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A New Guide to Offshore Software Development in 2025

05/11/2024

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Ngan Phan

Once considered a mere trend, digitalization has become a vital requirement for companies. Consequently, there is a growing demand for IT services. According to Statista, the global IT consulting and implementation services market is projected to reach $82.44 billion by 2027. Due to its affordability and easy availability for tech experts, offshore software development is emerging as a software development option in the modern digital era. Many startups and small enterprises are exploring offshore software development for its numerous benefits, including reduced time, costs, and effort.

This SupremeTech article aims to define offshore software development, provide potential benefits and challenges for your business, and introduce you to the most successful Vietnam offshore development company.

What is offshore software development?

Offshore software development involves outsourcing your software development needs to a third-party software provider in a foreign nation. After that, entrust them with the challenging programming responsibilities associated with your project.

Consider a scenario in which a US-based business collaborates with a successful offshore software development company in Vietnam to develop a digital transformation system.

This outsourcing model has recently gained popularity due to its numerous advantages. Specifically, it eliminates the geographical barrier to finding a suitable development team. Besides, the third-party vendor assumes full responsibility for the development process and product quality. Offshore software development services have become increasingly popular. They provide access to highly skilled employees at competitive prices, reducing the overall costs of managing a development team.

Offshore development is becoming a software development option in the modern digital era

Onshore vs. Nearshore vs. Offshore Outsourcing: Understanding the Differences

Due to unique geographical and collaborative dynamics, offshore outsourcing distinguishes itself from onshore and nearshore outsourcing. In onshore and nearshore outsourcing, the IT vendor operates in the same country or a nearby region, fostering accessibility in managing cultural norms, language barriers, and time zone differences.

Onshore Outsourcing

Onshore or domestic software development outsourcing involves collaboration with local individuals or vendors within the same region. For example, a software development business in the United States might outsource a project to a service provider in the same, close, or neighboring state, ensuring the project’s completion within the nation.

Nearshore Outsourcing

Nearshore outsourcing entails working with an IT partner in a neighboring country, typically for specialized needs like recruiting, consulting, or project-based services. Nearshore firms are located in the same time zone, on the same border, or in proximity. For instance, a U.S. corporation may outsource a software development project to a Canadian company, minimizing geographical distance despite being in a foreign country.

Offshore Outsourcing

In contrast, offshore development outsourcing introduces significant geographic distances, time zone differences, and often cultural or linguistic barriers between the client and the outsourcing partner. As proof, if a U.S.-based company delegated the project development process to Vietnam, an emerging IT destination, it engaged in offshore outsourcing.

The differences between Onshore, Nearshore, and Offshore outsourcing

Which services can be outsourced?

An offshore software companOutsourcing IT tasks to an offshore software company can be a strategic move for businesses looking to enhance efficiency and reduce costs. Here are some of the most frequently outsourced services that can significantly benefit from external management:

Custom Software Development

Custom software development is one of the primary services outsourced to offshore companies. This allows businesses to create tailored solutions that meet specific needs without the costs of hiring a full-time in-house development team. Offshore companies can provide the expertise to deliver high-quality software that aligns with business goals.

Cloud Infrastructure Management

Managing cloud infrastructure can be complicated and time-consuming. By outsourcing this function, companies can ensure that their cloud environments are optimized for performance, security, and scalability. Offshore providers often have the tools and expertise to manage cloud resources efficiently, allowing businesses to focus on their core operations.

LINE MINI App Development

Developing LINE MINI apps is essential for businesses targeting customers in Japan, Thailand, and Taiwan, as LINE is the leading messaging platform in these regions with millions of active users. Offshore software companies like SupremeTech specializing in this area can provide valuable insights and technical skills to create engaging applications that resonate with local users, enhancing customer interaction and satisfaction.

Omnichannel Retail Solutions

Today’s customers expect a smooth shopping experience across different shopping channels. Outsourcing the development of omnichannel retail solutions allows businesses to integrate their online stores, mobile apps, and physical shops, ensuring a cohesive customer journey.

Software Quality Assurance (QA) and Testing Services

Quality assurance and testing are vital components of the software development lifecycle. By outsourcing these services, companies can have experienced professionals thoroughly test their software before it goes live. This helps identify bugs and issues before deployment, ensuring a smooth user experience and reducing post-launch problems.

