Companies are always looking for ways to improve efficiency and achieve better results. This is especially important today when tech-powered businesses need to constantly adapt to stay competitive. One approach that has gained popularity is setting up an Offshore Development Centre (ODC).
An ODC is a group of skilled tech professionals who work for a company while physically located abroad. A business may have its main office in London, for example, and set up a Centre in India, Colombia, or Poland – three popular tech offshoring destinations.
Technology-powered businesses looking to push new and impactful features at speed can turn to offshoring to reduce operational costs and gain access to a hotbed of innovation powered by cutting-edge talent.
In this article, we will explore the benefits of setting up an offshore development centre and discuss why this has become a crucial strategy for companies aiming to succeed in 2025 and beyond.
Benefits of an Offshore Development Centre
Lower costs
Cost effectiveness is the number one benefit of an ODC. Operating a tech hub in a region with comparatively costs can be as much as 50% cheaper than running the same operation in the U.S., U.K. or Western Europe. This is largely due to the significantly lower labour costs found across offshore regions.
While a senior software engineer in Silicon Valley demands upwards of $100,000 USD per year, a highly skilled senior engineer in Bangalore, India costs less than $40,000 USD annually thanks to the lower cost of living. Seeing as labour spend is generally a company’s biggest operating expense, offshore development can free up significant funds to reinvest in other growth areas.
Access to top talent
A staggering 74% of companies globally are facing talent shortages. This talent gap is especially wide in IT and engineering departments as businesses scramble to keep up with rapid tech changes and fill specialised development, AI, data, and cybersecurity positions.
Offshore development solves this problem by giving companies access to vast talent pools full of elite professionals. In India, over 1 million tech graduates enter the job market each year bringing with them intensive training, niche skills, and advanced English proficiency. Compare this to the UK, which produces less than 100,000 tech graduates annually while facing an IT and tech skills shortage of 84%.
Dedicated teams
Offshore development and outsourcing are commonly confused but they actually represent two different ways to scale development. Here’s a quick breakdown of the outsourcing vs offshoring debate.
Outsourcing means handing over tasks to a third-party provider and is usually used for short-term projects. The outsourcing company finds talent to work on the project by sourcing labour from a “bench” of professionals. These workers take on assignments on a project-to-project basis, which can lead to a lack of investment and poor communication.
In contrast, a team created in an Offshore Development Centre is made up of genuine employees who are integrated into a company and invested in its long-term success.
The team is fully incorporated into the business’s development environment and onboarded to understand the company’s culture. The team works together as one unit, not a group of independent outsourced employees, which also contributes to employee satisfaction, productivity, and the overall impact of the work produced.
Enhanced Productivity
One unavoidable fact of an ODC is that the remote office is located in a different time zone than HQ. While this may seem intimidating or challenging, this time difference can actually boost productivity.
A key advantage is the round-the-clock development capabilities. By leveraging time zones across different locations, companies can enjoy a constant workflow handoff as progress carries on continuously instead of stopping overnight. It only takes small adjustments to working hours and meeting times to ensure that the entire global team is actively collaborating and has time for calls, brainstorming sessions, and company-wide stand-ups.
Conclusion
Setting up an Offshore Development Centre offers numerous benefits for businesses looking to stay competitive in today’s rapidly evolving market. Leveraging the skills and cost-effectiveness of globally distributed teams means that companies can significantly reduce expenses, enhance their capabilities, and achieve better outcomes while remaining agile.
Collaborating with a dependable partner that can help you build an offshore development centre is a surefire way to provide the necessary boost your organisation needs no matter what challenges come your way.
