The demand for software development is increasing, and Offshore Software Development Centers (ODCs) have popped up in recent years to help startups and enterprises work with talented people worldwide. Also, the market size of IT outsourcing is expected to reach $938 billion by 2027.

The fundamental reasons for this are lower costs and access to a larger, more talented labor pool. You can also improve collaboration and optimize the management of your software development projects by setting up an ODC.

However, setting up and managing an offshore development center (ODC) can be daunting. When setting up an offshore development center, you must stick to some basic principles.

In this blog, we will explain some essential elements of setting up an offshore development center. You can create a productive and efficient development center that meets your business needs by going through these principles.

Here we go!

What is Offshore Development Center?

The offshore development center provides a complete solution for your software development needs. The offshore software development is the best of its class, where you get your requirements implemented without being dependent on any third party.

The ODC delivers the quality solution required to meet your business objectives. It is a novel and efficient business model that large IT product companies and startups can utilize.

Moreover, they are an excellent way for companies to reduce costs and establish their presence in countries with large skilled labor pools. You can also contact any offshore outsourcing software development company to avail the benefits.

Also Read: Offshore Outsourcing India- A Lot More Than Cost-Effective Advantage

The Basic Principles To Set Up Dedicated Offshore Development Center

• Choose a location

When choosing a location for offshoring, it is essential to consider all aspects of the culture & language preferences and the technical skills required.

Also, make sure that the vendor has expertise in helping you find what’s best suited to your project requirements.

You can pick Latin America, Eastern Europe, and Asia to set up your ODC. Poland and Ukraine are big players in Easter Europe, and India is the giant in Asia. However, if you choose an offshore software development company in India, you will get exclusive benefits.

• Find a trusted partner

Not all business partners are equal when setting up an offshore development center. So try to find a good offshore software outsourcing company that can fulfill your project requirement.

You can go through the following variables when choosing a trusted offshore software development services company.

• Technical Expertise

When choosing an offshore development firm, look at their portfolio and testimonials to see if they are the right person for your project.

Consider checking if they have industry expertise in addition to English fluency because this will help you ensure that you can meet all deadlines with success.

• Cost flexibility

Try to make sure you pay only for the services you hire from the offshore development center. Ask the vendor to give you the details like an invoice with transparent costing and a description of professionals and the work done.

• Project Transparency

You must ask vendors to ensure transparency while working on your project. You can do so by asking for updates from time to time and by following proper communications and protocols.

• Begin recruitment

After partnering up with a service provider, lay the first stone of your recruitment process. At this point, researchers will start analyzing current labor markets and select eligible candidates to interview.

• Find an office

While recruiters are busy interviewing the candidates, your next step should be to find an office workspace. Decide for security system, office planning, seats, equipment, parking area, etc.

You can also take the assistance of real estate managers who would be guiding you to find a suitable workspace for your future IT professionals.

• Get legal support

You can’t just go into a lease contract signing without hiring an experienced lawyer. So also, make sure you hire an experienced lawyer.

The lawyers will ensure that you are getting the best terms of the agreement. However, it takes a good understanding of the national law and profound negotiating skills.

• Make procurements

To equip the new office, you need to procure furniture and proper IT infrastructure. So make sure it includes computers, software, security system, servers, etc.

• Organize HR payroll

You need a person to organize HR payroll and accounting for your new offshore development center. This will support the functioning of operations while also making sure that you are aware of every step, including money transfers between ODC and head office.

Also Read: A Detailed Cost Comparison – Offshore VS Onshore Teams

Mistakes in Setting Up Offshore Development Center

• Don’t Involve many recruitment agencies

When you decide to open an office abroad, most businesses feel it is good to involve at least two or three recruitment agencies in the local market. This way they can get more information and make their decision easier.

Unfortunately, this “excellent” plan seldom works and causes problems. A candidate can get interview calls from all recruitment agencies and be perplexed.

So, one ultimate solution is to keep it local by dealing directly with one recruitment agency who knows your company and the candidates inside out.

• Don’t Ignore employer branding

Employer branding can be a powerful tool in the recruitment process. If you want to accelerate your search, start with an employer brand campaign that focuses on how great working at this company would feel.

• Unadaptable company policies

For many companies, their corporate HR policies work well with in-house teams but not necessarily those located offshore.

For this reason, you should be adaptable and discuss the vacation & day off opportunities individually for each individual.

• No IP rights agreement

Hiring developers means you trust them with your intellectual property, but it’s essential to ensure they won’t leak any information.

So never forget to consult an IT lawyer before signing anything and protect yourself if something goes wrong.

Also Read: Importance of dedicated resource for Android application development

Benefits of An Offshore Development Center

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• Cost-Effective

Offshore development centers can be very cost-effective, as they often allow companies to outsource work at a lower price than they would be able to in their home country.

