Is your in-house team lacking the expertise to develop your application? Are you finding it increasingly expensive to hire and maintain in-house talent for building high-quality software? In today’s highly competitive world, businesses are constantly looking for ways to grow, stay ahead of the curve, and adapt to ever-changing market demands. Digital systems and software solutions play a key role in supporting these goals. Still, finding the right people at the right price can be a challenge.
If this sounds like where you are right now, you’re not alone. An Offshore Development Center (ODC) can help by offering cost-efficiency and access to a skilled talent pool abroad.
At Mallow, we’ve spent over 14 years helping businesses of all sizes build scalable, future-ready applications. As a trusted offshore development company, we focus on creating software that fits your goals and grows with your business. Our cost-effective and reliable development approach has helped clients strengthen data security, build user trust, and achieve consistent business growth.
By the end of this article, you’ll have a clear understanding of what an Offshore Development Center (ODC) is, how it can benefit your business, and how to find one that suits your specific needs. We’ll also explore common challenges associated with ODCs and share practical strategies to help you navigate them effectively, so you can make informed decisions with confidence.
What is an offshore development center?
An Offshore Development Center (ODC) is a software development center located in a different country from the hiring company’s location.
Companies seek ODCs to outsource their software development as a cost-effective solution, aiming to reduce development costs, access specialized expertise, and speed up time-to-market.
An ODC provides the necessary infrastructure and resource management to ensure good working conditions for the team and smooth operational processes. The offshore software development market is projected to reach $151.9 billion in 2025 and is expected to grow further, with estimates of up to $283 billion by 2031 and $389.7 billion by 2033
For example, if you’re a company based in the USA, you can outsource your software development to a service provider that runs an Offshore Development Center (ODC) in a country like India. This way, you get access to affordable and skilled developers, good infrastructure, and experienced management, without having to set up your own team. It helps you save on costs, speed up your project delivery, and easily access the right expertise.
Key features of ODC:
- An ODC is set up to support ongoing development, whether it’s for maintaining an existing product or continuously evolving it over time.
- The ODC provides the necessary office infrastructure, tools, and technology to support the development process and ensure efficient operations.
- You can easily adjust the size of your development team or change the scope of work as your business needs shift or grow.
- Everything about the ODC, from the team setup to security measures and project management, is customized to match your specific requirements and preferences.
- The team works exclusively on your projects, which helps increase their engagement and commitment.
What is the team structure of an offshore development team?
When partnering with an offshore development centre (ODC), the success of your project heavily relies on having the right team structure in place. A typical offshore development team consists of developers, business analysts, quality analysts, UI/UX designers, project managers, DevOps engineers, and sometimes support analysts and database administrators. But, the exact team composition and size vary based on your project’s specific requirements, its complexity, and the expected delivery timeline.
Companies assess the scope of their application and determine how many squads are necessary to handle the workload effectively. Each squad usually comprises 5–12 specialists, working collaboratively across different layers of the application. An ODC also offers strategic guidance on how to structure these squads based on the application’s technical needs, expected scale, and deployment goals.
The following table outlines the responsibilities associated with each role
| Roles | Responsibilities |
|---|---|
| Project Manager |
|
| Business Analyst |
|
| Technical Manager |
|
| Designer |
|
| Back-end developer(s) |
|
| Front-end developer(s) |
|
| DevOps |
|
| Database Administrator |
|
| Quality Analyst |
|
| Support Analyst |
|
The correlation between the number of team members and tasks should be proportionate to ensure efficient completion. Your decision regarding team size and structure significantly influences the overall application development cost. Hence, careful planning and task allocation are crucial for optimal results.
Provided below is a table offering a rough framework for determining an appropriate team size aligned with the various types of tasks commonly addressed by development teams.
| Size of the team and capabilities | A Developer | 2-3 Developers | Squad – Includes 5-12 members | Multiple Squads |
| Minimal requirement (MVP) | ✔ | ✔ | Not Required | Not Required |
| Handling basic project complexities | ✔ | ✔ | Not Required | Not Required |
| Handling both frontend and backend dependencies | ✔ | ✔ | Not Required | Not Required |
| General maintenance-related works of an application (tasks like version upgrades, issue fixing, regular performance monitoring, managing third-party services) | ✔ | ✔ | Not Required | Not Required |
| Implementing multiple features and integrations simultaneously | ✖ | ✔ | ✔ | Not Required |
| Maintenance of an application with medium-level complexity in features and architecture | ✖ | ✔ | ✔ | Not Required |
| Maintenance of an application with high-level complexity in features and architecture | ✖ | ✖ | ✔ | ✔ |
| Sharp Deadlines/Short- spanned deployments | ✖ | ✖ | ✔ | ✔ |
| Working on multiple tech stacks simultaneously | ✖ | ✖ | Sometimes not enough | ✔ |
| Carrying multiple modules in an enterprise-level application | ✖ | ✖ | ✖ | ✔ |
| Handling applications demanding multiple and complex integrations | ✖ | ✖ | ✖ | ✔ |
| Handling enterprise-level systems which involve microservices and serverless architectures | ✖ | ✖ | ✖ | ✔ |
What are the benefits of an offshore development center?
