Offshore Outsourcing and Software Development Companies [Detailed Guide]

As your startup or scale-up grows, you’re constantly under pressure to innovate and deliver products faster. But finding and retaining local development talent can feel like an uphill battle, draining your budget and slowing your progress.

However, offshore software outsourcing is cost-effective and scalable. With access to a global talent pool, you can speed up development, lower costs, and maintain a competitive edge—all without sacrificing quality.

In this article, we illustrate why you should consider offshoring, how to outsource effectively, and a few offshore development companies you can outsource to.

What is Offshore Outsourcing in Software Development?

Offshore outsourcing in software development is the process of partnering with a development team or company located in a different country—typically one where labor costs are lower but the talent pool is equally competitive. Imagine it as extending your technical capacity across borders, allowing you to tap into skilled developers and IT professionals at a fraction of the cost you might incur locally.

It allows you to focus on building your product and delivering value while offloading the development work to experts abroad. So, rather than spending time and money setting up in-house teams, offshore outsourcing gives you a shortcut to assembling the skills you need.

Why Companies Choose Offshore Software Development?

Let’s break down why companies like yours choose offshore development:

Cost savings: lower labor costs compared to local markets

Labor costs in countries like India, Ukraine, or Vietnam are substantially lower than in the U.S., Western Europe, or Australia. For example, instead of paying $150,000 annually for a senior developer locally, you might spend half or even less when hiring offshore.  

Access to talent: broader talent pool, especially in emerging markets

Countries like India, Poland, and the Philippines have highly skilled developers, engineers, and IT specialists. By outsourcing, you’re no longer limited to the talent available within your local area—you can choose from the global market. This is especially helpful when you need niche expertise or specific technology skills that are hard to find locally.

Scalability: flexibility in expanding or reducing teams

Assuming you’re launching a new feature or working on a major product, you may need to scale up your development team quickly. Offshore providers can easily accommodate this, allowing you to onboard more developers as needed. On the flip side, when a project wraps up or enters a maintenance phase, you can scale down just as effortlessly—without the headache of layoffs or contract renegotiations.

Faster time to market: round-the-clock development due to time zone differences

With offshore teams working in different time zones, you essentially get a 24-hour work cycle. When your in-house team clocks out for the day, your offshore developers can take over, keeping progress moving round the clock.

Key Factors to Consider When Choosing an Offshore Software Development Company

Take a look at some critical factors to evaluate:

Expertise and technical skills: assessing relevant domain knowledge

When vetting potential partners, you need to ensure they have the technical expertise and domain knowledge required for your project.

Review their portfolio and case studies to see if they’ve successfully delivered similar projects before. For instance, if you’re developing a SaaS product, make sure they have experience in that field. Don’t hesitate to ask for references or sample projects to gauge their skills firsthand.

Time zone alignment: how to manage differences effectively

Time zone differences can either be a blessing (as mentioned in faster time to market) or a challenge. To make it work in your favor, consider how much overlap you need with your offshore team.

Choosing a country with a smaller time difference might make sense if you require real-time collaboration. However, if you can handle asynchronous communication, a bigger time gap may work just fine as long as there are clear schedules for meetings and updates.

Communication and collaboration: ensuring clear channels for regular updates

Speaking of updates—good communication is vital when working with offshore teams. It’s important to establish clear communication and collaboration channels from the start.

Will you be using Slack, Zoom, or some other tool? How often will you get progress updates—daily, or weekly? Effective communication is vital, to avoiding misalignments and ensuring that projects stay on track.

Cultural compatibility: the importance of shared work ethics and values

Cultural differences can sometimes lead to misunderstandings, so assessing cultural compatibility with your offshore team is crucial. Are they aligned with your company’s work ethic, values, and expectations? For instance, in some cultures, deadlines are considered more flexible, while others treat them as rigid milestones. Understanding these dynamics upfront can help prevent frustrations down the road.

Security and compliance: addressing concerns around data protection and intellectual property rights

Lastly, security and compliance should never be an afterthought with offshore development. Make sure your potential partner has robust measures in place for data protection and intellectual property (IP) security.

Ask about their protocols for handling sensitive data and their history with compliance (especially with regulations like GDPR if you operate in Europe). Ensure that the contract includes clauses that protect your IP rights.

6 Reputable Offshore Outsourcing Software Development Companies

1. Zoolatech (Europe)

Zoolatech provides full-cycle software development with expertise in custom solutions, mobile development, AI, and cloud migration. They cater to startups, enterprises, and Fortune 500 companies, focusing on long-term value and sustainable growth through expert teams.

Services

• ODC
• Managed Delivery
• Team Extension

2. Future Processing (Europe)

Future Processing is a Poland-based consultancy that provides end-to-end services. They focus on long-term partnerships and complex software projects and emphasize transparency and people-first values.

Services

• Consulting
• Digital Product Services
• Cloud
• Data Solutions
• AI & ML Services
• Cybersecurity
• Software Development

3. Evozon (Europe)

Evozon, based in Romania, focuses on strategic consulting, UX/UI design, and software development. It serves industries like automotive and eCommerce. With enough experts, it prioritizes continuous learning and fostering innovation.

Services

• Consulting
• UX/UI Design
• Frontend & Backend Development
• Testing
• Cloud
• ERP
• Data Science

4. Cegeka (Europe)

Cegeka began as a family-owned tech company and now has a global team of over 9,000 professionals. They serve our 2,500+ customers across 19 countries.

Services

• IT Team Extension
• Outsourcing & Managed Services
• Consultancy
• Projects

5. Coherent Solutions (Europe)

Coherent Solutions, with 2,000+ employees in 10 countries, specializes in digital product engineering, mobile development, and cloud solutions. They aim to empower businesses with modern technology while fostering transparency and collaboration.

Services

• Artificial intelligence
• Data and Analytics
• Product Design and User Experience
• Salesforce Development
• Quality Assurance
• Mobile Development

6. Elinext (Europe)

Elinext delivers custom software and mobile development services with expertise in ERP and Asset Management, CRM and Loyalty, IT Infrastructure Management, Document Management, Accounting, Banking, Healthcare, and IoT domains.  

Services

• Custom Software Development
• Business Analysis
• UI & UX
• Web
• Mobile
• DevOps
• Maintenance and Support

Outsource to Proficient Agencies at Pangea.ai

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FAQs

What is offshoring in software development?

Offshoring in software development refers to hiring a team or company in a different country, often where labor costs are lower, to handle software projects. This allows businesses to access global talent while reducing expenses.

What is outsourcing software development?

Outsourcing software development involves hiring external specialists, either locally or abroad, to build or manage software projects instead of relying on in-house teams.

How do I find an offshore software development company?

Research companies via platforms like Clutch, check client reviews, and assess their technical expertise, communication practices, and security protocols.