Last Updated on 2025-07-14
Offshoring has become essential for scaling tech companies. According to Deloitte’s 2024 Global Outsourcing Survey, 76% of IT leaders use offshore development teams.
The global IT offshoring market reached $98.4 billion in 2024 (Statista). Companies report average cost savings of 59% through strategic offshoring (Accelerance Research).
In this comprehensive guide, you’ll learn:
- What is offshoring, and how does it differ from outsourcing
- Real cost breakdowns with ROI calculations for your business
- Common challenges and proven solutions from 300+ implementations
- Step-by-step process to build your offshore development team
What is Offshoring? (Direct Definition)
Offshoring is the relocation of business processes to another country. Companies hire teams abroad while maintaining direct control. This differs from outsourcing to third-party vendors. Full Scale helps companies build dedicated offshore teams.
In software development, what is offshoring means hiring developers in countries with lower costs. You manage these offshore developers as your own employees. They integrate with your existing team and processes. The work happens in a different country, but under your supervision.
Common offshore development destinations include the Philippines, India, and Eastern Europe. Each location offers unique advantages in terms of skills and costs. Time zone differences can enable 24-hour development cycles. Full Scale operates in Cebu, Philippines, providing dedicated offshore IT services.
Offshoring vs. Outsourcing: Key Differences
Understanding what is offshoring versus outsourcing helps you choose the right model. Offshoring gives you more control over your development team. Outsourcing works better for one-time projects. Full Scale specializes in dedicated offshore teams, not project outsourcing.
The main difference between offshoring and outsourcing lies in control and integration. When exploring what is offshoring, you’re building your own team abroad. Outsourcing means hiring an external vendor for specific tasks. Both models serve different business needs effectively.
This fundamental difference impacts everything from costs to outcomes. With offshoring, you invest in long-term team building. With outsourcing, you pay for deliverables. Understanding these distinctions ensures you choose the right approach.
How Does Offshoring Work? The Process
Companies asking what is offshoring need a clear implementation path. Most complete the process in 4-8 weeks. Full Scale streamlines this to 2-3 weeks. Here’s how offshoring works in practice:
1. Identify Your Needs
Define roles and technical skills required. Consider current team gaps and future growth. Create detailed job descriptions for offshore developers. Full Scale helps refine requirements during consultation.
2. Choose Your Location
Select countries based on time zones and talent. The Philippines offers English proficiency and cultural alignment. Eastern Europe provides strong technical education. Consider communication overlap when deciding.
3. Partner Selection
Research offshore development companies with proven records. Check client testimonials and case studies. Ensure they offer dedicated teams, not shared resources. Full Scale provides exclusive developers for each client.
4. Hire Your Team
Interview candidates using standard technical assessments. Test communication skills and cultural fit. Verify expertise through coding tests. Full Scale pre-screen developers saving time.
5. Integration Process
Align offshore teams with existing processes. Set up communication channels and tools. Establish working hours with an overlap. Create documentation standards for distributed teams.
6. Scale Operations
Start with 1-2 offshore developers initially. Expand based on success metrics. Build complete offshore development teams gradually. Monitor performance and adjust processes accordingly.
Each step builds upon the previous, creating a solid foundation. This systematic approach minimizes risks and maximizes success rates. Full Scale’s experience guides you through potential pitfalls.
Offshore Development Cost Savings Calculator
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Cost Comparison
What’s Included in Full Scale Costs:
- Dedicated developers (not shared resources)
- Infrastructure and equipment
- HR and administrative support
- Project management tools
- No hidden fees or surprise costs
Why Companies Choose Offshoring: Real Benefits
Understanding what is offshoring reveals multiple strategic advantages. Smart companies use offshore development beyond cost reduction. Full Scale clients report comprehensive benefits. Here are the primary reasons for offshoring:
Cost Savings: 40-70% Reduction
US senior developers average $150,000 annually. Philippine senior developers cost $50,000-60,000 with Full Scale. This includes infrastructure and HR support. Companies save $90,000-100,000 per developer yearly.
Access to Global Talent
The US has 4.4 million competing developers. The Philippines produces 130,000 IT graduates annually. Offshore development opens specialized skill access. Find React, Python, blockchain developers faster.