UI/UX Design

User Interface (UI) and User Experience (UX) design are crucial for making software easy to use and visually appealing. Offshore teams can provide specialized design services that focus on creating intuitive and visually appealing interfaces. This not only enhances user satisfaction but also increases engagement and retention rates.

Dedicated Development Team

Many businesses opt to outsource an entire dedicated development team. This model provides access to a pool of skilled professionals who work exclusively on a company’s projects. It offers flexibility in scaling resources according to project demands while ensuring the team is aligned with the company’s goals and culture.

Outsourcing has become the optimal solution for various business challenges. Beyond IT functions like cybersecurity, customer support, data storage, etc., businesses can outsource non-IT functions such as legal, tax, HR, finance, etc.

Comprehensive outsourcing, covering both IT functions and business operations.

The benefits of offshore software development

Deciding between in-house software development and partnering with an offshore development team can be challenging. However, offshoring software development presents an enticing economic proposition due to its various benefits:

1. Cost savings

Maintaining an in-house IT workforce with up-to-date technology knowledge is challenging and costly. Outsourcing software development eliminates the need to invest in IT infrastructure or spend time recruiting and training personnel.

Many offshore software development centers, such as those in Central Europe, offer flexible pricing and high-quality services. Favorable factors like a skilled workforce, official support, and tax advantages make countries like Vietnam, India, China, and Ukraine cost-effective choices compared to US developers.

Consequently, offshore software firms may provide similar services at a lower cost, enabling savings of up to 40% – 50% without compromising project quality or expertise.

Key benefit: Offshore development significantly reduces costs.

2. Obtaining qualified talents

Are you facing challenges in hiring IT professionals locally? Outsourcing development teams offers a perfect alternative, helping to resolve the shortage of IT professionals. Furthermore, when the project is completed, it can relieve the stress of managing and employing in-house development teams.

Offshore development can attract many skilled software engineers. These engineers have extensive experience creating software applications that meet global standards. They also bring valuable insights from working on international projects, which helps them understand the challenges in custom software development.

Offshore software development grants access to specialized talents and taps into a global talent pool

3. Time savings

Starting projects from scratch can be challenging. Hiring, training, and managing people takes a lot of time and resources, which can create stress due to tight deadlines. Offshore software development companies can help speed up this process. They have the expertise to deliver projects on time while keeping costs down. By using Agile methods and other development technologies, these companies ensure that projects are completed as planned, allowing for ongoing improvements and quick adjustments to any changes.

Time savings is one of key benefit when choosing offshore development

4. Approaching the latest technologies

The high cost of adopting new technologies often challenges many organizations. However, by partnering with IT outsourcing service providers who are deeply invested in technology and consistently stay abreast of new developments, you can confidently rely on them to gain access to new tech stacks.

Common offshore software development challenges

1. Time zone differences

Time zone differences can significantly affect communication and may cause delays in product development. These time differences can slow decision-making if a business requires prompt response and approval on an important issue.

At SupremeTech, we handle time zone differences by arranging work hours and clear communication. We schedule our meetings to fit your work hours so you get timely updates and quick responses to essential questions or approvals. This helps reduce delays and keeps your project on track without slowing development.

2. Lack of communication

Communication challenges are common in offshore software development for several reasons. One major issue is language barriers, which can make effective communication difficult. To mitigate this, it is important to choose a software outsourcing partner who is fluent in English or your preferred language. Additionally, their work processes should align with yours throughout the development cycle.

At SupremeTech, we address these challenges head-on. Our Business Analysts, or Proxy Product Owners, bridge the communication gap between the development and business teams. We not only communicate in your language but also enhance understanding of the various roles within the project, foster the development team’s sense of ownership, and align everyone towards a common goal for project success.

3. Data security issues

Data leakage is a pressing concern in offshore collaborations involving sensitive information. Address this issue by engaging a partner firm and establishing a Non-Disclosure Agreement (NDA). Additionally, inquire about the outsourcing vendor’s security measures, such as user privacy policies, secure data storage, encryption, and compliance with regulations like the General Data Protection Regulation (GDPR).

Addressing data leakage, a critical concern in offshore software business collaborations

4. Quality assurance

Maintaining quality control when working with an unfamiliar team can be difficult. Offshore developers might have different ideas about how business should be conducted and projects should be managed. This can lead to a final product that doesn’t match your expectations. Additionally, you might be collaborating with recent college graduates or less experienced developers.

