Not all software teams are equal. Some are highly productive powerhouses delivering tangible value to customers, while others struggle to do work to spec. And that’s if you’ve managed to find the right skills in the first place.
With talent shortages in every Western nation and traditional outsourcing failing to deliver high-quality work, more and more companies are looking for an alternative solution that brings the best of both worlds.
Enter offshore dedicated development teams.
This unique approach not only solves the problems of the other approaches but also offers significant advantages over both previously mentioned methods. Instead of the short-term, project-based approach of the past, this is a long-term, product-based approach. Rather than commissioning a team to produce some work, you get a team that works for you and alongside you.
The results? Far greater value is added to the company. But that’s not the only advantage.
It’s the approach we’ve adopted at The Scalers since we were founded. And it’s helped more than 30 partners build, run, and scale development centres in Bangalore, India. From small remote team extensions to massive ODC teams covering a wide range of skills and disciplines.
Keep reading to find out why this approach blasts the others out of the water.
Less Expensive
India comes 138 out of 140 countries in the cost of living index. Why does that matter? Well, it means salaries, office space and running costs are far lower not just in developed nations, but also in other offshoring locations. For example, The average hourly rate for a developer is
- €46 in the US
- €37 in Latin America
- €32 In Eastern Europe
- But in India, it’s only €28.
That’s a significant saving that adds up.
Under these favourable conditions, you can either build a software development team of the same size but with far lower overheads, or build a far greater team for the same cost. In reality, most companies choose the middle ground: reducing overheads and expanding their offshore development centre at the same moment.
Win, win.
With this model — the same we’ve adopted at The Scalers — companies can build an ODC team which can scale faster due to higher retention rates and competitive salaries that attract top developers. And they still see a reduction in their dev team budgets. When you put it all together, it means you can hire faster and grow faster.
Wide Pool of Talent
The developed world is facing a crisis of talent. The digitalisation of every industry combined with the growth of the technology sector and new technologies emerging every day have all contributed to a doubling in demand for software engineers since 2020 according to Hired. And the U.S. Bureau of Labour expects a further 26% increase in this role by 2030.
This exponential increase in demand for software development skills isn’t the only reason. Demographic shifts combined with poor education have increased the gap between supply and demand. Not so with India.
India is booming and investing heavily in STEM education. In January 2023, India passed China as the most populous country in the world with over 1.4 billion citizens. Each year, India produces 2.7 million STEM graduates and Bangalore alone has over 1 million software engineers. It’s why 80% of global tech giants have IT hubs across the country.
What does that all mean? Well, by building an offshore development centre in Bangalore, you can find an abundance of highly skilled experts in the latest technologies. And that brings additional benefits.
The Highest Quality of Service
If you want top-quality service, you need great developers. The easiest way to achieve that is with an offshore team in India.
When you build a team in a Western or one with a smaller talent pool, you’re stuck competing with hundreds of companies for a few developers. That means you can’t be fussy over who you hire. You might have to compromise on technical or soft skills to fill much-needed roles. Either way, you’re going to have a lower quality of service where you have to fix developer errors or struggle with poor communication.
But when you build a dedicated team in the talent oasis of India, you get your pick from the best of the best. And that’s not just their knowledge, it’s their personality fit too. English is one of the official languages in India with the country scoring 526 in the EF English proficiency index. Plus due to the large number of global multinationals that have software development hubs in cities like Mumbai, Hyderabad, and Bangalore.
Unfortunately, not everyone adopts this approach. Low-quality outsourcing providers operate on different models that focus on the lowest prices with service quality as an afterthought. It’s a shame as not only do Western partners suffer but they vilify even high-value dedicated team providers. And the differences between outsourcing and offshoring don’t stop there.
Superior Team Management
Unlike Outsourcing, offshoring gives you the best team management possible. Yes, even better than managing things in-house.
Your offshore partner will take care of all the headaches on the ground, from setting up to regular payroll and ongoing engagement, while you keep full control of your team. You set the tasks, and you can monitor the progress, but the on-the-ground team tackle the conditions of the office, looking after employee welfare and providing regular engagement.
It all adds up to free managers and executives to focus on activities that drive value, while employees are happier and more productive. In contrast, managers of local teams often have to get involved in the day-to-day due to their proximity and lack of support.
Meanwhile, outsourcing teams are shrouded in mystery. If you’re lucky, you have a good project manager who manages the team, but without any visibility into what is going on. This often leads to work that doesn’t match your goals or it produces delays for revisions. This is a major reason for outsourcing bad reputation.
Conclusion
While there are many ways you could build a development team, building a dedicated team in India has clear advantages. Thanks to the lower overheads and vast talent pool, it’s the cost-optimal approach to build and scale your software operation. There’s simply no other way to find the technical know-how companies across the globe are crying out for without blowing your budget.
Plus, unlike outsourcing, a dedicated team means you keep the same security, visibility and control over your work that you have with an in-house team. So you’ll never have to work that doesn’t meet requirements again as you have full ownership.
At The Scalers, we’ve helped build over 70 dedicated teams in Bangalore, the Silicon Valley of India. Some are 5-person team extensions while others are 150+ R&D centres, driving the latest innovations. In every case, they have helped drive growth for our partners. If you’d like your own team, and all the advantages mentioned in this article, get in touch.