In the past, most businesses have turned to outsourcing companies to source suitable talent. However, more and more businesses are also realising the benefits of establishing a dedicated offshore development centre (ODC) in an outsourcing country.
While ODCs are not a new concept or hiring model, few businesses are aware of the many benefits of establishing one. In this article, you will learn more about ODCs andHow to set up an offshore development centerSuccessfully.
What is the Offshore Development Center?
An Offshore Development Center is an extended team, usually specializing in IT or development, that is created offshore to work on your projects. This offshore team acts as an extension of your in-house team and is tasked with fast-tracking your projects.
Often, with the establishment of an ODC, an offshore partner company provides this capability and helps source, mentor and manage the highest quality resources for increased productivity.
The benefits of establishing an ODC include:
Reducing salary costs
With an OCD, you can hire talent at a lower salary rate compared to sourcing local workers, which also requires HR costs.
Attracting more talented resources
You can establish an OCD in a country that has a larger talent pool than your home country. This will allow you to hire more skilled and experienced employees.
Reduces infrastructure investment
Creating an in-house infrastructure to complete certain tasks and processe list of philippines cell phone numbers can be very costly. By establishing an OKB, you can access the technology and the physical and organizational structures and facilities that meet your needs at a lower cost.
Opening an ODC involves a few key steps that will ensure you tick all the boxes when it comes to meeting project needs and overall compliance with legal entities. Here are all the steps to setting up a successful center:
Determining a suitable location
Finding an office
Recruitment of experts
Getting legal support
You can set up an ODC independently, but it can be less time-consuming and more cost-effective to contact a professional local agent.
It is important to note that the ODC format is different from pure offshoring. With offshoring, you alsohire special teamsfrom distant countries. However, since you are outsourcing to them, the provider becomes the legal employer of your technicians who only contract with them. offshore development service
solutions for you. With ODC, your company keeps the branch, pays the rents, owns the equipment andhires offshore developersand administrative staff.
At this point, you’re probably seeing that setting up an offshore development center isn’t always simple and requires a significant investment of time and capital. The costs can also increase when you hire a local provider to help you set up such a center. However, in the long term, you’ll spend significantly less on tasks and processes, your brand will have a presence in another country, and you’ll have the opportunity to scale in your industry.
Popular IT Companies Using ODCs for Offshore Development
Many IT giants and tech startups have Offshore Development Centers. Many of these companies call them R&D (Research and Development) Centers. Such branches operate under the same branding, so they share the same corporate culture and comply with the internal requirements for in-house teams. However, developers often enjoy a more relaxed work environment and flexible schedules.
Well-known brands with ODCs in different countries include Google, Amazon, Grammarly, Oracle, Samsung, People.ai, Lyft, Boeing, Snap, ABBYY, TemplateMonster, and many more. And they benefit not only from lower hourly wages for local developers, but also from secured intellectual property rights and increased brand awareness.
These popular companies are very successful with their ODCs or R&D, but there are still some risks to watch out for. These risks include:
Too many recruitment agencies involved
Ignoring office location details
Having incompatible company policies
Lack of an intellectual property rights agreement
Keeping these risks in mind and finding appropriate solutions to overcome them can make the difference between successfully setting up an ODC or R&D and failing.
Benefits of Outsourcing Services for Your R&D
Effectively managing business processes and investing in quality IT solutions is the nervous system of most modern businesses today. From a small startup to a large company with hundreds of employees, it is necessary to take business management and IT seriously.
However, most businesses do not have the resources to manage these tasks effectively. As a result, they turn to outsourcing. But which tasks are most commonly outsourced to a BPO service provider?
BPO services
Business process outsourcing(BPO) involves contracting out business processes to an external service provider. These services typically include accounting, payroll, sales, telemarketing, data logging and management, digital marketing, customer support, and more. Services can be technical or non-technical and often perform complementary business functions.
IT services
Nowadays, businesses need to constantly improve themselves.IT infrastructureand offerings that will enable them to stay ahead in the digital business world. Some of the IT services typically outsourced include hardware maintenance, software and systems development, networking, IT development services , IT consulting, security solutions, testing and backup services.
Outsourcing core business tasks and IT services is often seen as a management strategy for businesses to maximize the level of service they receive at the least possible cost.
While this is a major advantage of outsourcing, it is not the only reason why companies consider outsourcing certain processes. Here are all the benefits of outsourcing services, including IT and BPO tasks:
Improved competence
One of the most popular reasons to outsource IT and BPO tasks is to gain access to expert knowledge and experience that in-house employees may not have. A big benefit is that you don’t have to pay for training your IT staff. Outsourced workers already have the skills, knowledge and experience.
Covering risks originating from personnel
Most of the time, you can’t predict when an in-house employee will decide to leave. This could be due to poor relationships with coworkers, excessive workload, family issues, health issues, and other reasons. However, for your business, high employee turnover means additional hiring and recruiting costs. However, with outsourcing, you only hire teams when necessary and don’t risk losing key employees.
More flexibility
When you realize that your business is constantly growing, you will need to increase the number of employees supporting its operation. And increasing internal teams is often time-consuming. Posting job descriptions on various portals, selecting and interviewing candidates, formal recruitment and onboarding can take several weeks. However, with IT outsourcing and BPO experts, you can increase the volume of your workflow almost instantly and with minimal price changes.
