日本語
"I'm worried about making a mistake in choosing a company and causing trouble because this is my first time requesting it."
This article will clearly explain how to choose an offshore development company for such people.
If your company does not have an offshore base, selecting a partner offshore development company is one of the key steps in ensuring project success.
This article introduces the specific steps for selecting an offshore development company, the key points to consider, and the characteristics of offshore development countries.
Akira Shimazoe
CEO of Solashi Japan LLC. Engaged in the development and operation of internal systems at Suntory. Founded Yper Inc., serving as CTO and CPO, contributing to product launch and growth.
4 Steps to Selecting an Offshore Development Company
The main flow for selecting an offshore development company is as follows:
- Organizing the request details
- Researching offshore development countries and companies
- Comparing and evaluating estimates from multiple companies
- Signing a contract with the selected company
Organizing the Request Details
First, clarify the purpose and goals of the offshore development project and organize the details of the request.
Clearly define the role of the system or application you want to develop and what business objectives you want to set.
To ensure the project proceeds smoothly, it's important to decide on the details from the start. At least the following items should be decided before selecting the outsourcing partner:
- Type of system to be developed
- Budget
- Schedule
- Quality standards
To check the IT investment budget, you can refer to "Offshore Development Costs: Country-Specific Pricing and Cost-Cutting Methods."
Researching Offshore Development Countries and Companies
Research the countries and companies that can handle offshore development.
Based on the request details you've decided, create a list of countries and companies that meet your company's criteria.
If you have no particular preferences, it's a good idea to compare and evaluate among major countries. The detailed features of each development country will be explained later, so please refer to that as well.
As for finding specific companies, you can search online for companies using keywords related to your request, or you can utilize offshore development matching platforms.
Related article: "Latest Trends in Offshore Development and Rankings of Popular Countries!"
Comparing and Evaluating Estimates from Multiple Companies
Request estimates from the companies you've listed.
Rather than narrowing down to just one company, request estimates from multiple companies simultaneously and compare the prices and details.
Start by having discussions with 3 to 4 companies, and if none of them meet your criteria, you can consider other companies as well.
Details on how to choose a company will be explained later, but primarily focus on the following points:
【Comparison Points】
- Development costs
- Company size
- Experience
- Proposals
- Technical skills
- Language support (Japanese, English)
- Project management system
- Contract terms
It is recommended to list the above points in an Excel or spreadsheet, as it will make it easier to compare when sharing within the company.
Signing a Contract with the Selected Company
After comparing and evaluating, narrow down to the one company that best suits your needs.
Before signing the contract, finalize the scope of the request, delivery date, quality assurance, and payment terms.
If there are any unclear points, make sure to confirm them before the contract to avoid any potential issues.
Additionally, there are two main contract types in offshore development: Fixed-price and Lab-based contracts.
With a fixed-price contract, deliverables are handed over according to the predetermined requirements, order content, and delivery date, so no additional tasks are typically required after the order is placed.
This type of contract does not require allocating internal resources but be aware that specification changes after the order will incur additional costs.
On the other hand, a lab-based contract involves a contract for a fixed period or man-months.
This type allows for the use of services at a fixed monthly cost, with flexibility to adjust resources within the agreed work period. This is beneficial when you need to adjust resources according to changing circumstances.
You can secure talented IT professionals for a set period and progress with medium to long-term projects.
Specification changes after the order are possible, but expect to handle tasks such as refining specifications or adjusting schedules during the contract period.
Understand the characteristics of each type and choose the contract that suits your company's needs based on the request details and situation.
6 Key Points to Choose an Offshore Development Company
We will explain 6 key points to consider when choosing an offshore development company.
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- Track Record
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- Expertise and Technical Level
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- Japanese Communication Skills
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- Quality Management System
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- Recovery System in Case of Trouble
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- Proposal Ability
Track Record
Check the track record of the offshore development companies you're considering.
Instead of just looking at the number of orders, it's recommended to check if they have similar experience to your project, or if they have worked in your industry or sector.
Additionally, some information may not be available on the company's website, so if you have concerns, make sure to ask during negotiations to obtain accurate information.
It's recommended to have a system development expert from your company attend the negotiations.
By asking questions like "Can you show me the code for this part?" or "How did you create the program for this case?", you can assess the offshore development company's level, expertise, and compatibility with your company.
Expertise and Technical Level
Each offshore development company has different areas of expertise and technical levels, so evaluate their compatibility with your company's needs based on the project requirements.
Offshore development can encompass many fields such as website and app development, AI, IoT, and more.
Also, some companies may excel in UI/UX design or IT consulting and strategic planning, while others may have different strengths.
Researching which areas they specialize in and what technologies they use can help you assess how well they match your company's needs. It’s also a good idea to check the development languages and frameworks they use.
Japanese Communication Skills
Check the offshore development company's Japanese communication skills as well.
Some offshore development companies may work in English or their local language. If you're not comfortable communicating in other languages, it’s ideal to assign a Japanese-speaking project manager (PM) or a bridge SE who is fluent in Japanese.
Be cautious if they advertise "Japanese-speaking system development" but only have a Japanese-speaking contact person as a liaison.
Even if they are comfortable with general Japanese conversation, sometimes communication becomes difficult when discussing system-specific issues.
If possible, try to have the project leader participate in the discussions during the negotiations to see if verbal communication flows smoothly. Also, check if email and chat communications are effective and confirm their practical communication skills.
At Solashi Co., Ltd in Vietnam, the customer liaison language is 100% in Japanese.
Our Japanese-speaking PMs and bridge SEs, who have extensive experience working with Japanese clients, ensure smooth negotiations and consultations without language barriers.
Quality Management System
Also check how the offshore development company manages quality control.