Additionally, companies can often save on office space and other related costs by having an offshore development center.

• Access to Expertise

Companies can hire developers who are very experienced at the tasks they are working on. This can allow faster work because of previous experience with similar projects and better results.

Moreover, it allows companies to access development expertise that might not exist in their home country.

• Access to Talent

Hiring employees in an offshore development center allows companies looking for talented developers access to much larger pools of potential employees.

This can allow them to find the best person for the job, rather than just taking whoever they can find locally.

Further, it ensures that they always have access to talented developers, even if the talent pool in their home country is limited or non-existent.

• 24/7 Operations

Because their employees are located in offshore development centers, companies can ensure round-the-clock operations. This can help them get more work done and make it easier for them to access customer support.

Moreover, having a 24/7 operation can make a company appear more reliable and professional overall.

• Reliable Operations and Delivery

An offshore development center can allow companies to access reliable operations and guarantee that they will get the work done on time. This is because employees in offshore development centers are often more experienced, which means that they don’t require as much supervision.

Additionally, having a long-term relationship with their offshore development center allows companies to build trust and ensure that everything will go smoothly.

• Better Focus on Vision and Strategy

An offshore development center can be an excellent way for companies to focus on their vision and strategy. By outsourcing work to an offshore development center, companies can free up their employees to work on more crucial tasks.

This can ensure that employees are constantly working on high-priority tasks and don’t waste their time doing low-priority, lesser important work.

• Increased Control

An offshore development center allows companies to have increased control over the work. Because, in most cases, they need to approve or supervise everything done in the development center. Managers can also access metrics and monitor work in real-time, which can help to ensure that everything is going smoothly.

Bottom Line

Outsourcing work to an offshore development center can be a great way for companies to save on costs, access expertise they might not have in-house, and focus on their vision and strategy.

Though having an offshore development center has many advantages like the above, it’s essential to be aware of the risks involved to ensure everything goes smoothly.

This includes having a solid IP rights agreement in place and ensuring that the developers you hire are trustworthy.

By considering the points above, you can ensure that your company reaps all the benefits of working with an offshore development center.

If you’re looking for help setting up an offshore development center, our team at ValueCoders is here to assist you. Our experts can help you set up the ODC and understand everything your company needs to set up an effective offshore development center.

Also Read: Why Offshore Outsourcing Still Remains The Best Bet for American and European Firms

Frequently Asked Questions

Q 1 What kind of projects are most suitable for offshore development, big or small?

There is no concrete answer to this question as it depends on each project’s specific needs and requirements.

However, small projects are generally better suited for offshore development than large projects.

The reason is that small projects are less expensive and less time-consuming to develop and manage, so they are more feasible for a remote team of developers.

Additionally, since the offshore team will coordinate with your in-house team, smaller projects will be easier to manage and monitor.

Larger projects can be more challenging to manage remotely, as there is often a greater need for communication and coordination between the client and the development team.

Additionally, large projects can be more costly and time-consuming to develop, making them less feasible for an offshore development team.

Q 2 Why is the popularity of offshore software development growing so fast?

The popularity of offshore software development is growing fast because it offers several advantages for companies, including:

• Lower costs

Offshore software development is often cheaper than hiring developers in-house or working with a traditional software development vendor.

• Faster time to market

Business can get their products to market faster by outsourcing the development process.

• Greater scalability

Companies can ramp up or down their offshore development resources as needed, making it easier to scale up or down their software development efforts.

• Improved quality

By working with a team of developers who are experts in the specific technology used for your project, you can improve the quality and accuracy of your software.

Q 3 What is the difference between building an ODC and outsourcing?

The significant difference between building an ODC and outsourcing is that with an ODC, you own and control your data. Moreover, outsourcing services give up control to a third party.

With an ODC, you are responsible for designing, building, and maintaining the infrastructure. With outsourcing, the third party will design, build, and maintain the infrastructure for you.

Also, you are responsible for managing and securing your data with an ODC. With outsourcing, the third party controls and secures your data on your behalf.

An ODC provides more autonomy and flexibility than outsourcing. An ODC can be tailored to meet your specific needs, whereas an outsourced system is likely to be one-size-fit.

The post Setting up a Dedicated Offshore Development Center: The Basic Principles appeared first on ValueCoders | Unlocking the Power of Technology: Discover the Latest Insights and Trends.

According to Mckinsey Global Institute data, only 1 out of 7 ideas result in a successful product, and the failure rates for newly launched products are between 25%-45%. Using a structured approach, you’ll stand a greater chance of avoiding any pitfalls resulting in your new product’s failure.

As said by late Apple founder Steve Jobs: “People are crazy enough to think they can change the world are the ones who do.”

