A 2021 Brief Offshore Software Development Guide

The 2020 Wrapped

At the beginning of 2020, the coronavirus only took several weeks to spread globally, impacting millions of lives. But luckily, a few days ago, we received spectacular news about the COVID-19 vaccine. The United Kingdom was the first nation vaccinating its citizens with an authorized COVID19-shot. 

The COVID-19 pandemic is undoubtedly an important historical milestone.  The virus has affected the financial stability of all countries. Consumer spending is expected to decline as a result of the economic downturn in a post-COVID-19 world.

Marguerite J. Dennis, an internationally recognized expert of international strategic plans and student recruitment programs, mentioned some of the economic impacts of COVD-19:

• The Asian Development Bank announced that the coronavirus pandemic could cost the global economy from $5.8 to $8.8 trillion.
• The gross domestic product for the United States decreased at the annual rate of 48 percent in the first three months of 2020, 32.9 percent in the following three months. Consumer spending in the USA decreased by 10 percent compared to 2019. 
• The UK’s economy shrank 20,4 percent in the second quarter of 2020.
• Japan’s GDP got smaller, noticeably from April 2020 to June 2020 (27.8 percent). This is the most significant decline in Japan in postwar history.
• South Korea experienced an economic downturn in August 2020 for the first time in 17 years.
• South America’s economies are estimated to decline by 9.4 percent this year as well.

We’re all eager to leave 2020 behind. Of course, there’s no evidence that we’ll have easier days ahead. But we’ve got work to do!

The 2021 economy could be an absolute juggernaut, stated Derek Thompson, a staff writer at The Atlantic, since we are experiencing the strangest economy ever. Millions of people have lost their jobs, but the stock is rising.

(Read more about What Will Happen to Cities and The Economy in 2021. We thought this is an excellent article which will put some food for your thoughts).

The economy is deemed to bounce back in 2021. 

The 2021 Preparation

Thompson also mentioned, although in the next year scenarios, the economy would still snapback, the pandemic’s shadow would always be around for months or years. 

Many trends are emerging as a result of the 2020 pandemic. As mentioned in many previous articles, we want to reinforce the idea of remote work and automation being a thing in 2021. Emerging technologies and other innovative, newborn technologies have made their way, enabling businesses to make fair use of them; therefore, gaining competitive advantages. 

The 2020 pandemic has set us to become more acquainted with uncertainty. It showed us the importance of technologies and how it has helped us to overcome the current crisis. 

For the upcoming year, the market research company Forrester Research highlights important trends for next year. Five key trends that will play an essential role in the future are:

1. The demand for ethical Artificial Intelligence
2. Business automation and Robotics 
3. Cloud-native technologies
4. Shifting cloud strategies toward the edge
5. Remote work will permanently increase

Why offshore software development In 2021

We’re now about to enter the post-COVID-19 phase. Like mentioned, the importance of technologies has been proved, especially during critical times like now. Taking automation as an example, robots could cut international labor costs, which is beneficial for the company’s bottom line, the self-quarantine phase, and a quick ROI. 

And by outsourcing tasks to a third-party software developer(S), like mobile app development services, blockchain development companies, DevOps consulting services, SAP consulting services, Big data services, Cybersecurity consulting services, etc. Typically, a software development firm that provides software development services is from a foreign country since they can help save a lot of money. 

Outsourcing can be done by:

• Hiring an individual developer or an agency
• Hiring the whole project or only specific features in a project
• Hiring a dedicated team of developers

If you outsource to some companies located in foreign counties (up to five time zones away), it is called offshore outsourcing. And if you hire a company within your country, from one state to another, it’s called onshore outsourcing. There is also a term known as nearshore outsourcing, which is when you employ a developer team from the three farthest time zone countries. 

Also, there are a few more terms related to outsourcing that should be taken note of: the dedicated team model (this is not geographically specific but revolve around the idea of control and ownership; the hired team has all kinds of engineers required and has full control over it during the project), smart-sourcing (the approach implying a division of tasks), build-operate-transfer (is when we hire a provider to install the facility and handle it back after a particular time, mostly used in the engineering and construction industries).

If you’re considering software outsourcing, here are some pros and cons:

Pros & Cons of Offshore Outsourcing

Pros

• Less costly:

when you offshore outsourcing, the living cost is often lower, countries other than Northern America and Western Europe charge less.

• Competent/Specific skills:

when offshore outsourcing, not only can you save costs, but also have access to the global talent pool. 

• No training, no administration:

the outsourcing companies have already take care of and train their employees, as they have to stay competitive. Therefore, you can save time and capital since there are fewer operational and administrative costs, no office space needed, equipment, etc.

• Shared responsibility:

during the project, offshore companies share and manage risks as they depend on the end result and the deadlines.

Cons

• Communication issues:

Different time zone, bandwidths, working hours can slow down the development process. Monitoring and resolving issues can be problematic sometimes.

• Cultural gaps:

Different working culture could results in an unpleasant experience if not recognized and accepted beforehand

• Less guarantee of quality:

there is a chance of hiring a little to no skills or commitment to do the job when it comes to cost reduction. Check the country’s average paying rate for IT first, question it if it’s surprisingly so much cheaper than the average costs.

• Data security:

your company’s private information might face the risk of data breaching.

How to choose an offshoring outsourcing company

To help you reduce the risks when it comes to offshore software development outsourcing, you’ll need to:

1. Study the marketplace and the potential niche. Start off by looking for those who have had experience in developing similar projects, what technologies they are using, what are their strengths and weaknesses.
2. Put together a roadmap with milestones and benchmarks. Determine what the priority should be, what your expectations are. Ensure that you are both willing to build a relationship that meets legal regulation, especially when you want to develop apps that contain personal data and payments.
3. Ask for each developer’s portfolio, what they are capable of, their skills, technologies, tools, etc. Check their LinkedIn profiles, their code writing (if possible)m endorsement. You can run a test if you want to. Don’t get distracted by polished portfolios.
4. Prepare a detail-oriented document of project requirements and quality standards.
5. Reach out to as many potential firms as possible because, most importantly, you want to hire a team that’s going to be the best fit for your project. And by reaching many software outsourcing companies, you can determine which outsourcing model fits best for your project.
6. There are millions of outsourcing companies worldwide; therefore, the best advice we have for you is to ask for a reference. 
7. Last but not least, have a look at their company culture as it reflects their working style. The company shares the same working culture as you will be your best trustworthy partner and ensure there will be little communication issues when working together.

4 Tips On How To Conduct Offshoring

1.  Set quality standards for architecture and code.
2. Negotiate rates and deadlines
3. Communicate frequently and track progress. Weekly reports and daily catch up are essential.
4. Protect the team by signing NDAs and non-compete agreements. All stakeholders should understand intellectual property rights and confidentiality terms.

Read our Software Development Rates By Country - Offshore Services Cost & Guideline 2020 / 2021 to have a brief idea about how much you will pay for your development project.

Conclusion

Of course, there’s an ongoing debate related to outsourcing: should I go with offshore software development or onshore? Will it benefit my business? Offshore software development brings somewhat risks due to timezone, language, and geographical differences.

But risks are everywhere. As a software development company, we understand the frustration when handling important projects to outsiders; therefore, we are proud to be one of the leading offshore software development providers in Vietnam. With 16 more years of experience in the industry, our team of experts is confident in turning your business vision into real solutions. 

Contact us now to know about our digital transformation services and software development ability. We are eager to build a successful 2021 with you!

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