Access to the global talent pool
From an ODC, you can access a larger pool of skilled offshore talent who may not be available at your location. This allows you to hire developers with the right expertise and skills quicker, helping you launch your application to the market faster.
An ODC also allows you to get the talent you need more quickly and tap into expertise in emerging technologies, so you can find the right talent at the right time. The ODC partner supplies vetted professionals with the required skills, knowledge, talent, and business processes for the project at hand. They ensure that the offshore team follows international standards and has the capability to produce quality work.
Scalability
One of the biggest advantages of an Offshore Development Center is the flexibility to scale resources up or down as needed.
For example, if you need additional resources to accelerate the completion of your application development project, an ODC can quickly provide the necessary talent without the lengthy hiring process. On the other hand, if the project is almost complete or certain resources are no longer needed, an ODC can easily scale down the team to help reduce costs. This flexibility allows companies to save time and money, ensuring they remain agile in responding to market changes and shifting project demands.
Focus on core competencies
When you outsource your software development to an ODC, your in-house team can focus fully on your core business activities because the service provider takes care of the entire development process.
You won’t have to waste time on hiring, onboarding, or training new employees. Instead, you simply communicate your requirements to the service provider, and they will take care of everything, allowing you to stay focused on moving your business forward.
Enhanced risk mitigation and security
An Offshore Development Center (ODC) helps you manage risks and strengthen security by operating in a controlled, secure environment. The service provider takes care of setting up secure infrastructure, following strict data protection policies, and ensuring everything meets international standards. You can feel confident that your sensitive information and business processes are safe throughout the project.
This offshore development center also gives you greater control over security and risk management protocols and practices. ODCs follow the best practices not only in security but also in delivering quality and reliability in your software development. They usually cover all necessary policies and processes and are ready to establish and follow any risk management protocols in line with your company’s requirements.
Cost savings
If you outsource software development services to an offshore development center, you benefit from improved productivity, access tech talent at lower prices, and avoid any infrastructure costs. You also cut down on the expenses of hiring in-house expertise without compromising on quality.
For example, if you are based in the USA and partner with an offshore development center like one in India, the total cost for software development would be only half compared to maintaining an in-house team in the US, mainly due to the lower cost of living, which results in reduced labor and infrastructure costs.
How to find an Offshore Development Center(ODC)
Step 1 - Set clear project requirements
The first step is to finalise your project requirements. Take the time to clearly define what you want to achieve, pinpoint the challenges your organisation is currently facing, and set a clear goal for the project.
Once you have that foundation, move on outlining the project’s scope, setting a budget, and establishing a deadline. Finally, determine what kind of technology and expertise will be needed to successfully develop your application.
Step 2 - Select the best ODC location to handle your project
Choosing the location for your offshore development center is a crucial step. When selecting a location, you should consider factors such as labour costs, the quality of expertise available, time zone differences, and political and economic stability.
Time zone differences are particularly important, as they directly impact communication and collaboration with your team. Another major factor is the cost and level of expertise in the chosen region, which can significantly affect your overall development costs.
Step 3 - Shortlist offshore software development centers aligned with your needs
After defining your project requirements and selecting the location for your ODC, the next step is to evaluate and choose the best offshore development center to build your application.
Start by conducting thorough research online. Look into company ratings, the range of services they offer, and client reviews on platforms like Clutch and DesignRush. Shortlist around 5 to 10 companies that seem like a good fit for your needs. This will give you a strong set of options to compare in terms of expertise, communication, pricing, and past experience. Taking the time to carefully evaluate these providers will help you find a partner who truly aligns with your project goals.
Step 4 - Evaluate the ODC's technical and operational capabilities
Among the companies you’ve shortlisted, start by reviewing their websites to get a sense of the services they offer, their technology stack, and their portfolio. Looking through their previous work can help you understand the types of projects they’ve handled, while reading client reviews gives you an idea of their reputation.
