Startups’ Guide To Offshore Software Development


Globalisation has become a buzzword in recent years. However, many businesses still struggle with the idea of offshore software development. Oftentimes, the biggest concern is whether it’s possible to save money while hire dedicated offshore developers rather than doing it locally. 

Do Your Homework Before Hiring an Offshore Development Team

You have to do your homework before you hire dedicated offshore developers. This can be a long process, but it is worth it in the end.

There are two main things you need to consider when deciding whether a company will be the right one for you:

  • Reputation- You want to hire someone who has a good reputation in the industry and has been around for a while. If they are new on the scene and haven’t established themselves yet, then there’s no way of knowing how well they will perform for you (and what their true capabilities are).
  • References- Ask for references from previous clients of theirs before making any decisions about hiring them yourself. If they don’t have any other clients that would happily speak with you about their experience with this particular company, then it might not be a good choice.

Learn About The Remote Cooperation Models

Once you have decided to outsource offshore software development, it is important to understand the different models of remote cooperation between developers and clients. Each model has its own pros and cons, so before outsourcing your project it is useful to consider each one in depth.

  • Fixed Hourly Rate: This is the most popular choice for startups because it allows them to predict costs reasonably accurately. However, this will not be the case if your project turns out longer than expected or if there are changes in its scope during implementation. 
  • It also does not provide any protection against additional work or other costs that may arise due to unforeseen circumstances such as delays caused by third parties (e.g., clients’ IT teams).
  • Fixed Cost per Feature/Functionality/Unit of Work: This model gives companies more flexibility than fixed hourly rates but comes at a higher price tag because contractors can charge more per unit according to their experience levels and professional skillset required by each task within their job description.

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Consider Different Types of Contracts

You should also consider the type of contract you want to use. There are 3 major types:

  • Fixed-price contract: This is the most common type of offshore software development services agreement. In this type of agreement, you pay your supplier a flat fee regardless of how much time or materials they use to complete your project. 
  • This means that if you ask for something complex that takes longer than anticipated to create, you still have to pay for their time at the agreed-upon rate. It’s important to note that some companies may offer fixed pricing but then charge extra if there are any changes made after signing the contract (this could be referred to as “change orders”). 
  • The benefit of this kind of contract is that there’s no risk on either side – if all goes as planned and nothing changes, then everyone wins! If not…well…you get what you pay for…and sometimes more than what was originally expected 🙂
  • Time & Materials Contract: This type of offshore software development agreement works much like a typical hourly billing model where both parties agree upon an hourly rate but no specific completion date or deliverable(s) has been set forth by either party in advance (i.e., before starting work). 


So, as you can see, there are many things to consider when you want to outsource your software development. The most important thing before you hire dedicated offshore developers is that you know what the process will look like and what it will cost to hire an offshore team.

 It’s also good to be aware of the different types of contracts so that they align with your needs as a business owner or entrepreneur.

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