Successful Offshore Development Starts with Preparation: 7 Clear and Actionable Steps Explained

Thorough preparation is essential for successful offshore development. However, many people considering offshore development may be unsure how to prepare effectively.

Meticulous preparation is the key factor that determines the success of offshore development. In this article, we will explain why preparation is so important and outline seven clear steps for proceeding with it. By reading this article, you will gain the knowledge needed to confidently embark on your offshore development project.

We also provide a detailed explanation about Vietnam, a particularly recommended country for offshore development. If you're interested, be sure to check it out.

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.

Why Preparation Is Crucial for Offshore Development

Thorough preparation is indispensable for a successful offshore development project. Here are three main reasons why:

To prevent communication breakdowns
To prepare for risks and potential issues
To ensure the project progresses as planned

Let’s explore each of these in detail.

To Prevent Communication Breakdowns

In offshore development, you will communicate with overseas development teams who speak different languages and come from different cultural backgrounds. This naturally increases the risk of misunderstandings and misalignment.

To prevent such misunderstandings, it’s important to establish an effective communication structure. In the preparation phase, it is essential to understand the following:

How to communicate with the offshore development company
The structure and organization of the offshore development team

By preparing in advance, you can significantly reduce communication issues during offshore development.

To Prepare for Risks and Potential Issues

Offshore development can involve various risks and problems such as:

Unexpected impacts from political instability or exchange rate fluctuations
Cost and delivery overruns
Leakage of confidential information

To mitigate these risks, two preventive measures are crucial:

Selecting a trustworthy development company
Carefully reviewing contract terms

Taking these measures from the preparation stage will help you minimize potential risks in offshore development.

To Ensure the Project Proceeds as Planned

Careful preparation is critical for smooth project execution. This is especially true in waterfall development, where it’s difficult to make changes once development has started.

Insufficient preparation can easily result in deviation from the original plan, leading to additional effort and unexpected costs. Without thoroughly considering development requirements and structure, you may face setbacks and waste of resources.

That’s why thorough preparation is essential for offshore development. With a well-thought-out plan, you can balance both cost and quality throughout the project.

7 Steps to Prepare for Offshore Development

From here, we’ll explain the specific preparation steps for offshore development, divided into the following seven stages:

Appoint a project manager within your organization
Clarify your goals for offshore development
Gain a solid understanding of offshore development
Understand the development team structure
Understand the development methodology
Select and contract with an offshore development company
Kick off the project

Let’s take a closer look at each of these steps.

1. Appoint a Project Manager Within Your Organization

One of the first steps in offshore development preparation is to designate a project team or representative within your organization. This person will serve as the point of contact with the development company and will be responsible for the following:

Managing project progress and making key decisions
Clarifying project objectives and requirements
Coordinating with other internal departments
Identifying and resolving issues early on
Managing budgets and ensuring quality

The project manager will act as a bridge between the development company and internal stakeholders, driving the project forward toward its goals. Choosing someone capable of fulfilling this role is critical to ensuring smooth project execution.

2. Clarify Your Goals for Offshore Development

Setting clear goals is essential for a successful offshore development project. There are two key aspects to goal setting:

Clarify the overall purpose
Define the system requirements

Clarify the Overall Purpose

Clearly defining the development purpose helps set the direction of the project and aligns the team around a shared vision. Specifically, it’s important to clarify and share the following with your team:

The content and functionality of the system to be developed
Milestones and deadlines toward completion
Expected effects of offshore development (cost reduction, faster development, etc.)

It is important to clearly envision the expected outcomes and share them with the entire team.

Define System Requirements

The next important step is to clearly define the requirements of the system to be developed. Requirements refer to the functions and performance expected of the system. If the requirements are unclear, the expected deliverables cannot be achieved.

While it is possible to have the contractor define the requirements, it is important to have a concrete image beforehand to avoid misalignment in understanding. By identifying and organizing the requirements, the hearing process will also go more smoothly.

3. Understand Offshore Development

If you are new to offshore development, it is crucial to understand what it entails. The main points to understand are as follows:

What is offshore development?
Communication methods in offshore development
Characteristics of each country
Cost perception

Let’s explain these points in detail.

What is Offshore Development?

Offshore development is a method of outsourcing system or app development to overseas companies. Compared to domestic development, outsourcing to overseas development companies with lower labor costs is a major advantage as it allows you to secure high-quality resources while reducing costs.

By utilizing offshore development, you can supplement your company’s lack of skills or personnel, improve development speed, and gain access to advanced technologies. It also allows your in-house development team to reduce their workload and focus on core business operations.

If you want to learn more about offshore development, please refer to the article below.

Communication Methods in Offshore Development

In offshore development, communication with the development company is conducted using phone, chat tools, and online meeting systems. It is important to decide in advance on communication methods, frequency, and meeting formats, taking time differences into account. Especially, the following should be agreed upon:

Format of daily or weekly reports
Contact route when problems occur

In offshore development, differences in language and culture can easily lead to misunderstandings, so frequent alignment is essential. It is important to establish communication rules to ensure smooth project progress.

