Offshore Software Development: The Complete Guide for 2024

Updated 20 Jun 2023

16 Min




There are piles of things you should remember when creating a product from scratch: deadlines, staff management, tech peculiarities of the project, etc. Everything will be easier if you use offshore outsourcing software development. There’s no need for a significant emphasis on running the project and doing other things when you outsource a portion of duties to specialists. Offshore software development statistics shows that such approach is quite popular these days. The stats by Report Linker prove it: the worldwide IT outsourcing market is expected to obtain $425.19 billion in revenue from 2021 to 2026. In turn, Statista indicates that the IT consulting and implementation services market worldwide will reach $82.44 billion in 2027.

This article will show you whether offshore software development is suitable for your company. You’ll also know more about offshore development advantages. Then we’ll tell you how to avoid common pitfalls while selecting and working with an offshore software provider and more necessities.

What is Offshore Software Development: Essence and Types

Offshore development means transferring a project (fully or partially) from a client to a third-party software development vendor. But keep in mind: intending to outsource the entire building workflow, you should better cooperate with a software development vendor, not a freelancer. Here’s the thing: a freelancer may be an expert in one related field or some more (e.g., mobile or web development, etc.). While to create, let's say a mobile app, you need at least one skilled designer, QA engineer, and software developer. Offshoring is a great way to find such an IT vendor for cooperation. We’ll tell you more about it right now.

At its core, offshore software development is a type of outsourcing that involves working with an IT vendor that will be headquartered at a distance from your region: in Central Europe or Asia, for example. These are the most popular outsourcing locations, offering flexibility, competitive pricing, and labor. Offshoring allows you to remove the responsibility for creating software and managing the development team. At the same time, you aren’t limited to hiring specialists in your city or country, and access to vast talent and technology worldwide.

The US-based scientific and commercial company that provides an IoT-based telecare solution engaged a Cleveroad team to develop an IoT-based system that allows users to track their hydration level from mobile devices. Our team has successfully delivered a holistic system integrated with an IoT sensor and suitable for calculating the hydration level for any need.

However, you have to consider the following peculiarities when offshoring a project. Because of the geographical distance between you and your offshore IT partner, a significant time zone difference can affect your development workflow. You may also encounter significant cultural and language barriers. Nevertheless, all these problems are easily solved. You just need to be careful in choosing a technical partner and pay attention to their customers’ reviews.

What Services Can Be Outsourced?

Outsourcing gives companies a range of indisputable benefits, including pricing flexibility, large talent pool, scalability, and so on. There is a vast of tech-related services that can be outsourced: mobile development services, web development, UI/UX design etc. Let’s dig deeper.

  • Mobile app development. Offshore mobile development is quite popular since you don’t need to hire an in-house team, pay fees and sick days, hardware and software, or office rent. Offshore software developers will build a cutting-edge solution for you without extra expenses for equipment and working space.

  • Web development services outsourcing provides your business with a leg up over the competition with a flawlessly operating web product. This product will boost your company's online presence, as offshore software programmers will do their best for flexible and modern website development in the shortest time.

  • UI/UX design. Keep in mind that you obtain a range of preferences outsourcing this service. Skilled designers will make all the complex things amazingly simple. As a result of cooperation, you’ll obtain an intuitive app interface or site that is easy to navigate. Moreover, you’ll be able to focus on other essential business issues entrusting your design creation to the offshore programming vendor's safe hands.

  • QA services. Developing software solutions needs thorough testing of every app part to ensure it works without bugs. Even the best offshore software programmer can make mistakes, but they'll soon be tired, being obliged to write test cases and check each product detail. In this case, outsourcing is an excellent approach to maintain your solutions at their best without exhausting your devs.

You can also outsource software product maintenance, customer support, data storage, or security. Outsourcing became the optimal solution to all business problems, even at the time of the world pandemic restrictions: you can remotely collaborate with an offshore programming team from around the world.

Read our case study: The application for effective networking allowing to easily remember all the new acquaintances

When to Apply to an Offshore Development Vendor?

In order to stay competitive in a fluid market, companies have to implement the latest IT technologies in their workflows and products. But, if you’ve got no experience in the tech sphere, an offshore software development outsourcing company can help you. What are other situations when you’re able to outsource product creation?

When you’re on a budget

Engaging in-house software developers is high-priced for SMBs or startups with limited funds. Recruiting skilled staff usually costs a lot of money; thus, the financial problem is critical when deciding whether to outsource software creation or not. The offshore development process is an economically rational option that allows you to work on your project with experienced software developers while remaining within your budget.