But that does not guarantee that the new product will sell like hotcakes. You need to invest time with good command of customer & market needs, your competitors, and offering products with clear value to beat the odds.

This is where there 7 Stages Of Product Development Helps :

Source: Google

Involving customers at the early stage helps NPD process and understand their problem before executing ideas into process, tools, and technology. 

Necessity leads to invention. That’s where the New Product development Process(NDP) will help. A very simplified process to convert ideas into a tested concept into viable products and eliminate non-feasible ideas.

That’s where the new product development process (NDP) comes into play. This process is designed to aid the conversion of new and untested concepts into viable products and market them while allowing you to weed out non-feasible ideas.

What Is new product development?

New product development is all about converting an idea into a business-strategic workable software development product.

The New Product Development (NPD) process involves researching existing products in the market with a customer-centric approach, feasibility of the idea, delivering working software and latching on the market opportunities, and delivering working software.

Product development is an umbrella term that covers six stages of SDLC and working and has a POC. The New Product Development approach revolves around an entirely new idea, where the uncertainty around its development and the next option remains high. Software product development companies are progressively exploring NPD facets to address development glitches.

Since it is about releasing the latest software product, you should seek services from leading software product development services; then, always a fair idea to join hands with leading firms.

Stage 1: Idea Generation

Emphasize On Customer Problems: A good entrepreneur can scan the issues faced by the target audiences.  You can always identify the issues’ customer is facing.

a) Personal Roadblocks

Whether you’re an entrepreneur or a buyer, the customer’s tendency always remains the same. All you need to do is prioritize one problem, derive a solution, and tag them” one for all. If you’re looking to set the tone right before product development, subscribing to product design and development companies could help. 

You need to apply your brain behind digital offerings. The communication gap often leads to many problems—– and is the biggest hurdle towards the path to productivity.

Building a product and launching it can have some ups and downs, but there should focus on making up a great business idea.

b) Qualify Each Of The Listed Problems

Here is the 4 U strategy:

Let’s discuss each of these aspects in detail.

Unworkable: Figure out whether the brainstormed product concepts will address some real problems. Will the product be able to fill the existing customer experience gaps and will achieve product-market fit?

Unavoidable: Is the problem that you are working on inevitable to the extent that it becomes mandatory to comply? You need to find out whether solving that problem is a choice or a compulsion.

Urgent: Is the problem urgent and is highly demandable by the target market? If the answer is affirmative, this could be your chance to cover the white space in the market with your original product.

Underserved: Are there no available products that address the existing user problems? Look for the whitespace in the market and hold on to the idea that looks promising.

c) Emerging With Possible Solutions 

Once the problem gets figured out, you can start looking for possible solutions with a product development firm to produce feasible solutions. For every new user problem, there’ll be a new NPD service.

If you have figured out the problem, it’s time to look for possible solutions. For every user problem, there ought to be potential new product development opportunities.

Here’s the workflow that starts from a problem and ends up with strategizing around the solution.

d) Narrowing Down The Problems

Categorize all shortlisted problems using a comparison chart with solutions. Circulate the findings across the organizational structure to come up with a viable problem set.

In case stakeholders are reserved, you can Replicate, Re-purpose, and with an upgrade approach.

Replicate:  You can create a similar product w.r.t. a competitor and launch it in the new market conditions. Once MVP(Minimum Viable Product) is launched, then you should prioritize out-of-the-box features.

Re-Purpose:  You can rewire the existing business model and present it in the most viable manner.

It focuses on rewiring an existing business model—for instance, LinkedIn Learning & e-learning platform.

Upgrading: This concept of NPD revolves around the existing model with some improvements. Be it performance, speed, or addressing challenges of competitors with added functionalities. 

Also Read: Top 20 Fantastic Software Ideas in 2021 to Nurture Start-Up Dreams

Stage 2: Idea Screening      

The new product development stage is about choosing the idea that gives you the highest potential for success. You can put all your ideas collectively for internal review, i.e., seek the advice of people with industry knowledge and experience.

When developing a new product idea, leverage the advantage of POC (Proof of Concept) to check the feasibility of the concept. One can’t zero on an idea that is not technically feasible to build.

You can consult the Agile development team—–expertise helps understand the technical side of things and help shortlist ideas worth building a PoC. In India, software product development services leading-age technology solutions give the prospects a smooth development experience

SWOT (Strengths, Weakness, Opportunities & Threats) is prevalent and good practice while shortlisting New Product development ideas.

Agile development team, product owner, the scrum master, and the product manager go through a detailed analysis and shortlist ideas——— opportunities and strengths, threats picture and weaknesses.

Conducting a SWOT is relatively simple, and you need a simple 2×2 grid to get started:

SWOT Analysis Template | New Product Development

In all, your New Product Development idea should be unique so that you do not have to convince people to pay for it.