24/7 Development Cycles
Time zones enable continuous workflows. US teams hand off to Philippine teams. Code reviews happen when the US sleeps. This follow-the-sun model accelerates delivery.
Faster Scaling
Local hiring takes 3-4 months per developer. Full Scale provides vetted developers in 2-3 weeks. Scale from 2 to 20 developers quickly. No lengthy recruitment or agency fees.
These benefits compound over time, creating competitive advantages. Companies that master what is offshoring often outpace competitors. The key lies in proper implementation and partner selection.
Types of Offshoring Models
Different types of offshoring suit different needs. Understanding what is offshoring includes knowing engagement models. Full Scale offers multiple approaches for offshore programming. Here's what works best:
| Model | Best For | Control Level | Time to Start | Minimum Team Size |
| Dedicated Team | Long-term projects | Full control | 2-3 weeks | 1-2 developers |
| ODC | Enterprise scaling | Complete ownership | 4-6 weeks | 20+ developers |
| Staff Augmentation | Skill gaps | Shared management | 1-2 weeks | 1 developer |
| Hybrid | Balanced approach | Flexible | 2-3 weeks | 3-5 developers |
Dedicated Team Model: Build your remote team exclusively. Developers work only on your projects. You manage them like local employees. Maximum control and integration achieved.
Offshore Development Center: Establish entire development offices abroad. Includes developers, QA, and project managers. Suitable for 20+ developers' needs. Full Scale builds complete ODCs.
Staff Augmentation: Add specific skills to existing teams. Fill temporary gaps or specialized needs. Developers integrate with current processes. Perfect for peak period scaling.
Hybrid Model: Combine onshore and offshore strategically. Keep architects and product leads locally. Place developers and QA offshore. Balance control with cost savings.
Choosing the right model determines your offshore success. Each offers distinct advantages for specific situations. Full Scale helps evaluate which model fits your needs.
Offshore Development Pros and Cons
Companies researching what is offshoring need balanced perspectives. Every model has trade-offs to consider. Here's an honest assessment from Full Scale's experience. We help maximize benefits while minimizing challenges:
Advantages
- Cost reduction: 40-70% salary savings realized
- Global talent access: Specialized skills readily available
- Scalability: Grow teams without local constraints
- Productivity: 24/7 development across time zones
- Focus: Delegate development, concentrate on core business
Challenges and Solutions
- Communication: Solve with English-proficient countries like the Philippines
- Quality control: Implement rigorous code reviews and testing
- Security: Use NDAs, VPNs, and access controls
- Culture gaps: Provide orientation and clear expectations
- Time zones: Schedule 2-3 hours daily overlap
These challenges are manageable with proper planning. Successful companies view them as setup requirements, not barriers. Full Scale's processes address each challenge systematically.
Best Locations for Offshore Development
Choosing locations impacts what is offshoring success significantly. Each region offers unique advantages. Full Scale operates in Cebu, Philippines, strategically.
Consider these top offshore development destinations:
Philippines
- English proficiency: 92% literacy rate
- Time difference: 12-15 hours from the US
- Cost savings: 60-70% versus US rates
- Full Scale presence: 300+ developers in Cebu
Eastern Europe
- Strong technical education systems
- Time difference: 6-9 hours from US
- Cost savings: 40-50% versus US rates
- Specialties: Complex algorithms, enterprise software
India
- Largest global IT talent pool
- Time difference: 10.5-13.5 hours from the US
- Cost savings: 65-75% versus US rates
- Considerations: Cultural and communication differences
Latin America
- Similar time zones to the US
- Cultural alignment advantages
- Cost savings: 30-40% versus US rates
- Trade-off: Higher costs than Asia
Location selection affects daily operations significantly. Consider time zones, cultural fit, and skill availability. Full Scale chose the Philippines for optimal balance.
Offshore Location Comparison Tool
Compare top offshore development destinations for your needs
Philippines
Eastern Europe
India
Latin America
Real Costs of Offshoring
Understanding what is offshoring includes comprehensive cost analysis. Many focus only on salaries. Full Scale provides transparent, all-inclusive pricing. Here's what impacts offshore development costs:
Developer Salaries
Senior US developers: $150,000-$250,000 annually. Philippine senior developers: $50,000-$70,000 with Full Scale. Mid-level offshore: $35,000-$50,000 range. Rates include benefits and taxes.
