Most well known development companies are located in big cities in Asia, Europe or America. However, if you hire a software developer in the big cities, you will have to spend a lot of money. It’s not just about basic salary, but also other expenses, such as taxes and equipment. That’s why a lot of businesses prefer to set up ODC. So what are the offshore development center benefits? Read on!
What is ODC?
ODC stands for Offshore Development Center. This is known as a space or office that a company uses to render software development services. The company can set up their ODC anywhere in the world to reduce the financial burden. In addition, they can also enjoy simplified taxation, and access to a global talent pool.
Most of the time, companies choose to set up their ODCs in a location where living costs are much lower than their native country.
The advantages of offshore development center
When it comes to offshore development center benefits, there are so many. That is why a lot of big businesses are so interested in this approach.
Reduce the cost
As we already mentioned, ODC is usually located in countries with lower living expenses compared to the location of the headquarters. That means companies can reduce the cost of labor and infrastructure.
It will also be easier for them to deal with taxes and bring them other benefits when hiring local employees.
One of the biggest advantages of offshore development center is the lower living cost. Because it also offers cheap facilities. When a business establishes an ODC in the location with much cheaper living expenses, it can reduce a lot of facilities costs, including office rent, infrastructure, internet, maintenance, and many more.
Expand the business market
When building an ODC in another country, the reputation of your business will obviously expand to the country, let alone other countries in the area. As a result, you can also increase sales volume as your business gets closer to a new market with new customers whose needs are understood better by you.
Not to mention, your ODC is considered as a physical presence of your company in the target market, which means you can also reduce the logistics costs.
As your ODC is set up in another cheaper country, it will be easy for your company to scale up or down your team size based on the changes of technology or deadline and still remain within your budget.
Localize your product
Product localization is undoubtedly one of the main offshore development center benefits. If you plan for your business to reach the overseas market, it will be ideal to build an ODC. By doing that, your brand will get closer to a specific market, and it can also help localize your products to meet the needs of customers in that market.
Build a larger team with a diverse skill set
Large software development providers usually come with a large team of developers, PMs, QAs to meet the high demands of customers. If you are looking for a professional development team that is also fluent in English, Omatech has it all.
If your business is not related to technology, it will be difficult to deal with your IT problems. In that case, you might also need to spend quite a lot of operating costs just to handle these issues.
You will need experts who have experiences, skills, and are well-equipped to reduce your cost and bring out the highest quality possible.
The challenges of an ODC
So we have mentioned the offshore development center benefits, let’s now look into challenges of setting up an ODC in other countries:
There are a lot of cultural factors like working culture, time zone differences, language barriers, and many more. It will be a real challenge to smooth out these differences so that the whole office can discuss and work well together.
No business wishes to have their information exposed. However, there is always the risk of data leakage if you can’t control it well. With that said, when building a distant office, you might face a lot of cyber criminals.
Communication and management
The most effective way to enhance collaboration and management is face-to-face communication. That’s why it’s a huge challenge for the ODC and in-house team to make things clear.
You will need to hire a local agent to help your team with the recruiting process. However, it might be costly and ineffective at the same time.
As you already know the offshore development center benefits, you will need to figure out how to set up one in other countries. If you want to set up an ODC in Vietnam, Omatech can help you reduce the work and save your time with our solution.