Do you know the average salary a software developer gets in the US is $76,800 per year while it is as low as $6700 in India? The difference is vast. Undoubtedly the concept of Offshore Development Centre is gaining popularity across the world.
It offers several other benefits such as:
Offshore Development Centre (ODC) is a profitable and convenient option. Therefore, software development companies in the USA are setting up ODCs to address their IT and custom software development needs.
Offshore Development Centre is an IT company located in another country. It provides software development solutions at much-reduced rates. With a team of high-skilled professionals, these companies deliver brilliant software solutions.
As a part of business strategy, several software development companies set up ODC as its subsidiary.
There is a subtle difference between outsourcing and offshoring, which is why most professionals confuse them with one another.
In outsourcing, the selected company provides software solutions as a third-party company. It aims to increase the company's productivity, reduce turn-around time and save costs.
On the other hand, offshore development centre utilizes cost difference between the two countries to reduce the company's expenditure. ODC is a subsidiary of the parent company, not a third-party service provider.
ODCs are generally set up in countries where wages are low but abundant talent is available.
For example, in the USA, a company has to pay around $77,000 to a software developer yearly, while it costs just $25,000 in Poland, $17,000 in Bulgaria, $14,000 in Colombia and $6700 in India.
By setting up an offshore development centre in a low-cost producer economy, the organization can bolster its position as a multinational company at a limited investment.
Also, it helps companies localize their products. For example, if a company wants to introduce a product in Bulgaria, then local employees can share valuable insights that can help the company give their products a local touch.
Establishing an ODC in a foreign country considerably increases the chances of success in a foreign and unexplored market.
Lack of trust & control and risks to intellectual property and data security are significant challenges of outsourcing a project to a third party. In Offshore Development Centre, the company can set up a team that works exclusively for the company's project.
It ensures the confidentiality of the project as the company can determine its terms and conditions. In case the strength of the team is greater than 50, the company can also establish a separate office.
The world has become a global village, and ODCs enable companies to make their most. They can hire the best from the talent pool regardless of the boundaries. In addition, cross-cultural knowledge transfer enhances the employees' skills and enriches the organization's work culture.
Establishing an ODC is always a good idea, and it offers multiple benefits. However, if the company wishes to garner optimum benefit, it must keep the below-mentioned points in mind.
Nourishing an ODC with the proper working environment, talents, and policies can turn it into a profitable subsidiary in no time. All it needs is initial attention and investment.