What Is Offshore Software Development?

Updated 23 Aug 2021

Published 24 May 2019

7 Min


If you want to create a product from scratch there are thousands of things you have to bear in mind all the time. Team management, tech peculiarities, deadlines... This is only the tip of the iceberg. Things get less complicated if you’ve chosen offshore software development. As you delegate a part of responsibilities to specialists, there is no need for a heavy focus on management and many other things.

This guide will show you whether the offshore software development is a good choice for you, as well as how to make fewer mistakes when you choose an offshore software development company and cooperate with it.

What Is Offshore Software Development?

Put simply, offshore software development implies transferring work to a third-party service provider. In other words, an interested party entrusts implementing a part of the project (or the whole project) to an experienced software service provider or a person. There is a vast of tech-related services that can be outsourced: mobile development services, web development, UI/UX design etc.

If you want to delegate the whole project to a third-party, you should rather look for a full-cycle software development company than a freelancer. That's because the freelancer may have a good expertise in one or several related areas (e.g. programming). While to create, let's say a mobile app, you need at least one skilled designer, QA engineer, and software developer.

Talking about an offshore software development company, you should be ready that it's headquarter may be placed somewhere in Eastern Europe or Asia. These are the most popular outsourcing destinations with the lowest pricing on the market and qualified workforce.

If you don't want to cooperate with a firm situated so far away, you may consider a variant of onshore and nearshore outsourcing. Let's consider them in more details:

Offshore software development services imply that the headquarter of a company you cooperate with is placed somewhere far away from your native country. As a rule, there is a significant time zone difference.  

What does offshore software development actually mean?

Offshore software development model

This way, the outsourcing model depends largely on the location of you and the company you partner with. If you’re from the US and you outsource, let’s say, to Ukraine — it means you use offshore software development services as the time zone can differ significantly.

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.

Reduce costs on development

As a rule, offshore software development companies are concentrated in regions with low fees and the cost of living. That’s the reason why the cost of software development services is lower than in most countries. In Ukraine, you will pay $25-50/h, while in the US this number ranges between $150-250/h, in the UK $50-100/h, etc. Besides, many offshore software development companies strive to create the best conditions for their customers and provide certain services at no cost. For instance, at our company, we don’t charge money for business analysis & consulting as well as provide free marketing bonuses.

Offshore software development rates by country

Offshore rates for software development

Qualified talents

No doubt, the offshore software development company should be competent. This means it should be placed in a country with a big number of specialists. If you compare the quality of tech specialists in the US or other countries to European ones you won’t find any significant differences. For example, there are over 40K of annual tech graduates in Ukraine 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.

Scale with ease

Offshore software development model makes it easy for you to scale up and down. Development is a tricky thing and you never know exactly how many developers one or another stage of the project may require. Respectively, if you have too much or little developers involved in a project, it's a matter of a message to solve this problem. This way, you avoid overpayment as well as time-consuming searches of candidates. 

Employee training

Let’s say you hire an offshore web development company to help you with a real estate web application. Then, there is no need to waste your time on employee training as your partner company will take care of it. What’s more, many offshore software development companies try to form a team in accordance with their employees’ expertise in a certain industry.

Discover what is the project planning phase and why it’s a must for almost any project.


Most offshore software development companies are focused on certain industries or technologies. So if you need to find someone with strong and specific expertise — consider the software outsourcing companies.

Offshore Software Development Issues

Nothing is perfect. The offshore software development model has it's own disadvantages.

Slower communication

If there is a time zone difference between you and your offshore software development company, the communication may slow down a bit. In fact, product development may freeze from time-to-time in case the company has some important questions requiring your answer and approval. However thanks to technologies there are many ways to solve that issue like apps for instant messaging and video calls. Just coordinate the meetings along with checkpoints to keep track of your project.

Culture gap

This is especially true if your offshore software development firm is from Asia. However, in Eastern Europe and it's other parts, the cultural realities are pretty similar to the ones in the US, Canada, Australia, etc. So, there are practically no cultural barriers if working with European companies. Moreover, most tech specialists from that region speak English on a good level and you’ll definitely understand each other.

Steps to Offshore Software Development

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

Get the Work Done on Your Side

Even if you decided to delegate all tech responsibilities to the offshore software development company, there is still plenty of work for you as a stakeholder.

1. Decide on features for your target audience

Analyze solutions from competitors and figure out what additional features you can provide your audience with to solve their pains. If your project implies offshore website development, you can track multiple parameters of your competitors. For instance, you can learn where their traffic comes from, what technologies they have used, how they scale and so on. It's possible thanks to a myriad of web analytics tools and this data can help you to make informed decisions.

2. Take care of regulations

If it's required for your industry, you have to ensure that the product you want to create complies with the existing regulations. For instance, this can be applicable to apps using personal data or the ones connected with payments.

3. Define your objectives

You should define your main goals to be able to set priorities throughout the project. Also, set metrics you want to reach as this will help you to measure your success.

4. Identify what you need

We mean technologies to use, as well as specialists to hire (e.g. designer, developer, marketer). If you're not sure concerning all this, you can ask for consultation in 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 it's representatives to consider these points. This way, you'll have a clear understanding of what you need and be able to define your goals.

Choose the Right Offshore IT Outsourcing Company

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

Check references

What does this mean? Look through the company's website to find some details about their previous projects or the overall expertise. Case studies, testimonials, blog posts and so on. All this can tell you a lot of things about the company and it's experience. 

Case study: Theapplication for effective networking allowing to easily remember all the new acquaintances.

Look through rankings

You can go further and search for specialized rankings on resources like Clutch. They show the best outsourcing companies from the region you pick based on customers’ reviews and other factors that you can look through. For example, if you’re looking for offshore software development services in Ukraine, you can filter companies by many parameters including development types (e.g. mobile development companies).

Protect your idea

Contact a company to find out whether they sign a non-disclosure agreement (NDA) or not. It's very important in case you have a unique app idea and you want to be completely sure it won't leak anywhere. 

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Frequently Asked Questions

Offshore software development implies transferring work to a third-party service provider.

The main benefits of offshore software development services are:

  • Reduce development cost
  • Diversity of qualified talents
  • Scalability
  • Strong skillset
  • Employee training

There are several steps to approach offshore software development:

    1. Decide on features for your target audience
    1. Take care of regulations
    1. Define your business goals
    1. Mind needed tech stack
    1. Start searching for reliable IT vendor

Offshore software development has its own disadvantages:

  • Slow and inconvenient communication due to time zone differences
  • Culture gap and language barrier may appear
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