Image Source: Google

Stage 3: Concept Development & Testing

Evaluation of value proposition is the first step towards testing and development. It ensures you assess the problem in advance and can course-correct earlier. It saves from piling new technical debts.

These steps easy-to-follow steps include :

1. Quantifying gain/pain Ratio
2. Conducting a competitor analysis 
3. Enlisting major product features
4. Creating a value proposition chart
   

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Stage 4: Value Proposition Strategy 

A great asset of product development companies in India before they launch any product. You should be very particular about the capabilities of new products. Once you are good to go with the idea’s utility, you can pitch it clearly to the end-user. It ensures that a product or service positions around customer exact values and needs.  

In the form of a value proposition, you can showcase what your product is capable of doing.

Stage 5:Concept Testing

Once you are ready with the proposition in software product development, you can now present it to the set of selected customers. The key is to have trust and belief in your ideas. Since the concept doesn’t look promising, you’ll repeat steps to develop a new project.

You can get meaningful insight by focusing on four critical aspects:

• Identification of the focus group, i.e., people who would benefit from the new product under development
• Assessment of other alternatives to be offered to the focus group
•  Devising a foolproof plan for the New Product Development right from features, marketing, pricing, and distribution
• Integration of unique product features into the customer’s mind for findability and discoverability.

Image Source: Google

Stage 6: Product Development

When product development software companies start, execution of ideas occurs, the business strategy is documented —- you can go ahead with the product development cycle. 

The New Product Development starts with developing the prototype followed by MVP.

1. Prototype

Creation of UI/UX of the product and share with the stakeholders helps visualize the product’s feasibility in the marketplace.

2. Minimum Viable Product (MVP)

Using Agile for the new products gives a different look.  Once the product goes through the design & steps — the product gets launched with minimal features.

Agile Product development is better than conventional. The waterfall model complements the to-and-fro movement across the development cycle and ideal for last-time changes.

Maintaining Communication & Synchronization are the key highlights of Agile Model

Stage 7: Market Testing

Steps in New Product Development aims to reduce the uncertainty revolving around the software product development, i.e., checking the viability of the new product or its marketing campaign.

There are two market testing strategies to follow:

1. Alpha Testing

This type of testing allows testing engineers to judge any product based on performance and map the marketing mix.

In case of any issues, the changes are planned and implemented before the final go-ahead.

2. Beta Testing

The selected group of customers gives unbiased feedback to the organization. It is all about listening to customers’ voices when issuing a move back to the development team for fixtures.

Here’s how Alpha and Beta testing are different from each other:

The third form of testing conveyed product validation and is called In-Home Usage Test (IIHUT). Development products are meant for intended customers who will use the products.

Last Stage: Market Entry/ Commercialization

Image Source: Google

If you go step by step as shown, nothing can stop your product from being a market-centric fit and set the stage to become a leading product development firm amidst software development services.

Here are some must-do marketing activities that will help gain traction:

•   Marketing The Concept Over The Product

•   Having A Brand Voice

•   Market-friendly Webinars 

Here are some of the main advantages you’ll gain from using the new product development process.

Create an innovative culture –  a new product bring newness in ideas too. Creating a culture of innovation reaps the rewards and help business greatly.

Keep pace with your consumers – consumers can have changing demands because of no. of factors. New product development ensures you keep pace with consumers and ensure product relevance. 

Discover new opportunities – by focusing on your customer’s needs and not your shareholders, you’re able to uncover new opportunities and further your business’s growth and development.

Drive higher value proposition –designing products meeting consumers needs 

Improve your brand reputation – consumers are often inclined to companies and test their latest products which keep innovating.

Enjoy faster time to market – a streamlined process identifies and creates plans for any loophole in the product development cycle.

Avoid feature creep – allows better management and response to requests for intriguing features.

Avoid common pitfalls – Weed out the snares which lead to failure by identifying them first.

1. Failure to meet your customers’ requirements
2. Too high quotation
3. Misaligned advertising
4. High development and resource costs
5. Stiff Competition
6. Misinterpretation of the market size

Also Read: How Digital Transformation Is A Decisive Factor For Business Turnaround

Conclusion: 

As mentioned, an Idea is the best seed for business. Since the whole theory lies in software product development and converting new ideas into workable products, it gives you a competitive advantage and monopolizes the market. 

New Product development is a step-by-step process that includes New Product development—— idea generation and screening, concept development and testing, market strategy/business analysis, product development, market entry/ commercialization.

Many product development software companies follow the thumb rule to innovate new ideas while delivering values simultaneously to attract business. A software product development firm like ValueCoders thrives your business in the software development trade since it is a 16+ offshore development firm.

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