How can you calculate the cost of offshore software development?

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Joined: Thu 24 Sep 2020 10:42 am

According to Deloitte, 70% of organisations name cost reduction as one of the top reasons for offshoring.

However, estimating the amount of money or resources you’ll need to allocate can be tricky when not working with an expert partner. If you collaborate with a subpar offshore company, you may encounter hidden fees (and low-quality services).

What seemed to be a fantastic business opportunity can become an unpleasant experience. We’ve heard this first-hand from tech leaders and after building 70+ dedicated offshore teams for businesses in multiple industries.

To avoid such situations and have the ability to calculate the cost of offshoring, you need to take multiple factors into account.

Before you try calculating offshoring costs…

Before you even talk to some of the best offshore development companies, make sure you have a clear idea of your needs. It will:
  • Make it easier for an offshore company to understand what should be delivered.
  • Help your service provider to give a more accurate estimate of offshore software development costs.
  • Allow you to identify technical support and bug fixes, among other tasks, which are extra services incurring additional costs.
Even with the additional costs, offshoring is generally more cost-efficient than hiring an in-house development team. That’s because you not only save on the developer’s salary but also on hiring, benefits, social security contributions, and overheads.

And, the talent overseas is often more abundant than at home.

But a word of warning: the cheapest upfront options are often those with the greatest hidden costs and lowest quality developers.

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