In today’s digital landscape, where businesses strive to stay ahead of their competitors, offshore software development has gained significant momentum. In offshore development, companies outsource talented IT teams from other countries to develop custom solutions for their specific project requirements.
This cooperation facilitates a wide range of services such as mobile application development, web design and development, UI/UX design, DevOps methodology integration, Cloud, and other software development services. Offshore development service is an incredible way for businesses to outsource highly skilled professionals from emerging technology countries.
With a growing number of companies looking to outsource their IT service needs, the demand for offshore software development is expected to grow in 2024.
Considerable Factors Affecting the Offshore Software Development Cost
Offshore software development includes some unexpected extra fees, making it integral for companies to comprehend the cost breakdown before partnering with an offshore development team and achieving the desired result.
Let’s discover the factors contributing to offshore software development costs in 2024.
Geographical Location
The outsourcing location of your offshore development team is one of the most significant factors affecting the total cost of your custom project requirements. For instance, the hourly rates of software development services in China, Ukraine, India, and other popular countries are significantly lower than the developed nations like US, Australia, and Europe.
Let’s understand the hourly rate of developers in the different regions through a quick chart:
| Region | Countries | Cost |
| Eastern Europe | Hungary, Poland, Slovakia, Bulgaria, Czech Republic, Romania, Belarus, Ukraine | $25–199 |
| Western Europe | UK, Netherlands, Belgium, Norway, France, Germany, Ireland | $150–$400 |
| North America | Canada, US | $100–$450 |
| East and South Asia | China, Philippines, Indonesia, Vietnam, Malaysia, Japan, India | $10–$350 |
| Africa | Morocco, Egypt, Kenya, Nigeria, Ethiopia | $10–$99 |
| South America | Mexico, Argentina, Panama, Brazil | $20 – $ 55 |
| Australia | Australia | $100–$350 |
While the hourly rate of offshore developers is a prime factor affecting the overall offshore development cost, it is not the sole determinant you should look for when choosing the location of your offshore partner. Other factors such as time zone differences, language barriers, and regulatory frameworks are vital considerations when partnering with an offshore development company and deciding on the cost parameter.
Project Size
The size and complexity of your project also influence the development cost. The more numbers of features you want to integrate into your project, the higher it will cost you and the more time and resources it will require to complete. For instance, more complex projects with multiple functionalities and integrations, such as API connections, payment gateway, data migrations, etc., will require more specialized efforts and expertise, leading to higher time and hourly rates.
Technical Expertise
Another crucial component affecting your project’s development cost is the skillset and technical expertise. Developers with specialized skillsets and technical knowledge, such as those in blockchain, artificial intelligence, machine learning, metaverse, or cybersecurity, are in high demand. Accordingly, their hourly rates are also higher.
However, outsourcing developers with specialized skill sets can complete the project faster and with greater accuracy, significantly reducing costs in the long run. For instance, to build a dApp or custom solution for your insurance and financial firm, outsource a fintech software development company with expertise in blockchain or a respective field. Ultimately, the cost of offshore software development relies on the scope of the software you are looking to build.
Delivery Time
The timeframe you decide to build and bring your project to the market also impacts the development cost. For instance, if you have a complex project to build but the deadline to develop and deploy it is shorter, it will significantly affect the overall research, planning, execution, and development process. If so, you will need a large team of IT professionals to get things done faster and more efficiently, which leads to higher costs.
Quality Assurance and Testing
Quality assurance and testing are crucial phases to ensure the project’s success before launching your product to the market. The hourly rate of an offshore development company focusing on this phase is higher than those that skip this point and just build the product as their end goal. Outsourcing a comprehensive offshore development service with a quality assurance and testing strategy can cost you higher, but it will prevent costly bugs and errors in the long run, leading to saving recurring costs.
Final Thought
There are many components that will affect the overall offshore software development costs in 2024. Thereby, comprehending these factors and their impact on cost is crucial for companies, which helps them make informed decisions when outsourcing an offshore partner. It not only enables them to save costs but also ensures the success of their project.
While understanding the offshore software development cost-affecting factors mentioned in this guide is a good place to start, you should always remember that the exact cost will differ when you hire full-time developers. On average offshore development costs will range between $4 and $20 per hour, depending on the abovementioned factors.