When your business requires flexibility

Working with offshore IT staff, you have a right to wait to fulfill contractual obligations that the agreement of both parties can change. Compared to recruiting a full-time software development engineer for a short-term project, this makes much more sense. When working with an offshore development software team, your responsibility to them terminates after the project is over.

When you need to improve the quality of your services

The fundamental values of a business should be quality and innovation. They provide customers with good value for their money, put the company ahead of the competition, and help it win the market. If you see that the quality of your goods and services is decreasing, now is the greatest time to explore hiring an offshore developer.

We named only the most common reasons to use offshore software engineering, but there are more than three ones. You may add something to this list when you start working with an offshore outsourcing team and see how convenient it is. Now we’ll keep discussing offshore software outsourcing advantages and challenges.

Offshore Software Development Benefits

First, let's consider the main benefits for you as a customer in case you decided to use offshore development services.

Reasonable development costs

Most offshore outsourcing software development companies provide their customers with flexible prices and first-grade services. Central Europe, for example, gains its popularity concerning a bunch of talented individuals, state backing, and low taxation for the IT sector. It also displays the ideal value for money balance of the software provided.

Average hourly wages for software development offshore services (according to Clutch & GoodFirms)

Outsourcing regionsHourly wages for work

Central Europe


Western Europe


North America


South America




The development costs (as well as software development time) may also be influenced by staff size, technology stack used, experience, anmay also be influenced by staff size, technology stack used, experience, and duration of the collaboration. Furthermore, many offshore software development service providers strive to give their clients the best possible circumstances, offering them additional pleasantries (like some free services).

Take a look at outsourcing in Europe hourly rates

Quicker concept implementation and delivery

The total time spent on recruitment can be reduced by cooperation with an offshore software development outsourcing company. You can always speed up the project completion by collaborating with as many experts as you need. But keep in mind: just doubling the team will not necessarily cut the project completion time down. Such a relationship would be valid only if jobs are properly partitioned between staff members and they contact each other well.

In this case, the time to market and costs would be reduced, and you'll be able to outperform your domain competitors.

Qualified talents

IT outsourcing makes available cooperation with a variety of technical experts competent in needed business domains. For example, there are over 9K of annual tech graduates in Estonia, and this number is growing. Such a wide talent pool is one of the reasons why companies from all over the world open their headquarters and R&D centers in this region.

The internal recruitment may be completed in some days rather than months. Outsourcing allows you to hire as many people as you want. So, you may select the best offshore developer (or a whole team) by considering different specialists from all around the world with various talents and expertise.

Need experts in development?

Cleveroad is ready to provide you with a team of specialists with the expertise in your domain

High scalability

Development is a tricky business, and you never know how many developers you'll need at any time of the project. The offshore software development model allows you to scale up and down easily: expand your team if you need to speed up product development or reduce the number of specialists if you don't have any jobs for them to do. This way, you'll avoid overpaying and time-consuming employee searches.

Offshore software development outsourcing enables a variety of cooperation models, ranging from dedicated teams to staff augmentation, in order to provide organizations with the most efficient and fitting solutions appropriate for different issues.

Low building risks

Working with outsourcing professionals allows you to acquire a dependable final product that has been examined and corrected on time. For this reason, every software development offshore project includes not only a project manager but also a QA team that is responsible for debugging written code to ensure that future product runs smoothly.

The latest technologies

Most offshore outsourcing software development companies specialize in certain sectors or operate with technology stacks that are rare for in-house team qualification. So, you may be able to hire a certified professional (or even a team) with the needed hard skill set from a vendor’s company. This may help you build an advanced product that will be competitive in the market.

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Offshore Software Development Challenges

The offshore software development model is attractive for a lot of companies due to its set of undeniable advantages. But it also has a bunch of hidden hazards, and you should know them in order to easily obtain a product that will satisfy your company’s business needs. We’ll name the most common of such challenges to help you understand how to offshore software development with fewer problems.

Time zone differences

When dealing with offshore IT development staff, time zone difference is crucial. If you and your vendor are in different time zones, communication may take a little longer. In addition, product development may be delayed from time to time if the organization has a critical question that requires your response and permission. At Cleveroad, we schedule all meetings in advance to improve communication efficiency and reduce possible time lags.

Communication issues

This is one of the most common software offshore development problems, which can be traced back to various factors. Your communication, for example, may degrade as a result of your vendor's poor command of the English language. To cope with it, pick an IT partner, assess their English proficiency ahead of time, or discuss it individually with the company's representative or team members.

Security challenges

Data leakage is one of the most pressing challenges today because working with offshore software companies typically entails providing some information. You can address the problem by contacting a partner firm and signing an NDA.