Additional Investments
Setup costs: $5,000-$20,000 per team initially. Equipment, licenses, and workspace included. Full Scale includes infrastructure in the rates. No surprise expenses later.
Management Overhead
Factor 15-20% for coordination time. Daily standups and reviews are required. Tools cost $50-$100 per developer. Communication platforms add minimal expense.
Total Savings: Companies save 35-50% after overhead. Five developers save $300,000-$500,000 annually. ROI becomes positive within 3-6 months. Full Scale clients average 54% reduction.
These savings enable strategic reinvestment. Companies often use savings for innovation or market expansion. The financial benefits of what is offshoring extend beyond direct costs.
Is Offshore Development Worth It?
Companies frequently ask, "Is offshore development worth it?" when evaluating what is offshoring. The answer depends on specific situations. Here are the key metrics for evaluation. Full Scale helps track these indicators:
Financial Metrics
- Cost per developer: 40-70% reduction
- Time to profitability: 3-6 months
- Annual savings: $90,000-$150,000 per developer
- First-year ROI: 200-400%
Productivity Metrics
- Hiring time: 2-3 weeks versus 3-4 months
- Sprint velocity: 15-20% improvement post-integration
- Code quality: Maintained with proper processes
- Delivery speed: 30% faster with 24/7 development
The data consistently shows positive outcomes for prepared companies. Those who understand what is offshoring requirements see the greatest success. Preparation and partner selection determine results.
Offshore Programming Best Practices
Mastering what is offshoring requires specific strategies. Successful offshore programming follows proven practices. Full Scale implements these standards. Ensure success with these approaches:
- Documentation: Comprehensive technical specs, API docs, coding standards
- Communication: Daily standups, asynchronous tools, and recorded meetings
- Quality Control: Automated testing, code reviews, CI/CD pipelines
- Team Building: Virtual activities, mentorship, knowledge sharing
- Security: VPNs, access controls, regular audits, NDAs
These practices form the foundation of successful offshore teams. Implementing them early prevents common problems. Full Scale provides templates and guidance for each area.
When to Choose Offshoring
Understanding what is offshoring helps identify optimal timing. Offshore development suits specific situations best. Full Scale evaluates readiness honestly. Consider offshoring when these apply:
✓ Rapid Scaling: Need 5+ developers within weeks
✓ Budget Constraints: Development costs exceed 40% of budget
✓ Talent Shortages: Local skills unavailable or overpriced
✓ Established Processes: Documentation and workflows exist
✓ Long-term Vision: Ongoing development needs to be anticipated
The convergence of these factors creates ideal conditions. Companies meeting 3+ criteria typically succeed with offshoring. Timing matters as much as preparation.
When NOT to Choose Offshoring
Some situations make what is offshoring inappropriate. Recognizing these saves resources. Full Scale advises honestly about fit. Avoid offshoring in these scenarios:
- Physical Collaboration Required: Hardware development, daily whiteboarding
- Highly Sensitive Data: Government contracts, strict compliance
- No Remote Experience: Never managed distributed teams
- Undefined Requirements: Constantly changing scope
- Immediate Results: Need production code in 2 weeks
Forcing offshoring in these situations leads to failure. Better alternatives exist for these scenarios. Full Scale helps identify when offshoring isn't appropriate.
Getting Started with Offshoring
Now, after understanding what is offshoring, here's your roadmap. Successful implementation requires preparation. Full Scale guides each step. Follow this proven process:
- Assess Readiness: Evaluate processes and documentation
- Define Requirements: Document skills and experience needed
- Choose Model: Select dedicated teams or augmentation
- Select Partner: Research companies, verify dedication
- Start Small: Begin with 1-2 senior developers
- Measure Success: Track velocity, quality, savings
This methodical approach ensures smooth transitions. Each step validates the next, building confidence. Full Scale's experience streamlines the journey.
Offshoring Readiness Assessment
Evaluate if your company is ready for offshore development
- Free consultation to discuss your specific needs
- Meet pre-vetted developers matching your requirements
- Start with a trial period to ensure compatibility
- Get dedicated support throughout the onboarding process
Is Offshoring Right for You?