To address quality control issues, SupremeTech consistently follows global standards for quality and security. We have achieved ISO certification to guarantee the security, quality, and efficiency of our products, services, and systems. Our information security policies are audited by CyberGRX, ensuring we meet high standards. Additionally, we are proud to have been recognized as a Silver Partner of ISTQB in 2022 for our software testing practices.

When should you work with an offshore development vendor?

Offshore development provides clients substantial benefits, including cost and time savings, access to highly skilled engineers, and the latest technology. However, offshore outsourcing faces many challenges, including time zone differences, communication issues, data leakage, and quality assurance concerns. Offshore development becomes an excellent alternative when you aim to:

  • Prioritize core business activities.
  • Access industry professionals.
  • Increase technological competence.
  • Accelerate project completion.
  • Control the software development costs.
  • Reduce operational costs.

In conclusion, offshore development provides firms various alternatives to save effort, time, and money. To keep your budget while getting decent results, you may hire offshore IT experts to create a versatile and successful new product. Contact us for a consultation on any queries about offshore software development.

References:

Statista Research Department and 14, M. (2024) Global: IT consulting & implementation market revenue 2018-2029, Statista. Available at: https://www.statista.com/forecasts/1079927/it-consulting-implementationservices-revenue (Accessed: 28 October 2024). 

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          AI-Assisted Ecommerce Solution Wins Third Place at SupremeTech AI Hackathon 2025

