Developing any viable digital product is a multi-stage and complex process that requires certain resources. It’s necessary to take care of many details, such as creating technical requirements, managing a team, finding the right specialists, etc. In this regard, outsourcing, and especially offshore development, is the optimal solution.

In this article, we’ll discuss how this approach helps delegate part of the heavy duties and get a high-quality product as a result. We’ll also talk about the main types of outsourcing, their advantages, pitfalls, and challenges clients face during cooperation.

What is Offshore Software Development: Essence and Types

Simply put, offshore software development is a project’s partial or full transfer to a third-party vendor. The scale of such cooperation and the approaches to outsourcing service delivery can differ, so let’s discuss this in more detail.

Onshore outsourcing

Onshore outsourcing is transferring a project to a vendor from your geographic region. This approach has many advantages, and the main ones are:

  • absence of language and cultural barriers, therefore more accessible communication;
  • live meetings and communication;
  • one time zone;
  • the ability to control the development process without additional efforts and intermediaries.


Onshore outsourcing can be quite expensive considering prices in the USA, Great Britain and the countries of Western Europe. It happens because of different reasons: the high cost of specific engineering services or even the lack of unemployed talents in the region.

Offshore outsourcing

Offshoring software development involves transferring the project to a team or company located outside of your region. Typically, organizations from the US or Western Europe outsource their projects to companies from Central or Eastern Europe. The advantages of such an approach are:

  • relatively low cost of professional services;
  • high quality of services due to significant competition;
  • flexible approach to cooperation;
  • a large talent pool.


The distance can be different. Accordingly, sometimes companies face a large time zone difference and miscommunication. Such teams can be challenging to control on your own, so it’s necessary to choose a vendor very carefully.

Nearshore outsourcing

It means transferring the project to a vendor from neighboring countries. The advantages are a slight time difference, more accessible communication and easier control.


Price. The services of a vendor from a neighboring country may be as expensive as yours.

Services That Can Be Outsourced

Mobile app development is one of the main services that can be outsourced. It requires teams with specific technical skills and experience, which are not always available in a particular region due to the cost of services or insufficient tech level.

According to Computer Economic research, clients often hire offshore teams to develop finance software, or retail/wholesale distribution and manufacturing applications.

outsourcing frequency by sector

Web development services are also suitable for outsourcing. Offshore teams often deal not only with the development of web products but also with their further maintenance, security control, scaling, updates, etc.

Among other services that can be outsourced, it’s worth mentioning:

  • designs services (UX/UI, UX research, web design, etc.);
  • automation;
  • artificial intelligence and machine learning services;
  • cloud computing (IaaS, SaaS, PaaS, etc.);
  • QA services;
  • cybersecurity services.

In other words, practically any IT service can be outsourced if necessary; you just need to find a suitable vendor.

Benefits of Offshore Development

Offshore software development has many advantages. Let’s talk about the main ones.

Vast Talent Pool and Opportunity to Choose

Offshore development allows you to access a vast talent pool and choose the best option. In this way, you can hire a team of engineers who not only have specific knowledge in the chosen field but also share your business values ​​and vision.

Leobit has extensive experience in software development outsourcing. Our team will be happy to answer all your questions.

Extra Time for Your Core Business Activities

In offshore development, you transfer a large part of the responsibility to the vendor, so you don’t have to spend energy digging into the development process. This way, you get more time for your main business activities and can focus on your own professional goals.

Lower Development Cost

To form a solid in-house development team, you should spend money on recruiting, licensed software and equipment, not to mention salaries, insurance and rent. In this regard, offshore outsourcing is much more profitable because these costs fall on the vendor’s shoulders. In addition, the services of IT specialists from other countries can be cheaper with the same level of professionalism.

More Opportunities for Business Growth

Offshore software development is unlimited access to another company’s resources and qualified specialists, which allows you to open up new opportunities for the growth of your business, capturing new markets and expanding influence.

Besides, in many cases, cooperation with a qualified offshore team allows you to reduce the product’s time to market and ensure its quality.

Offshore Software Development: Main Challenges

Offshore software development is associated with some challenges that are important to be aware of.

Significant Time-Zone Differences

An offshore outsourcing team can work in a radically different time zone. The significant time difference can be challenging, but a professional PM can solve this issue using agile development techniques and proper time management.


Communication is critical in the development of any product. In offshore development, this is a particularly sensitive issue. It is not always possible to maintain transparency with a team in another country, not to mention misunderstandings due to cultural and language differences.

Only proper management (timely reporting, meetings, control) from both sides can help to solve this challenge.


When you choose a vendor, you choose a full-fledged partner. Otherwise, you may face security challenges such as data leakage or loss. Therefore, it is crucial not only to find the best company but also to protect your intellectual property. This can be done with a Non-Disclosure Agreement (NDA).

Quality assurance

The quality of the code and the final development result depends on the experience of the team, its skills, control and structure of the work process, etc. Quality control can be problematic when offshoring, so choosing a vendor requires special attention.

So, determine the quality indicators and requirements with the vendor, clarify under what conditions you are ready to accept the work, etc. This will help guarantee the quality of the final result.

leobit team

Step-To-Step Guide To Offshore Software Development

Let’s go through the main steps to offshore software development.

Step 1. Research Your Target Audience

The success of any software depends on end-user satisfaction and experience. And the sooner you’ll research the target audience, the better.

The TA determines the product’s value, features, interface, etc. Defining the target audience helps give specific instructions to your vendor and expect a particular result from the outsource development team.

Step 2. Pay Attention to Regulations

Most likely, you plan to bring your product to your country’s market, which means you must take care of all the requirements and regulations. It is worth defining their list and sharing it with developers in the first stages of cooperation.

Step 3. Identify Business Needs and Goals

Business analytics transform business needs into specific requirements during the development process; it helps determine the course and scope of work. These are the principal identifiers of progress and quality metrics.

So determining precise needs and goals is integral to developing any product. You can read more about this here.

Step 4. Choose the Best Offshore Development Vendor

After defining business goals, needs and regulations, you can choose a suitable vendor. Be sure to pay attention not only to the cost of services but also to the following criteria:

  • the technical level of the team;
  • necessary skills to develop your product;
  • communication transparency and flexibility;
  • terms of cooperation;
  • time zone.

Before hiring an offshore vendor, you should determine whether it can meet your requirements and ensure the safety and quality of the product.

Why should you choose Leobit for offshore development outsourcing?

We have vast experience in offshore cooperation with clients from the USA and Europe. Over these seven years, we’ve built an optimal strategy for outsourcing software development and a system of working on projects of various complexity. Our clients can use the services of engineers, software architects, designers, etc., as well as get a strong and well-functioning team at their disposal.

We work with various technologies – C#, .NET, Ruby, Flutter, Angular, etc. We also provide a wide range of services, so each client receives an individual approach. Our projects and customer reviews can tell you more about us and our experience; you can find them here.

Final words

Software development outsourcing can be a profitable and effective solution. There are three different types of outsourcing, offshore, onshore and nearshore; they all have their own advantages and pitfalls.

In general, offshore software development allows you to access a large pool of talent, open up new facets of user experience, and free up time for other needs. And although it has its challenges, they can be solved easily with the right approach.

We have extensive experience in this field, so we will be happy to answer any questions and advise you about offshore development. Feel free to contact us in any convenient way.