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Benefits Of Offshore development center over outsourcing

Friday July 14, 2017,

4 min Read

Today, almost all businesses are familiar with the term outsourcing. Most of them have adopted this practice too. Outsourcing involves contracting out of the business process and non-core and operational functions to another party. But it is not an easy work.

Outsourcing is continuously facing challenges which do not usually come to the mind with regards to some engagement purposes. The more difficult thing is that captive model, which is used by some organizations. Although the model was developed to provide ownership and extra regulation. But in several instances, this is treated only as the regular outsourcing relationship. Due to this, it has taken away the expected competitive benefits.

Another version which has been existed for a while is the Offshore Development Centre (ODC). It tests, develops, and deploys the software offshore along with the benefits of having a core team and dedicated infrastructure. With the benefits of a core team, businesses will establish an external outsourcing relationship with the captive model which acts as their extension.

The model of offshore development services is more economical than simply outsourcing the project. There is a project manager who manages and controls an offshore development center team on the basis of expectations and directions of clients. With a commercial structure of offshore development center, the client pays a fixed cost month wise to create a big project or the series of projects. Some offshore development centers have the yearly evaluation cycles to assess total quality, modify rates, align the investment, and conduct performance reviews along with the ultimate budgeting process of organizations.

With the help of offshore development center model, businesses can manage this team as it is their own organic extension, regulate expenses, and acquire some more exposure.

Attributes of Offshore Development Center Include:

A dedicated facility which houses relevant corporate brand or culture

A dedicated core team for offshore development practice

Dedicated infrastructure, as software and hardware that is aligned with the company

Dedicated security policy which adheres to the standards and requirements

A dedicated HR program

Team adaptability to scale up or down as necessary without subverting the budget or raising the expensesMany businesses compare this to the BOT model, which is Build, Operate, Transfer model. It is true that BOT strategy is a kind of offshore development center, still, there is a high difference in ownership.Now the question is, what can customers expect from the Offshore development centers?


The complete operation of supplier gets decreased in the offshore development center. Also, the clients would prosper from these savings

As visibility and commitment are better, the supplier is able to provide better commercial model

Improvements in the substantial retention rate results in the reduction in the conventional challenges or attrition

Suppliers would be more engaged and interested in knowing about the results and outputs, so more value would be produced which meets the objectives of client


The time spent in the BIDS and RFPs/RFI is eliminated or reduced by allowing more focus to be paid on producing the value

The core team principle for offshore development means that the learning curves get reduced over time

Flow of productivity gets maintained by the employment flexibility


Suppliers are able to prepare for work better, resource coordination and capacity have enhanced, and demand also gets better comprehended

Team education and cultural integration enhance quality control and modify focus

Information transfer is managed and executed better, and used across the team and client organization

The working principles of Offshore development centers should be developed and followed strictly as they are comprised of some key areas, such as:

ODC Steering Committee

To track the ongoing work, to ensure that cultural mentality is getting used and maintained and to make changes quarterly inspections take place

Represented by the government model and agreed on escalation which includes senior management as the final decision making authorities. The management would be selected from both the sides

Yearly evaluation would take place for business planning and joint strategic technology

Relationship Management

There are distinctly defined rules of the engagement and some roles to ensure teamwork and regular interaction from both sides

To trade crucial and necessary data with the stakeholders, there would be a properly defined communication process

Outsourcing is still an important part of a strategy for many startup and enterprises. Companies are attempting to find more effective and new models that combine benefits of in-house development and outsourcing such as deep process ownership and low costs at the same interval. offshore development services is the model which can bring agility into the development process and build the long-lasting relationship for both the sides. The best outsourcing suppliers have already adopted the Offshore Development Center and provide this kind of services to businesses because high client satisfaction level and long-term relations are exactly what companies are seeking for.