By looking at their services and technology stack, you can see if they have the skills and resources to meet your app’s needs at reasonable prices. It’s also a good idea to check for any certifications or industry awards that show their expertise and trustworthiness.
Step 5 - Review vendors’ management practices and data protection policies
It’s important to understand the data protection practices and policies of the offshore development center. Ensure you have a clear understanding of their communication channels, project management approaches, and how they handle data security.
You should also verify that your offshore development partner complies with data protection laws and has strong security measures in place. This includes implementing access control policies, such as two-factor authentication, password expiration, and role-based access, to ensure only authorized personnel can access sensitive data and also ensure they maintain compliance with relevant regulations, such as GDPR, HIPAA, or CCPA, based on the type of data being processed.
Step 6 - Consider costs and contract terms
Finally, review the cost structure and contract terms to ensure the pricing aligns with your budget. Be sure to confirm the engagement model, as pricing can vary depending on the model you choose for your application development. Also, ask about any potential hidden costs, such as third-party integration fees, maintenance, and update costs, to avoid any unexpected surprises.
Next, review the contract terms, including intellectual property (IP) rights and confidentiality agreements. Make sure you have a clear understanding of your contractual obligations.
Challenges and mitigations of working with an offshore development center
Though an Offshore Development Center offers numerous benefits, it also presents challenges such as time zone differences, communication barriers, varying work styles due to cultural differences, security risks, and quality assurance concerns. mismatches in team members’ skill sets. But, with the right strategies in place, you can overcome these challenges.
Working in different timezones & communication barriers
Effective communication can be challenging when working with an ODC due to time zone differences, often leading to delays. These delays can impact decision making and make it harder to get timely clarifications on project requirements, which may cause misunderstandings and affect the overall project timeline.
Strategies to mitigate different timezones & communication barriers
- Utilizing communication and management tools like Zoom, Teams, Slack, and email helps facilitate smoother collaboration. These tools allow team members to communicate and share updates without being limited by different working hours.
- Establishing clear communication protocols is also essential, including documenting key decisions, project updates, and action items in a centralized system, so team members in different time zones can catch up efficiently.
Work style misalignment due to cultural differences
Work style expectations can vary significantly across cultures, especially in areas like decision-making approaches, attitudes toward hierarchy, flexibility with deadlines, and preferred levels of supervision or independence. These differences can lead to misalignment in collaboration and productivity. Building cultural awareness across both in-house and offshore teams is essential to bridging these gaps and fostering effective, respectful teamwork.
How to overcome work style misalignment due to cultural differences effectively
- By educating both teams about each other’s cultural norms and working styles, you help build mutual respect and understanding.
- Set up regular feedback sessions to openly discuss what’s working well and where adjustments might be needed.
- Also, plan meetings and deadlines with consideration for local working hours, national holidays, and cultural norms around time off.
Security concerns and IP rights protection
When partnering with an Offshore Development Center (ODC), quality assurance often emerges as a critical concern. Businesses may worry whether the ODC team follows rigorous QA processes or if there’s sufficient alignment on quality standards. Without proper coordination, there’s a risk of inconsistent deliverables, limited test coverage, or overlooked bugs that affect the stability and user experience of the final application.
Ways to manage security risks and protect Intellectual Property
- Completely assess the ODC’s previous work, focusing on how they handle data security. Look into their best practices, secure coding standards, and proper validation of user inputs.
- Implement a strict data protection policy for sharing data, and draw up and sign non-disclosure agreements, adding intellectual property clauses to contracts.
- Ensure that developers have experience implementing data encryption mechanisms, including encrypting sensitive data both in transit and at rest to safeguard it from unauthorized access.
- Regularly audit the codebase for any third-party dependencies and assess their security posture. Make sure they follow best practices when integrating external libraries and validate their security credentials.
Misalignment of quality assurance with expectations
When working with an Offshore Development Center (ODC), quality assurance is one of the major concerns for many businesses. If there isn’t a clear process in place to check the quality at every stage, there’s a chance that the final product might not meet expectations. Without proper testing in the ODC team, issues like bugs, performance issues, or a poor user experience can affect the success of the application. If the team doesn’t follow a structured quality process, even small problems can turn into bigger issues after launch.
Ways to address the misalignment of quality assurance with expectations
- Set clear coding standards and performance metrics, ensuring all team members understand quality expectations. Regular reviews help to catch issues early and maintain consistent quality.
- Implement unit, integration, system, and user acceptance testing throughout the project. This ensures any issues are identified and addressed before release.
