 
  • Eastern Europe: $25-$50.
  • Central & South America: $30-$50.
  • North America: $100-$170.

That’s why offshore software development is the ideal choice for building custom software solutions. 

How to select an offshore software development company  

Here’s how you can pick a company to offshore your software development project:

1. Define your business needs

Before you start looking for an outsourcing partner, prepare a document that outlines your project. 

Be sure to mention: 

  • Your goals.
  • Metrics you’ll use to measure performance.
  • Potential setbacks.
  • Anything else related to the project. 

You can then use your project outline to look for software engineering offshoring companies that can deliver everything you need within a suitable time frame. 

2. Pick a location

Picking a good location for outsourcing is critical to the success of your software development project. 

When deciding on an outsourcing location, you should consider key factors like:

  • Cost of living.
  • Ease of doing business.
  • Infrastructure.
  • Data security.
  • Availability of labor. 

Asian software development outsourcing hotspots include India and the Philippines due to the low cost of living and the growing software engineer population. 

However, if you’re looking at Eastern Europe, consider countries like Ukraine, Belarus, Poland, and Romania — some of the best offshoring locations with low development costs. 

3. Decide on a budget

Your budget will depend on the offshoring location. However, you can still find varying prices for different companies in the same region. 

For example, even though the average offshore software development rates in Asia are around $30 per person per hour, the best offshoring companies in Asia can easily charge twice that amount. 

Additionally, any offshore company could be cutting down on training, technology, and the quality of their work environment to achieve lower rates. This can ultimately affect their team and the firm’s output. 

Remember to keep your budget low enough to save money compared to local rates — but high enough to get the best quality and value for your money.

5 things to look for in an offshore software development company

Here are some things that can help you tell apart a great offshore software developer from the rest:

1. Efficient communication workflows

One of the first things to look for in an offshoring service provider is how fluent its employees are in the language of your choice

If you can’t communicate with them clearly, it doesn’t matter how good their work is — you’re bound to be disappointed with the result. 

Always check if the staff is fluent in English or whichever language you prefer. 

Additionally, observe how efficient their flow of communication is. Since the offshore development center will be in another timezone, they’ll be working similarly to a remote team. 

Ensure they have systems in place to communicate all updates regarding the development process quickly and transparently. 

2. Rigorous cybersecurity protocols

Cybersecurity is now a significant concern for any company looking to offshore their projects. 

Your offshore software development company should have tight security protocols and legal restraints like NDAs in place to keep all data and software safe. 

You can search for details of previous cyber attacks on your offshoring partner to get a good idea of how they’ll deal with your data in the case of a cyberattack. 

3. Best-in-class talent

One of the main goals of offshoring is to hire the best talent from around the world. 

An ideal offshore software development partner should have a workforce of the best software developers in their region. 

Additionally, your offshoring partner should also provide each developer with an excellent work environment  — giving employees continuous training, recognition, and incentives to stay happy and motivated. 

4. Strong portfolio

A good offshore software developer will have a strong portfolio of previous projects. 

Look for companies that have worked on projects in various industries. This way, you can rest assured that they have the experience necessary to develop and deliver your project with minimal risk. 

5. Wide variety of services

Developing software isn’t a one-time affair. 


In addition to regular maintenance, you’ll also require upgrades to your software sometime down the line. You might even need a completely different tool that integrates with your current software. 

It’s essential to choose an offshoring partner that offers a wide range of services. It’ll make things easier when the time comes to implement upgrades to your software. 

Feel like you want to do more research before picking an offshoring partner?

How to manage offshore software development teams

Once you’ve found an offshore software developer to partner with, here’s what you can do to manage them efficiently:

1. Define your expectations

When managing your offshoring partner, the first step is to let them know exactly what you need. 

Be sure to communicate everything you want them to know and paint a crystal clear picture of your vision. Ensure you’re satisfied with their plan before the project moves on to the development stage. 

If you’re not satisfied with the initial approach, try other ways to obtain a result that’s precisely what you want before finalizing the wireframe. 

2. Ensure regular communication

It’s always a good idea to stay updated on the progress of your project, right? 

Instead of waiting for your offshoring partner to bring you updates every week -—maintain regular contact with the chief software developer. It’ll help you stay updated on the progress of your software development project. 

You can use these updates to understand how well the software outsourcing project progresses and provide any clarifications the developers need from you. 

Moreover, you can provide feedback and direction to the development team through these regular sessions, so the final software product will look exactly the way you want. 

3. Plan for regular deliverables

Don’t wait to test the entire project at once. Talk with the partnering firm to organize deliverables at various stages of development. This way, you can ensure the project is on the right track and avoid any unpleasant surprises towards the end. 

You can talk to your project manager and detail which areas are high-priority and need to be completed first. 

Once you set an achievable timeline, you can expect them to provide the deliverables on schedule for testing and additional feedback. 

4. Don’t micromanage

Staying updated on the progress of your project is essential.

But telling the software developers how to do their job?

Not really. 

While you should provide your offshore software outsourcing partner with all details necessary to create your product — remember that you hired them because of their expertise. 

Give them the time they need to come up with a solution for your needs. Provide clarifications when they’re unsure how to proceed, but don’t try to micromanage their work. 

For example, don’t try to tell offshore software developers which tools to use during product development; they have the experience to know what best fits the situation. 

If you try to micromanage, it’ll only lead to inefficiencies and delays in launching your product. 

5. Use technology

It’s impractical to meet offshoring partners in person to discuss project details, right?

Thankfully, a countless number of apps can help you hold face-to-face conversations with your offshore software outsourcing company. 

You can use tools like Zoom or Microsoft Teams to connect with your IT outsourcing company easily. However, since they work for multiple clients simultaneously, it’s impractical to hold virtual meetings daily. 

Sure, you can use emails or even a Slack Workspace to receive updates on the project. 

But wouldn’t it be easier to use a productivity management tool? 

A productivity management tool can show you:

  • How many hours a day the offshore developers work on your project.
  • How productive they are during work.
  • What apps and sites they use while developing your custom software. 
  • Whether they are often distracted while working on the project.

Fortunately, Time Doctor could be just the productivity app you need. 

Time Doctor is a powerful and user-friendly productivity management tool used by SMBs and large companies to gain insights into employee productivity.  

With Time Doctor, you can:

  • Track the time developers spend on your project. 
  • Prevent the offshore team from idling during work. 
  • Access real-time reports to check the performance of your offshore partner. 
  • Use the Chrome extension to integrate easily with other project management and productivity tools. 

Check out other features and benefits of Time Doctor

If you want more information on offshore team management, read our guide on managing offshore teams

Wrapping up

While hiring a software development company can be great for your business, there are several factors you need to consider before diving into offshoring.
Use the tips we have mentioned in this article to understand how you can offshore software development without setbacks in the process. Once you have zeroed in on the right offshore software development company, you’ll be able to enjoy the many benefits of offshoring.

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