Setting up a Dedicated Offshore Software Development Center (ODC): What You Need to Know

Businesses are increasingly turning to offshore development centers (ODCs) in today’s global economy. An offshore software development center is a dedicated facility, either owned by the company or outsourced, that is set up offshore and operates as an extension of the parent organization. 

Offshore development centers (ODCs) enable businesses to access skilled talent, and benefit from cost savings and streamlined processes, resulting in faster time-to-market and higher-quality products.

The global business spending on the software market is expected to reach a massive proportion. Hence, setting up an offshore development center is a smart move for businesses looking to stay competitive. But setting up a robust offshore development center can be a bit challenging. To succeed, companies need to clearly understand what an ODC is, why it can be beneficial, and what steps they need to take to ensure success.

In this blog, we will explore what an offshore development center (ODC) is, how it can benefit businesses, and what steps companies should follow to set up an offshore development center in India successfully. 

Why should you set up an offshore development center (ODC)?

It’s more critical than ever for businesses to stay highly competitive in this fast-paced corporate market, and companies can accomplish this by establishing an offshore software development center (ODC). Apart from massive cost-savings and access to top-notch talent in various technology domains, here are some main reasons organizations should consider establishing an offshore development center.

• Better work-life balance for team members: Because ODCs operate in a separate time zone, team members can work outside of regular business hours, resulting in a better work-life balance.

   

• Access to new markets: ODCs may assist firms in getting access to new markets and cultures, allowing them to grow their operations internationally.

   

• Risk mitigation: Because ODCs are spread in diverse locations, they are less subject to natural catastrophes, political instability, and other dangers.

   

• Enhanced innovation: ODCs may give people access to new ideas, viewpoints, and technology, which encourages creativity and innovation.
  
• Increased corporate social responsibility: Offshore development center companies can enable firms to sponsor social activities in offshore locales, increasing corporate social responsibility.

• Reduced administrative burden: Because offshore teams may handle responsibilities such as payroll, ODCs can minimize administrative obligations on the parent business.

Now that you better understand why you should set up an ODC, it’s time to learn the steps you need to follow to set up an ODC.

Steps to setting up an ODC

Establishing an ODC necessitates careful planning and execution. Businesses should take a systematic approach to ensure that the activities of the ODC correspond with their business strategy. The following are some critical steps in establishing an ODC:

1. Defining objectives and requirements
2. Identifying the right partner
3. Establishing clear communication channels
4. Recruiting and training talent
5. Setting up infrastructure and technology
6. Ensuring compliance with legal and regulatory requirements
7. Developing a governance and management framework
8. Continuously monitoring and evaluating performance

Best practices for running an ODC

Putting up an offshore software development center (ODC) is hard, but running one may be just as difficult. But, by applying best practices, organizations may successfully manage their ODC and reap the benefits of a distributed workforce.

1. Developing a solid governance and management framework
2. Ensuring effective communication and collaboration between the ODC and the parent company
3. Prioritizing team building and cultural integration
4. Promoting a collaborative and productive work culture
5. Implementing robust information security measures
6. Monitoring and measuring performance against established metrics
7. Investing in employee training and development

Common challenges with ODCs and how to overcome them

Offshore software development centers can provide various advantages, but they also present distinct problems that businesses must be prepared to face. Among the most prevalent difficulties are:

1. Communication and cultural differences
2. Time zone differences
3. Managing remote teams
4. Quality control and performance monitoring
5. Security and intellectual property concerns
6. Legal and regulatory compliance

To overcome these challenges, companies should adopt some best practices, such as:

1. Ensuring clear and effective communication between the ODC and the parent company
2. Developing a strong governance and management framework
3. Prioritizing team building and cultural integration
4. Establishing effective collaboration tools and processes
5. Implementing robust information security measures
6. Conducting regular quality checks and performance evaluations
7. Ensuring compliance with legal and regulatory requirements

Companies can overcome the barriers of setting up and operating ODCs and realizing the benefits of offshore software development by proactively addressing these problems and implementing best practices.

Setting up an offshore software development center provides considerable benefits to organizations, such as cost savings, enhanced flexibility, and access to experienced people. 

Businesses can effectively set up and operate ODCs by following the best practices, prioritizing staff engagement and retention, and tackling less typically highlighted difficulties such as cultural and language hurdles.

As a result, many firms rely on professional partners like Carvewing to guide them through the process. Carvewing can assist firms in setting up an offshore software development center in India and achieving their goals by giving advice on everything from hiring and retaining top personnel to managing legal and regulatory compliance. 

Call us today to learn more about how we can assist your company to set-up a world-class offshore development center (ODC) in India.