Neglecting quality management can lead to bugs and errors, which may result in serious project damage.
In offshore development, unclear requirements or communication breakdowns can lead to poor quality deliverables.
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- Do they set clear quality goals?
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- Do they have QA engineers involved in the testing process?
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- Do they have measures in place for communication breakdowns?
Check if they have a robust quality management system in place by looking at the above points.
Recovery System in Case of Trouble
It’s important to know how the company handles issues such as bugs or other problems when they arise.
Make sure to confirm whether the recovery and problem-solving costs are included in the estimate.
Here is the translation of the content into English, keeping the HTML tags and WordPress comments intact, along with the links:
Let's discuss in advance the specific structure in case of trouble during development, including whether the company will handle issues until the end, and whether there will be additional costs for recovery if problems arise.
Proposal Power
Choose an offshore development company with strong proposal capabilities.
Offshore development companies have traditionally grown as subcontractors handling outsourcing tasks.
Subcontractor companies are mainly focused on completing tasks as requested by the main contractor. Therefore, some companies may not emphasize proactive proposals.
However, to complete a better product, it is essential to choose a company with proposal capabilities, rather than just delivering the finished product.
Choose a company that listens to your business goals and IT/DX challenges, and proposes based on an understanding of what business development you are aiming for.
At our company, "Solashi Co., Ltd", we have several project managers who have worked as CTOs at Japanese startups.
We conduct consulting based on your business needs and similar case studies, providing you with a development outline tailored to the difficulty and sequence of your business launch.
If you are looking for consulting, feel free to contact us.
Characteristics and Selection of Offshore Development Countries
Choosing the right offshore development country is also important for smooth project progress.
Below are the characteristics of four major offshore development countries, along with situations in which they are suitable as outsourcing destinations.
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- Vietnam
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- India
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- China
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- Philippines
Vietnam
Vietnam is known as an offshore development country with relatively good cost performance.
According to TopDev's "Vietnam IT Market Report 2023," the IT workforce in Vietnam reached around 530,000 people in 2023.
(Reference: Vietnam IT Market Report 2023 - Vietnam Tech Talents Report│TopDev)
Vietnam has skilled IT professionals, and it has many successful projects with Japanese companies, making it one of the recommended offshore development countries.
Among offshore development countries, Vietnam offers relatively low costs, so it is ideal for those who want to secure high-quality system development while keeping costs down.
For more details, check out "8 Reasons Why Vietnam is the Best Choice for Offshore Development and How to Choose a Good Company."
India
India is one of the IT powerhouses known globally.
Although labor costs are slightly higher compared to other offshore countries, India has a large population, and there are many skilled engineers available.
Although few people speak Japanese, it is possible to communicate in Japanese or English through bridge SEs or interpreters.
Offshore development companies in India offer a wide range of services and can handle large-scale projects with highly skilled expertise. India is suitable for companies requiring high-level skills for large projects.
China
Due to the recent GDP growth, labor costs in China have been rising, especially in coastal areas.
The major advantage of Chinese offshore companies is their high level of IT skills. However, it is important to be mindful of differences in national character with the Japanese.
In some cases, the responsibility for poor quality is shifted to the client. However, this does not apply to all companies, so choosing a company that will work with mutual understanding is key.
Philippines
The Philippines has a young average age, and English is widely spoken. Around 50 million people use English as an official language.
Furthermore, a large number of Filipinos work for foreign companies, so they are familiar with global work environments. The time difference with Japan is only one hour, making it easy to coordinate working hours.
The cost is relatively reasonable, and the Philippines is a great choice for companies that want to communicate in English.
Common Mistakes in Choosing an Offshore Development Company and Their Solutions
To avoid common mistakes in choosing an offshore development company, pay attention to the following points.
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- Small-scale projects lead to high costs.
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- Handing everything over to the offshore development company.
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- Prioritizing cost above all else.
Small-scale Projects Lead to High Costs
For offshore development, small-scale projects are not recommended.
For example, if you assign a project that is less than a month long, the explanation costs may end up being higher. Resources other than what is needed to achieve the goal will require effort, which can lead to delays.
Therefore, assign projects with a certain scale. A good guideline is to choose offshore companies that can handle projects of 7–8 months and 4–5 million yen.
Handing Everything Over to the Offshore Development Company
It is crucial not to completely delegate tasks without clear communication.
If an offshore company doesn't fully understand your business goals and requirements, there will be gaps between the expected implementation and the actual deliverables.
Success requires aligning the development intentions and goals from the design stage. Be sure to clearly communicate what you want to achieve and involve skilled technical experts in key meetings.
Prioritizing Cost Above All Else
Another mistake is focusing solely on cost.
If you choose a company just because their estimate is cheap, you may end up with low-quality deliverables or project delays.
Some offshore development companies may lack sufficient expertise or IT skills. Although their estimates may seem cheap initially, the actual cost-effectiveness may be poor.
To avoid choosing the wrong company, it's essential to research the overall development market and understand budget expectations beforehand.
Don't just opt for low-cost development—make sure the company can provide high-quality deliverables with the right resources. Then, choose a company that offers good cost performance.
If You Don't Want to Fail in Offshore Development Company Selection, Contact "Solashi"
Choosing an offshore development company is the first important step that determines the success of your project.
Carefully compare multiple companies and select the one that best fits your needs based on thorough research.
At our company, "Solashi Co., Ltd", we have several Japanese PMs with experience handling startup projects and business launches. We have experts who are skilled in IT project management and system development technology.
We also have Japanese-speaking bridge SEs who support development, translating detailed instructions and requirements for local engineers, ensuring a smooth process without any gaps.
We are available to help those planning to launch new businesses, as well as those looking for new outsourcing partners. If you are looking for an offshore development partner, please contact "Solashi Co., Ltd."