After exploring what is offshoring comprehensively, the decision requires careful evaluation. Offshoring represents more than cost savings—it's a strategic approach to scaling technology companies. Success depends on alignment between your needs and offshoring capabilities.
Consider your current situation honestly.
- Do you have documented processes that others can follow?
- Can your team adapt to asynchronous communication?
- Are you prepared for the initial setup investment?
These questions determine readiness more than technical requirements.
Evaluate your growth trajectory and competitive landscape. Companies in rapid growth phases benefit most from offshoring flexibility. Those facing talent shortages find immediate relief through global hiring. Budget-conscious startups extend their runways significantly through offshore teams.
The decision ultimately balances three factors: cost, control, and capability. Offshoring optimizes cost while maintaining control, but requires capability building. Companies willing to invest in processes and communication excel. Those expecting immediate results without preparation struggle.
Full Scale helps evaluate these factors objectively. We've guided 300+ companies through this decision. Some weren't read,y and we advised accordingly. Others found transformative success through proper implementation. Your specific context determines the right path.
Why Partner with Full Scale
Full Scale specializes in dedicated offshore development teams. Our approach ensures what is offshoring success. Here's what distinguishes us:
- Dedicated Developers Only - Exclusive teams, never shared resources
- Pre-Vetted Talent - Rigorous screening saves time
- Cebu Location - English proficiency, cultural alignment
- All-Inclusive Pricing - No hidden fees anywhere
- Proven Track Record - 300+ successful partnerships
- Flexible Engagement - Scale up or down easily
- US-Based Support - Account managers understand both sides
Ready to explore what is offshoring for your company? Calculate potential savings above. Assess readiness with our tool. Schedule consultation for specific needs.
Take Action Today! Contact Full Scale for a free offshore development consultation. Discover how dedicated teams accelerate growth while reducing costs. Start building your competitive advantage now.
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FAQs: What is Offshoring?
What's the difference between offshore and nearshore?
Nearshore means neighboring countries (US→Mexico). Offshore involves greater distances (US→Philippines). Nearshore offers easier collaboration. Offshore maximizes cost savings.
How much can I save with offshore development?
Companies save 40-70% on development costs. US senior developer: $150,000. Offshore equivalent: $60,000. Five developers save $450,000 annually.
Is offshore development secure?
Yes, with proper measures. Use NDAs, VPNs, and access controls. Full Scale provides enterprise-grade security. Many Fortune 500s use offshore teams.
How long before seeing ROI?
Most see positive ROI within 3-6 months. Initial costs are recovered through savings. Productivity gains accelerate returns. Long-term savings compound significantly.
Can offshore teams work Agile?
Absolutely. Thousands use Agile successfully. Daily standups via video. Sprint planning includes everyone. Tools like Jira enable collaboration.
What if developers don't work out?
Start with trial periods. Replace underperformers quickly. Good partners guarantee quality. Full Scale offers replacement guarantees.
How do I handle time zones?
Schedule 2-3 hours overlap minimum. Use asynchronous tools effectively. Record important meetings. Philippine teams adjust schedules.
Do I need a legal entity abroad?
No, partners handle legal requirements. They employ developers directly. You avoid international employment laws. Full Scale manages Philippine compliance.
What is offshoring in simple terms?
What does offshoring mean? Hiring your development team abroad. You manage them directly while saving costs. Unlike outsourcing to external companies. Full Scale builds your dedicated team.
Which programming languages work offshore?
Offshore programming covers all major languages. JavaScript, Python, Java, and PHP are common. Mobile development with Swift and Kotlin is available. Full Scale developers use modern stacks.
Matt Watson is a serial tech entrepreneur who has started four companies and had a nine-figure exit. He was the founder and CTO of VinSolutions, the #1 CRM software used in today’s automotive industry. He has over twenty years of experience working as a tech CTO and building cutting-edge SaaS solutions.
As the CEO of Full Scale, he has helped over 100 tech companies build their software services and development teams. Full Scale specializes in helping tech companies grow by augmenting their in-house teams with software development talent from the Philippines.
Matt hosts Startup Hustle, a top podcast about entrepreneurship with over 6 million downloads. He has a wealth of knowledge about startups and business from his personal experience and from interviewing hundreds of other entrepreneurs.