- Promote continuous communication and regular check-ins between the development and QA teams. This helps to resolve issues in real-time and ensures alignment across all stages.
- Use automated testing tools to speed up the testing process and ensure consistent results across environments. This reduces manual errors and accelerates overall development.
Collaborate closely with the ODC’s QA team to align on quality goals and testing protocols. This ensures the final product meets expectations without compromising on standards.
Why India is one of the most commonly preferred location for Offshore development center?
According to Statista, India’s information technology and business process management industry was estimated to have over 5.8 million employees in the financial year 2025. In addition to this vast talent pool, India offers significantly lower labor costs compared to developed countries, helping businesses reduce their development expenses. These advantages make India a leading destination for companies looking to set up Offshore Development Centers (ODCs).
Partnering with an Indian ODC offers a unique advantage due to its highly skilled workforce proficient in the latest technologies, ensuring both quality and timely delivery. India’s ability to adapt to various work cultures and time zones makes it an ideal partner for overcoming common ODC challenges. With a strong focus on transparency, communication, and IP protection, Indian development teams are well-equipped to address both technical and operational concerns. To gain further insights into overcoming potential risks, you can explore how to address common fears in our article on overcoming the biggest fears of decision-makers when outsourcing to India.
India is one of the most commonly preferred location for Offshore development center because of the mentioned reasons:
Pool of skilled developers: India offers a vast talent pool with strong expertise in software development and digital technologies, backed by good English proficiency for smooth global collaboration.
Cost-efficient development: Lower labor costs help reduce development and operational expenses without compromising quality, enabling better budget control.
Technological innovation: India is at the forefront of emerging tech like AI, machine learning, cloud computing, and blockchain. Offshore teams here deliver forward-thinking, innovative solutions that drive digital transformation for global clients.
Cultural fit and collaboration: India’s work culture values teamwork, adaptability, and a strong customer-first approach. This mindset helps build long-term trust and ensures smoother collaboration with international teams.
Strong technical infrastructure: India’s advanced tech parks, data centers, and strong connectivity enable secure development, smooth collaboration, and scalable team productivity.
High quality standards: Indian IT firms follow international standards like ISO, with a strong focus on testing and quality assurance. This commitment helps ensure consistent, reliable results that meet global expectations.
Best practices for partnering with an ODC provider
✅ Define clear project goals and scope from the start. Lay a strong foundation by outlining business challenges, technical requirements, timelines, and budget expectations before starting collaboration.
✅ Choose the right ODC location strategically. Consider factors like cost, technical expertise, time zone alignment, and political/economic stability when selecting your offshore destination.
✅ Vet offshore partners thoroughly. Evaluate ODC vendors based on their technology stack, past experience, client reviews, and case studies to ensure alignment with your needs.
✅ Establish structured communication protocols. Use tools like Slack, Teams, or Zoom and maintain detailed documentation of project updates, decisions, and action items to minimize delays and confusion across time zones.
✅ Align on data security and IP protection. Ensure your ODC complies with data protection laws (GDPR, HIPAA, etc.), and implement NDAs, secure infrastructure, role-based access controls, and encryption protocols.
✅ Utilise scalable resource models. Take advantage of the flexibility to scale your team size based on project demands to stay agile and cost-efficient.
✅ Set quality and delivery benchmarks. Define KPIs and SLAs around development velocity, code quality, testing coverage, and turnaround time to hold the team accountable.
✅ Monitor third-party dependencies and integrations. Regularly audit libraries and APIs used in the project for security, reliability, and licensing issues.
✅ Plan for regular feedback and reviews. Hold sprint reviews and feedback sessions to identify improvement areas and keep collaboration healthy and adaptive.
How to choose the right app development company?
By now, you have a clear understanding of what an Offshore Development Center (ODC) is, how it can benefit your business, and how to choose the right one based on your specific needs. With this knowledge, you’re better equipped to make decisions that support your business goals and long-term growth.
The next thing you might be wondering is how to find the right software development company for your application. Choosing a development team isn’t just a technical choice, it’s about partnering with someone who understands your vision, aligns with your business goals, and can deliver with both skill and reliability.
To make your search easier, check out our article on the Top 10 Software IT Development Companies in 2025. We’ve curated this list based on important factors like hourly rates, Clutch reviews, company size, technical expertise, industry focus, project size and years of experience. With these insights, you’ll be better prepared to make informed decisions and find the right partner for your project.
Still unsure about your next step? Feel free to get in touch with our team.
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