You should also ask the vendor if they employ security technologies like user privacy policies, private data storage, and encryption or if their solutions comply with the General Data Protection Regulation (GDPR), among other things.

Quality assurance

If you value quality over quantity, start thinking about it now. You should also be active in the software outsourcing workflow, attending all meetings to keep track of the business position and grasp the team's daily challenges.

Moreover, examine your forthcoming team's skill set (including hard and soft abilities). Keep in mind that both types of capabilities are necessary for optimal growth.

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Offshore Software Development Steps

It’s high time to consider what steps to take before the offshore software development process starts and how to find a reliable company.

Even if you choose to assign all technical tasks to an outsourcing team to develop offshore software, you would still have much to do as a stakeholder.

1. Research your target audience

Before looking for an offshore software programming vendor, analyze competitor solutions to see what extra features you can provide your audience to help them solve their problems. You can check many aspects of your competition if your project involves offshore site building. You can find out where their traffic originates from, what technologies they work with, and how they scale, for example. It's achievable owing to the plenty of web analytics tools, and the information you gather may help you make better judgments.

2. Obey regulations

If your domain requires it, you must check that the product you plan to develop complies with current laws. It may be relevant for software that uses private data or those linked to payments. For example, if you need to develop a healthcare solution, you must make your app GDPR-compliant (if your target audience is from Europe) or HIPAA-compliant (oriented on the US market). If your app deals with payment cards and systems, you should know how to become PCI compliant: this standard helps to protect private data from being hacked.

3. Identify your needs

We mean technologies to use, and specialists to hire (e.g., designer, developer, etc.). If you're not sure about all this, you can ask for consultation with your offshore software development company.

It's a good idea to complete this list before contacting a company or at least take a break after consultation with its representatives to consider these points. This way, you'll have a clear understanding of what you need and define your goals.

4. Define your goals

Developers without well-defined objectives may be unsure of what they need to perform and, as a result, may feel constrained and lose productivity. All this leads to increased project risk and lower earnings for your business; the quality of offshore programming services will also suffer. Setting clear, achievable goals for your offshore staff is important to your software project's success.

How to do it? For example, you can use a SMART system, according to which your goals should be Specific, Measurable, Achievable, Relevant, and Timely. This abbreviation will help you analyze the set goals and improve them to obtain a high-quality product.

5. Select a trustworthy partner

For offshore software development to succeed, choosing an experienced and reliable technical partner is crucial. Here's some ways to find a sure-fire IT outsourced partner:

  • Examine the experience level of the software provider and check their portfolio
  • Check the company's expertise and its relevance to your business domain
  • Pay attention to he level of team’s English proficiency to ensure you get a product corresponding to your requirements
  • Read the clients’ reviews, on Clutch or GoodFirms to decide whether it’s a good idea to work with the company
Steps to hire offshore developers

Steps to hire offshore developers

How to Choose the Right Offshore Software Development Outsourcing Company

There are hundreds of offshore software development companies. How to choose the most reliable one? Let's try to find this out.

Verify the references

How to determine if an offshore software development outsourcing company is worth cooperating with? How to find the best one? We have already provided you with a few tips above, but there are more. To decide what company is right for you, study it in more detail:

  • Look through the company's website, explore the blog materials
  • Carefully examine the portfolio to get acquainted with the vendor's projects
  • Check out the company's profiles on LinkedIn and Dribble
  • Learn more about offshore developers on their social networks: Facebook, Instagram, and Twitter

This information can tell you a lot about the organization and its history, and help you make a decision.

Check the rankings

You may take it a step further and look for specialist rankings on sites like Clutch or GoodFirms. Based on customer evaluations and other criteria, they will offer you the finest outsourcing companies in your chosen location. If you're looking for offshore software development services in Central Europe, for example, you may select companies based on characteristics, such as development kinds (e.g., mobile development companies).

Protect your idea

Make sure that your concept is properly secured. For this purpose, you can contact a vendor to find out whether they sign a non-disclosure agreement (NDA) or not. It's essential if you have a unique app idea and want to know it won't leak anywhere.

Looking for a reliable vendor?

Our team is ready to help you and provide you with top quality offshore development services

Practical tips for managing offshore development teams

Suppose, you've decided to work with an offshore development company or establish an offshore development center. Now, how to rest assured that you get good outcomes and hassle-free communication? We've prepared some actionable tips to cooperation success:

Share the project vision

Your team needs to know all the details about your business, deadlines, software development goals, and expectations. That way, your offshore programmer can complete the task for you in the best possible way.

