Offshore software development: What you should know ??

Hello, and welcome back to Building Dev Teams for CTOs.

To end the year on a high note and set yourself up for success in 2025, this month, we’re diving into the must-knows of offshore software development. From what it really means (it’s not the same as outsourcing) to its benefits and the key factors for finding a reliable offshore partner, we cover them all in this guide.

Enjoy!

What you need to know right now:

• Stay ahead of industry trends by attending CES 2025! -? Held in Las Vegas on 7-10 January, CES 2025 offers valuable learning and networking opportunities for CTOs and other tech leaders.

• How to Explain Technical Concepts to Non-Technical Stakeholders - A step-by-step guide to explain technical concepts in a non-complex way… because not everyone speaks fluent "tech."

• Burnout: A chronic epidemic in the IT industry - 71% of IT professionals feel exhausted and overwhelmed at work. Are you truly addressing this issue in your team?

Monthly take: “The best engineers really have a lot of product understanding and aren’t afraid to ask questions to ensure that what they are doing makes sense.”

Aviv Ben-Yosef recently visited the Refactoring Podcast to talk about profitable engineering, measuring impact, and traits of successful teams.

During his conversation with host Luca Rossi, Aviv made a distinction between two types of engineers:

• Those who just care about the tech.
• Those who care about shipping impactful software.

Engineers in the first group simply ‘take orders’ without concern for the outcomes, while those in the second group care about creating software that truly helps users or solves real problems.

Aviv says that tech leaders should encourage their teams to care about the impact of their work and align it with a greater purpose.

In his words: “It’s ok to be a geek and love technology. I still do that, but I no longer geek out about something if I can see no way for it to improve the company, to do something faster or better.”

Offshore software development: What you should know ??

As you plan your dev strategy and budget for next year, understanding the right way to scale your team can make or break your success.

Not sure which approach to take? Our offshore software development guide has everything you need to make the right choice.

What is offshore software development?

Offshore software development involves hiring specialised engineering talent in talent locations like Bangalore, India, to build and maintain software. This model helps organisations scale quickly and cost-effectively without sacrificing quality.

Offshoring vs outsourcing vs nearshoring vs onshoring

While these terms sound similar, they each serve different purposes:

• Offshoring involves building long-term, high-quality teams abroad.
• Outsourcing refers to hiring temporary professionals for specific projects, such as adding a new feature to an app.?
• Nearshoring is the practice of setting up teams in neighbouring countries to minimise time zone differences.
• Onshoring means hiring locally to ensure direct oversight and real-time collaboration.

Benefits of offshore software development

• Access to niche talent. Organisations can tap into global expertise, including in emerging fields like AI and machine learning.
• Cost-effectiveness. Businesses can reduce costs significantly by hiring top talent in offshore locations, where life costs are much lower than in Western countries.
• Scalability. Tech leaders can easily expand their teams with flexible cooperation models that quickly add specialists.
• Focus on core activities. Offshore partners handle hiring and administration, letting business leaders focus on growing their businesses.

How are offshore developers different from outsourced ones?

Offshore developers are specialised professionals hired to extend a company's in-house tech team. Unlike outsourced developers — who work for different clients simultaneously — offshore specialists work exclusively for an organisation, using the same tools and processes and bringing niche skills and expertise that may be missing internally.

For example, a FinTech might hire offshore Quant developers to build risk models and contribute to the business's long-term growth and success.

Who should hire offshore developers?

• Non-technical businesses (e.g., retail, hospitality) that need tech expertise to enhance digital offerings.
• Growing tech teams that require niche talent to scale and take on larger projects.

Where to hire offshore developers

• Asia. India and the Philippines are popular offshore locations in Asia. Average rate: €28/h.
• Eastern Europe. Countries like Poland and Ukraine are home to highly skilled engineers. Average rate: €32/h.
• Latin America. Mexico, Colombia, and Argentina are growing tech hubs with young and dynamic engineering talent. Average rate: €37/h.

How to choose an offshore partner

1. Identify your needs: Define your goals and whether you need long-term team-building.
2. Assess communication: Ensure clear communication in English and other languages.
3. Verify developer quality: Ask about the talent pool and developer expertise.
4. Evaluate security: Ensure robust cybersecurity measures are in place.
5. Do a background check: Review their portfolio for experience working with international clients.

How to manage an offshore team

Managing an offshore software development team requires more than just task delegation. Focus on these key actions:

• Share your mission and vision. Align your offshore team with your company's goals to build trust and create a shared purpose.
• Bridge the culture gap. Encourage regular interactions, including visits and ice-breaker calls, to foster a sense of belonging. A Chief Happiness Officer (CHO) can enhance team unity.
• Communicate effectively. Use tools like email, Slack, and Jira to keep communication clear and consistent. Regular stand-ups and progress updates are essential for alignment.

Offshore software development trends

• AI and machine learning. Increasing demand for AI developers as machine learning models and LLMs gain traction.
• Cloud computing. The shift to the cloud will drive demand for cloud developers.
• Big Data. The rise of data analytics will boost demand for data scientists and engineers.
• Web 3 and blockchain. These technologies are growing, requiring more experts in decentralised solutions.

Why you should consider offshoring to India

• Top engineering talent. Over 5.8 million specialised developers in tech hubs.
• Strong communication skills. Indian developers possess high English proficiency and have extensive experience working in international teams.
• Cost-effective. Lower living costs and favourable exchange rates make India an affordable option.
• Established infrastructure. Cities like Bangalore, Hyderabad, and Chennai are tech hubs with modern IT infrastructure.

?? If you want to know more about offshoring and discover the unique (and proven) model that can help you scale with the top 1% of Indian talent, check out our offshore software development guide.

Key takeaways:

• CES 2025, one of the biggest tech trends and innovation events, will be held in Las Vegas on 7-10 January.
• As renowned tech leader Aviv Ben-Yosef states, the best engineers focus on shipping impactful software that solves real problems, not just the tech.
• Offshore software development allows companies to scale with top talent, reduce costs, and drive innovation.

That’s a wrap!

See you next month for more news and insights on tech teams and offshoring,

The Scalers’ Team