Characteristics by Country

Even within offshore development, each country has its own characteristics and strengths. It's important to understand the differences in labor cost levels, engineers' technical skills, time differences, and other factors. Here's a summary of representative offshore countries:

Country	Monthly Cost per Engineer	Time Difference with Japan	Characteristics
Vietnam	400,000 yen~	2 hours	Good cost performance
Philippines	300,000 yen~	1 hour	English is widely spoken
India	500,000 yen~	3.5 hours	High technical skills
Bangladesh	450,000 yen~	3 hours	Many fresh talents
China	500,000 yen~	1 hour	Strong IT capabilities
Myanmar	270,000 yen~	2.5 hours	Diligent work ethic

Understanding the characteristics of each country is crucial in choosing a development destination that suits your company. It's important to make a comprehensive judgment, not just based on cost.

Cost Perception

The cost of offshore development mainly consists of engineer labor costs, but there are also various other expenses involved. The main costs include:

Engineer labor cost (Monthly Cost × Number of Months × Number of Engineers)
Design cost
Direction/management cost
Operation and maintenance cost
Miscellaneous costs (communication, travel, accommodation, transportation, etc.)

When considering offshore development, a proper cost estimate and thorough review are essential. Identify the breakdown of expenses in detail to minimize the risk of unexpected costs.

If you would like to know more about offshore development costs, please refer to the article below.

4. Understand the Development Structure

The structure of offshore development can be broadly categorized into “Fixed-Price Contract” and “Lab-Type Contract.” Let's look at the characteristics of each.

Fixed-Price Contract (Development)

A fixed-price contract is a development style that proceeds based on a set budget and schedule. It is suitable for projects where the objectives and deliverables are clearly defined, and there is a set deadline.

Since the contractor is fully responsible for development, it reduces your company’s management workload. On the other hand, it is less flexible and difficult to accommodate specification changes. Additionally, be aware that work outside the contracted scope may incur extra charges.

When choosing a fixed-price contract, it is important to clearly define the deliverables and include detailed terms in the contract.

Lab-Type Contract (Development)

A lab-type contract is a structure based on duration and man-months. This structure is suitable when starting development on a small scale. It allows you to continuously outsource development as if it were part of your in-house development team.

The key feature of a lab-type contract is that development can proceed flexibly even if specifications are not finalized. Additionally, since communication with engineers can be more frequent, it is easier to accommodate detailed specification changes.

However, if your company is responsible for management, the burden on your manager may increase. You need to establish an internal structure to properly manage the offshore team and lead development toward the project goal.

5. Understand Development Methodologies

The two main development methodologies are “Waterfall” and “Agile.” Let's go over their characteristics.

Waterfall Development

The waterfall model is a development method in which the overall work plan is decided at the beginning, and development proceeds according to that plan. The development process follows the order of requirement definition, design, implementation, testing, and release.

It has the advantage of easy scheduling and budget/progress management. Since the procedure is clearly defined, it's also easy to grasp the progress status. However, it lacks flexibility and may struggle to adapt if specification changes occur midway.

Thus, waterfall development is suitable for projects that require structured progress with predefined requirements.

Agile Development

For more details on how to proceed with a project, please refer to the following article.

Related article: 8 Steps to Proceed with Offshore Development – Key Points to Avoid Failure

For Offshore Development, Consult Solashi — We Support You from the Preparation Stage!

This article has explained the key points that are important in the preparation phase of offshore development. Offshore development is a powerful option that allows you to significantly reduce system development costs while leveraging high-quality resources. However, due to differences in language, culture, and time zones, sufficient preparation in advance is essential to mitigate potential risks.

Clarify the project goals and gain a deep understanding of offshore development
Select an appropriate development structure and methodology, and find a reliable development company
Proceed with the project under thorough communication and progress management

Following these steps and preparing in stages is the key to success in offshore development.

At Solashi Co., Ltd, which has extensive experience in offshore development in Vietnam, we provide meticulous support tailored to your business needs. With high-quality development by our talented engineering team and smooth communication facilitated by Japanese staff, we lead your project to success.
Even small consultations are welcome. If you’re considering starting offshore development, feel free to contact Solashi Co., Ltd.

Akira Shimazoe

Representative of Solashi Japan LLC. Born in April 1989 in Fukuoka Prefecture. Graduated from the Graduate School of Information and Mathematical Sciences at Osaka Prefecture University. Joined Suntory System Technology Co., Ltd., an IT subsidiary of Suntory Holdings, in 2014. Broadly responsible for the development, operation, and implementation of vending machine delivery management, efficiency improvements, and sales management systems. Founded Yper Inc. in 2017, serving as CTO and CPO. Contributed to the launch and growth of the app-linked delivery bag "OKIPPA." Selected for Toyo Keizai's prestigious "Amazing Venture 100" and Forbes' "Forbes 30 Under 30 Asia 2019."