Traditionally, Offshore Delivery Centers (ODCs) were seen mostly as a way to save money. But today, more and more companies are using them not just to cut costs, but to become more competitive.
Also called offshore development, ODCs are tech teams based in other countries that handle IT, customer service, finance, or software development roles. Using them for cost savings makes sense since labor is more affordable in countries like India or the Philippines without sacrificing service quality. However, in recent years, companies have realized that ODCs can boost their business to new heights.
Take JPMorgan Chase, for example. They opened a new global tech center in India in 2023, not just because of cost efficiency.¹ According to their regional CEO Deepak Mangla, they did this because “Mumbai and Bengaluru are global cities with an incredible talent pool.” JPMorgan isn’t alone—tech giants like Microsoft, Google, and SAP also rely on ODCs to boost innovation, scale faster, and tap into top international talent.
It is no wonder that the global ODC market is projected to reach over $591 billion by 2025, and grow to over $812 billion by 2029.²
If your company is considering setting up an ODC, now is a great time. More businesses are growing globally and gaining a real advantage, and you don’t want to be left behind in the progress.
A New Era of Offshore Delivery Centers
The offshore delivery center model has advanced significantly and is driven by major global changes. According to experts at Business Research Insights, two of the biggest reasons behind this shift are globalization and the rise of remote work.³ But that’s just the beginning.
The COVID-19 pandemic and fast-paced technological advances have also empowered ODCs to do much more than just cut costs. Here are some changes that allowed them to become key players in helping U.S. companies grow:
- Expanded Roles Over Time. Over time, companies saw that their international teams were skilled and reliable for basic tasks and complex work. Because of this, they started giving them more prominent roles like software development, research, and data security.
- More Automation. Automation and AI also help by handling repetitive tasks in the workplace. This allows offshore teams to focus more on core business work that requires more skills and thinking.
- Remote Work and Flexibility. Since the rise of remote work during the COVID-19 pandemic, the world has improved in terms of working from anywhere and anytime. This makes it easier for companies to find skilled talent without needing a physical office in every country.
- Better Communication with Onshore Teams. Thanks to better communication channels like Zoom and Slack, local employees can work closely with dedicated teams in other countries. This makes collaboration much more accessible, removing previous problems with working across borders.
- Improved Skills and Training. Training teams from other locations has also become more manageable, especially in specialized skills like coding or cybersecurity.
How Offshore Delivery Centers Make Businesses More Competitive
What exactly makes offshore development services such a smart move for companies today? Below are five ways dedicated offshore development teams help businesses grow faster, work better, and compete globally.
1. Access to Specialized Global Talent
Competition for skilled workers keeps becoming more demanding every year, especially in tech and innovation. According to Karat, employers are now prioritizing the quality of hires over quantity, raising the standard passing interview score by 12% in recent years.⁴
Offshore development centers help companies tap into talent pools with skills they might not find locally. For example, many companies hire software developers in Ukraine, known for their strong technical skills, or digital marketers in the Philippines, where English proficiency and creativity are highly valued.
Employers want these specialists not just because they meet global standards at a more affordable rate. Professionals from other countries are often equally skilled or even more capable than local hires.
2. Faster Time to Market
Speed is a significant business advantage, and companies with ODCs can develop and improve products more quickly. The main reason? Time zones.
Since offshore teams work in different parts of the world, projects can keep moving even after the local team logs off. This means faster testing, shorter development cycles, and quicker product launches.
Many SaaS startups use ODCs to release updates and fix problems faster. They’re also helpful in fast-moving areas like mobile app development and DevOps, where teams must work quickly and frequently make changes.
3. Improved Business Continuity and Risk Mitigation
Leveraging offshore development center services helps companies be more resilient during crises. By spreading operations across different places, companies can avoid onshore problems caused by political turmoil, natural disasters, or major health issues.
During the COVID-19 pandemic, the companies with an existing offshore development center were able to switch to remote work more quickly and maintain continuity.
4. More Innovation Through Global Teamwork
Different backgrounds lead to better ideas. While teams in the US might have similar perspectives, offshore teams bring unique viewpoints that can inspire new solutions and creative ideas that in-house teams may not have considered.
For example, offshore software development teams in India can come up with new ideas for mobile payment systems because they understand the country’s mobile-first culture and the need to make financial services available to more people.
5. Global Expansion and Efficient Scalability
Offshore development centers help businesses grow and enter new markets. When a company sets up a remote team with local expertise in a new place, it creates a presence that allows understanding of cultural differences and regional preferences. This makes it easier to adjust products or services to suit that market.
An offshore development center can also facilitate rapid growth. Instead of waiting to hire locally, companies can add skilled workers immediately.
This helps businesses meet rising demand or launch new products faster. Plus, ODC teams let companies grow step-by-step, so they can efficiently test new markets without taking too much risk.
How to Effectively Set Up and Manage An Offshore Delivery Center
Building an offshore development center that truly works isn’t just about hiring people in another country. It’s about making them feel like a real part of your team. Follow these tips to help your ODC succeed.
Read More: 6 Ways to Maximize Remote and Hybrid Collaboration
Think Integration, Not Isolation
Treat your international team as part of your main company, not a separate group. Include them in important planning meetings and give them real responsibilities. This helps them feel connected and better understand your goals. When they feel like true team members, they perform better.
Overinvest in Communication
Good communication is key when your team is spread out across the world. Use tools like Slack or Microsoft Teams to determine what works best for your company.
Make sure everyone knows when and how to talk. To do this, you can set regular meetings and share updates. If possible, set shared work hours for real-time chats.
Create Strong Onboarding and Training Programs
Remote employees do better when they understand the company and their role from day one. It’s important that you give them the same tools, training, and background that you provide for onshore teams. You can pair new hires with experienced team members to help them learn faster.
Set Clear Metrics
If you want a successful ODC, everyone needs to know what success looks like. Give your international team clear goals and track their progress using data. Focus on results like quality of work, speed, and customer feedback. This helps the whole team stay on track and improve together.
Invest in Culture and Connection
A strong team culture makes a big difference, even across countries. Celebrate wins together, do virtual team-building activities, and make time to connect on a personal level. When people feel seen and valued, they’re more motivated to do great work.
Set up an Offshore Delivery Center with Raso360’s help!
Raso360 is a top consultancy and staffing company, specializing in building and managing high-performing offshore delivery teams. With deep industry expertise, we know how to seamlessly integrate your local and offshore centers, ensuring smooth collaboration and outstanding results. You can trust us to deliver exceptional value every step of the way.
Contact us today to start building a global team that drives real results!
References:
- ET Bureau. “JPMorgan Opens Two Global Centres in India.” The Economic Times, 9 Aug. 2023, economictimes.indiatimes.com/markets/stocks/news/jpmorgan-opens-two-global-centres-in-india/articleshow/102552980.cms.
- “IT Outsourcing – Worldwide.” Statista, Apr. 2024, www.statista.com/outlook/tmo/it-services/it-outsourcing/worldwide.
- “Offshore Software Development Market Size, Share, Growth, and Analysis by 2031.” Business Research Insights, 31 Mar. 2025, www.businessresearchinsights.com/market-reports/offshore-software-development-market-118253.
- Karat 2024 Hiring Trends Report. Karat, connect.karat.com/hubfs/Karat_2024_Hiring_Trends_Report.pdf.
