As more and more businesses start their digital transformation journey, offshore software development and business development are increasingly getting more connected. Offshore software development refers to hiring a development company from different regions or countries with different languages and cultures.
On the other hand, business development is the ideas, activities, and initiatives that help improve the performance of the business. This includes making strategic decisions and building essential partnerships that help in business expansion, increasing revenues, and increasing profitability. Here we look at the connection between offshore software development and business development.
Understanding the Basics of Business Development
Usually, business development activities fall under different departments, including project management, sales, vendor management, marketing, and product management. Besides, it also extends across partnerships, negotiations, networking, and cost-saving efforts. All these activities and departments need to align with the business development goals.
For example, a business has a service or product that is successful in a given region, like the US. The business development team researches to establish expansion potential, they later find out that the business can expand to a new region, like any neighboring country in South America.
Marketing
This involves advertising and promotion that targets achieving a successful sale of the products to the customers. Marketing plays a key role in helping a business achieve its sales targets. Usually, business development initiatives allocate a marketing budget. With higher budgets, businesses are able to carry out aggressive marketing strategies such as personal visits, cold calling, free sample distribution, and roadshows. On the other hand, lower budgets only result in passive marketing strategies like print ads, billboards, limited online ads, and social media ads.
Sales
The sales management and personnel focus on a particular set of clients or markets for targeted revenue. For instance, the business development team assesses the markets in the expanded region and finds that sales worth $1.8 billion can be achieved within four years. The sales department now targets the specific customer base with their sales strategies to achieve the set goals.
Business Planning/ Project Management
After expanding to a new region, the project management team should decide whether the business should have a new facility or manufacture products and import them to the new market. Besides, they also need to decide whether manufacturing products in the base country for the target market will require additional facilities. The business development team makes these decisions based on their time-related assessments and costs. Once the decisions are made, the project management team implements them and works towards achieving the desired goals.
Strategic Partnerships and Initiatives
Entering a new market can be quite a challenge and also pose great risks. Thus, you can’t always take it as a solo effort. In some cases, a business can decide to clear all the required formalities alone or form strategic partnerships or alliances with local firms already established and operating in the new region. The business development team works with the finance and legal teams to identify the pros and cons of each option and opts for the one that serves the business well.
Vendor Management
The management team must decide whether the new business will require external vendors. For instance, will the new business require a dedicated courier service for shipping a product? It is also important to decide whether the firm will also work with an established retail chain for sales and the costs associated with such engagements. In this case, the development team takes care of answering these questions to ensure that they make informed decisions.
Product Management
Usually, market requirements and regulatory standards vary depending on the country. For instance, a medicine of a particular composition may make it to the Indian markets, but not in the United States. Thus, the product management team needs to research and understand whether the new market requires a new version of the product or a customized product altogether.
Depending on the business strategy, the requirements drive the role of manufacturing departments and product management. Regulatory adherence, legal approvals, and cost consideration are considered part of a business development plan.
Cost Savings
Most people tend to think that business development is only about increasing market reach, products, and sales. However, it is also about making strategic decisions that improve a business’s operations, including cost-cutting measures. For example, an internal assessment that reveals overspending on travel may lead to the establishment of new travel policy changes. These changes may include choosing less expensive transport modes or hosting video conference calls.
Moreover, the management can also outsource non-core functions as one of the cost-saving initiatives. These functions may include accounting, technology operations, financials, billing, and customer service. The strategic partnerships involved in these initiatives fall under business development.
Negotiations, Lobbying, and Networking
In some cases, business initiatives may require soft skills like lobbying, networking, and negotiations. For instance, lobbying is legally accepted in some regions and may be necessary for penetrating the new market. Negotiating and networking may also be required when working with third parties like agencies, regulators, government authorities, and vendors. These initiatives also fall under business development.
Offshore Software Development
In every emerging business, expansion and growth remain priorities. Offshore software development allows businesses to outsource non-core functions. This helps businesses free their employees more time to focus on core functions. It also offers businesses access to all the necessary resources and a larger pool of IT experts.
The business development team may decide to outsource some functions to an offshore team as a cost-saving initiative. Besides, the business development team may also use offshore software development to get high-quality IT products and services. It can also provide a perfect way for a business to venture into new markets. Thus, there is a significant connection between business development and software development.
Why is Offshore Software Development Important?
Offshore software development offers several benefits to any emerging business. However, if it is the first time you are planning to use these services, you will need to know their advantages. Here we look at why offshore software development services are important.
Lower Operation Costs
Offshoring allows businesses to gain access to all the necessary resources and IT experts at lower costs. It also helps cut down on establishing new facilities and expenses on hiring, recruiting, and retaining the best IT talents. Software development is a complex process that requires resources and a lot of time. It also requires focus and complete attention from the first stage to the last stage when the product is deployed. Therefore, it is advisable to have a reliable, dedicated, and competent team that has the capacity to handle the task.
Faster Development Timelines
Unlike your in-house team, an offshore development team can solely focus on your project and easily deliver it on time. The success and failure of some software products depend on how fast they reach the market. Therefore, it is important to assign your software development project to an offshore team for faster deployment.
Faster development and deployment of software products can help your business to maintain a competitive edge. Offshore software development companies have teams of talented developers ready to take on any project, while in-house development requires beginning with the hiring process. The in-house team will also take time to determine and acquire the tools that would be necessary for handling such a task.
Greater Scalability
Businesses need to improve their scalability to boost their chances of growth and development. Higher scalability enables a business to adjust the size of their teams depending on the requirements and the workloads. The business development team may adopt activities like offshoring to help improve scalability.
Offshoring does not only give you access to a larger pool of talented developers but is also a value-adding extension for your business. Therefore, offshore software development may allow a business to take on some projects and make high profits.
Reduces Liabilities
Software development requires resources and time too. It is also a complex process that needs complete focus and attention as it features a number of potential risks. These risks can lead to huge financial losses. Offshoring puts the responsibility of implementing the project on the offshore development company. This helps reduce the potential risks that would lead to the delivery of a product that does not meet the requirements or requires additional changes before deployment.
What a Business Developer Needs to Know
Business development is mainly about making high-level decisions. Thus, business developers need to keep the following in mind:
- The current state of the overall growth and industry projections
- The current state of your business based on Strengths, Weaknesses, Opportunities, and Threats analysis (SWOT analysis)
- The customer profile
- The possible options for cost-savings and cost areas
- New products/sectors/domains ready for business expansion to complement the existing business
- Unexplored and new market opportunities
- Primary sources of revenues/sales of dependencies and current business
Final Thoughts
Business development involves making high-level decisions that help boost the growth and development of the business. One of the major areas in decision-making is adopting cost-saving initiatives like offshore software development. Offshoring allows your business to access a wider pool of IT talent and resources.