What Is an Offshore Development Center (ODC)?
An offshore development center (ODC) is a dedicated unit of engineers, located in another country, that works exclusively on a company's products. The team follows the client's processes, tools and roadmap and acts as a long-term extension of the in-house organization.
An offshore development team in an ODC is different from a one-off project vendor. The client sets priorities and the center provides stable capacity over time.
How does an offshore development center work?
A company defines the roles it needs. A provider, or the company itself, recruits engineers, sets up the workspace and manages employment locally. The team then works on the client's backlog as part of its delivery process.
Common setups
- Provider-operated: a partner recruits, employs and administers the team
- Build-operate-transfer: the partner runs the center and later hands it over
- Captive center: the company owns and runs its own offshore entity
What are the benefits of an ODC?
- Dedicated, stable team focused on your product
- Access to a broader talent pool than a local search
- Lower cost per engineer in many regions
- Scalability without opening a new office at home
What are the challenges?
- Time zone gaps that slow communication
- Cultural and process differences
- Higher setup effort than hiring individuals
- Dependence on strong management and clear documentation
ODC vs nearshore team
The main difference is location. An offshore team is far away, often with a large time difference. A nearshore team is in a nearby country, which makes real-time collaboration easier. For US companies, Latin America is a common nearshore option. See our explanation of offshore software development for the broader concept.
Want a dedicated engineering team in the same working day as yours? Talk to Lupa Hire about nearshore teams in Latin America.
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