Coordinate online meetings

Cooperation with offshore software developers will be more productive if you establish effective two-way communication. Determine the times and days you will contact the team or its members through audio or video conferences. This will help you track development progress and modify it as needed. Experienced offshore IT providers have a PM on their side, who keeps the client posted on the process and informs about the results of the work done

Define a shared schedule

Since offshore software development involves working in different time zones, you should set aside several hours daily when real-time communication with the technology provider occurs. Make a schedule that allows you and offshore app software developers to interact effectively. We, at Cleveroad, make an individual communication plan with each client to hold meetings at the time that is convenient for client.

Manage priorities

Before getting down to software creation, you and the offshore software developer should discuss the key performance metrics, development milestones, priority tasks, etc. Structuring the duties will speed up the work and make it more efficient.

Delegate the management to a specialist

Professional offshore outsourcing software development companies are ready to provide you with an experienced Project Manager (PM) who will set tasks and monitor their fulfillment. You can be sure of the project's high quality by delegating administration to a specialist. At the same time, you won’t spend your time studying the development details and making management decisions.

Include developers in your team

Treat each programmer as if they were an employee of your company. Ensure transparent communication, and familiarize the team with your corporate culture. So if already have an in-house team, you can make both your employees and offshore developers feel comfortable and build trust and mutual understanding.

Using these simple tips, your cooperation with an offshore software development outsourcing company will be pleasant and productive.

Cost to Hire Offshore Development Team

The cost of offshore software development differs, depending on the team’s location you choose to work with. Below are the hourly rates of specialists in the most popular outsourcing areas.

Offshore software development hourly rates

SpecialistUnited StatesLatin AmericaCentral/Norther EuropeAsia

Business Analyst (BA)





Solution Architect (SA)





UI/UX designer















Project Manager (PM)





So, depending on the region you choose and the project's complexity, the development costs will vary. Feel free to contact our specialists for a detailed estimate of the software cost for your business.

Offshore Development Advantages Offered by Cleveroad

Cleveroad is a professional offshore software development outsourcing company from Estonia. We have assisted startups, small businesses, and large corporations in achieving their objectives and bringing ambitious ideas to reality for more than 10 years. Our variety of IT services and bespoke software solutions improve workflow efficiency, address business issues, and aid in the acquisition of competitive advantages.

There is a large benefit set that you can get working with us:

  • An experienced team rapidly adapting to new requirements and modifications
  • Non-disclosure agreements (NDAs) execution per your request
  • Product quality assurance and control at all stages of the development workflow
  • Profound software development experience in various business sectors
  • Innovative building approaches and a cutting-edge tech stack
  • Post-release support, maintenance, and advertising services

Our portfolio includes a bunch of offshore software development projects in different domains. And we would like to tell you about the latest ones.

One of our works is a mental health app called Nedley Lifestyle Scorecard (NLS). The software solution is designed for the healthcare domain and is aimed to help customers struggling with depression. Using NLS, people can enhance their mental state during a particular time.

Another example of software developed by Cleveroad is a full-fledged management transportation platform built for an enterprise that offers warehousing and logistics (generally dropshipping) services. The app is intended to cut costs, save time for route planning, optimize fleet running prices, etc.

Our other offshore development work is RetailOps — a versatile SaaS platform with a powerful toolset (including Inventory and Warehouse Running, Receiving, etc.) for retail companies focused on e-commerce and omnichannel sales.

The offshore IT development sphere offers businesses a range of opportunities, according to which they are able to save their efforts, time, and money. If you also want to save your resources and achieve good results, you can also apply to offshore IT professionals in order to obtain a completely new product, flexible and thriving on the market. Contact us to get a consultation on all questions related to offshore software development you may have.

Frequently Asked Questions
What is offshore software development?

Offshore software development means transferring a project (fully or partially) from a client to a third-party software development vendor.

What are the benefits of offshore software development services?

The main benefits of offshore software development services are:

  • Reduce development cost
  • Diversity of qualified talents
  • Scalability
  • Strong skillset
  • Employee training
  • Quicker concept implementation
  • Low building risks
  • Latest technologies
How can I get started with software company offshore cooperation?

There are several steps to approach offshore software development:

  • Decide on features for your target audience
  • Take care of regulations
  • Define your business goals
  • Mind needed tech stack
  • Start searching for reliable outsource software development offshore vendors
What are the drawbacks of interaction with software development offshore companies?

Offshore software development has its own challenges:

  • Time zone differences
  • Communication issues
  • Security challenges
  • Quality assurance
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About author

Evgeniy Altynpara is a CTO and member of the Forbes Councils’ community of tech professionals. He is an expert in software development and technological entrepreneurship and has 10+years of experience in digital transformation consulting in Healthcare, FinTech, Supply Chain and Logistics

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