          SupremeTech’s first-ever AI Hackathon was more than just a competition. It was a thrilling test of creativity, focus, and endurance. For 22 hours, teams of passionate innovators raced against time to turn bold ideas into working prototypes that could bring real business value through AI. Among them was team Người Lào, whose project tackled one of the most relevant challenges in modern retail: building an omnichannel e-commerce and loyalty platform supported by AI. The goal was to create a system that connects online shopping, personalized loyalty programs, and in-store interactions into one seamless customer journey.What made Người Lào stand out was their business-driven mindset. Instead of treating the task as a purely technical challenge, they saw it as an opportunity to transform how Vietnamese cosmetic retailers connect with their customers. Their answer was ViEC Beauty, an innovative AI-powered e-commerce solution built on Zalo Mini App, turning a familiar local platform into a powerful tool for digital commerce. Meet The Team Team Người Lào was formed with the simple spirit of having fun, staying friendly, and learning together. Everyone joined with an open mind, ready to give their best once the challenge began. The team brought together members from different backgrounds, covering all key roles in a real project from infrastructure and front-end to back-end, business analysis, and quality control.Phuoc Pham, the team leader, believed great teamwork mattered more than perfect technical skills. What he looked for were people who knew their strengths and were willing to give their all. With that mindset, Người Lào grew into a team built on trust, respect, and laughter, values that ultimately became their greatest strength. When a Familiar Task Became the Toughest Challenge At first, the assignment sounded simple: create a multi-channel e-commerce and loyalty platform for retail stores. Building e-commerce systems was something most members already did in their daily work. But soon they realized that creating a typical shopping app would not stand out. To impress the judges, they needed something fresh, a solution with clear business impact and technical creativity. In just 22 hours, with five members and the support of AI tools, Người Lào had to deliver a product that was practical, scalable, and market-ready. Finding a Small Idea with Big Impact After a few brainstorming sessions, they decided to focus on a small but meaningful niche: the Vietnamese cosmetic retail market. This idea came from observing how many small cosmetic shops in Vietnam were struggling to keep up with the digital shift. While big players like Shopee and TikTok Shop dominate online sales, a large number of small cosmetic stores still lack proper digital tools to compete. These stores serve a loyal base of middle-aged customers who have strong purchasing power but are often left behind in the rush of digital transformation. They do not need complex apps or flashy platforms. What they need is something simple, familiar, and trustworthy. Người Lào identified three major problems these small retailers face: Losing connection with middle-aged customers who prefer personal interaction but no longer visit the store as often.Lack of customer insights makes it hard for shop owners to understand shopping habits or preferences.Being overshadowed by large e-commerce platforms, which are slowly taking over their loyal customer base. With those challenges in mind, Người Lào saw an opportunity to make a real difference. Instead of competing with big platforms, they wanted to empower small retailers with a digital tool that feels local, personal, and easy to use.That was when the idea of building an AI-powered e-commerce solution on Zalo Mini App, namely ViEC Beauty, was born. ViEC Beauty is a platform that could bring e-commerce and loyalty features right into the ecosystem that Vietnamese users already trust and use every day. It was a smart move that combined business empathy, technical creativity, and a clear understanding of the local market. From Idea to Prototype in 24 Hours Once the idea was clear, the real race began. With only 24 hours to bring ViEC Beauty to life, Người Lào jumped straight into action. The plan was simple: divide roles clearly, trust each other’s strengths, and move fast. Hieu Vo, the dev lead, took charge of integrations and overall coordination. Anh Duong focused on building the back end with Laravel and setting up the admin site. Hieu Cao worked on the front end of the Zalo Mini App. At the same time, Huong Nguyen took on both the Business Analyst and Quality Control roles to ensure everything aligned with the initial vision. Meanwhile, Phuoc Pham, the team leader, acted as the bridge connecting everyone - reviewing ideas, making key decisions, and preparing the final presentation slides. With all the key roles covered, the team had a 360-degree view of the project, from technical implementation to business logic and user experience. They spent the first ten hours coding with AI Copilot and documenting the workflow. It was intense but exciting until the team hit a wall. The AI started producing conflicting UI components due to unclear process design in the initial prompts. What was supposed to save time ended up creating bugs that needed hours to fix. But instead of getting frustrated, the team stayed calm, laughed it off, and worked together to debug and refine the product until everything clicked into place. When the final hour arrived, they had a fully working Zalo Mini App—not perfect, but functional, meaningful, and proudly built within a single sleepless day. The Product: Core Features That Matter ViEC Beauty, an AI-powered e-commerce solution built within the Zalo ecosystem, offered small beauty retailers an accessible and familiar way to sell online and engage customers. Core App Features Product Catalog: An easy-to-browse collection of beauty products directly inside Zalo.Basic Loyalty Point System: Customers earn and redeem points to encourage repeat purchases.Admin Dashboard Prototype: A simple dashboard for store owners to manage products, orders, and sales.Zalo Integration Setup: Allows stores to send personalized notifications, skincare reminders, and promotions through the Zalo Official Account. Super Admin System A more advanced panel included: Real-time data analytics for instant business insightsInventory management to track stock levelsCRM tools to maintain relationships and engagementCampaign and promotion management to run and measure marketing activities Even though some features like Group Orders and AI Skin Analysis were still in ideation, ViEC Beauty already demonstrated how a simple, focused solution could bring AI-powered value to small businesses. Tech Stack The team built ViEC Beauty with React and Zalo SDK for the front end, Laravel for the back end, MySQL for the database, and EC2 cloud infrastructure for hosting. They chose familiar and reliable technologies to move fast and deliver results within 24 hours, prioritizing execution over complexity. >>> Read more related articles: SupremeTech’s AI Hackathon 2025: A blend of Product-Focused Spirit and AI-assisted DevelopmentHow Human Intelligence and AI Capabilities Can Redefine Software Development | Featuring The 1st Runner-Up of SupremeTech AI Hackathon 2025 Judges’ Feedback The judges praised Người Lào’s strategic focus on a niche market and their decision to build on the Zalo Mini App, calling it a practical and high-potential approach. They noted that while the product targeted small beauty retailers, a limited market segment, it had strong potential for real-world implementation. They recommended expanding ViEC Beauty into a multi-store SaaS platform, adding community-driven features, and integrating AI more deeply for personalization and competitiveness. On the technical side, the judges commended the team’s clear planning, fast execution, and AI integration. They encouraged the team to make AI applications more visible and explore scalability for larger projects. Overall, Người Lào left a strong impression with a well-executed prototype and a clear vision for future growth. Teamwork Memorable Moments For Phuoc Pham, the leader, the biggest lesson was simple: strong determination makes anything possible. He learned to stay focused, manage effort wisely, and balance ambition with practicality so the team could deliver on time. To him, the real strength of Người Lào came from teamwork, from every member understanding their own strengths and supporting one another toward a shared goal. Huong Nguyen shared that the hackathon was an unforgettable experience, a test of creativity, patience, and collaboration. From ideation to final delivery, every member gave their best and learned how to manage time, communicate, and step outside their comfort zones. Winning third place was a proud moment, but for the team, the valid reward was the experience itself, learning, laughing, and building something meaningful together. Conclusion For Người Lào, the SupremeTech AI Hackathon 2025 was more than a contest. It was a journey of teamwork, creativity, and discovery. In just 24 hours, they turned an idea into a working Zalo Mini App that blended business insight, AI innovation, and human collaboration. Their story proved that success is not just about winning but about learning how to move fast, stay focused, and create with purpose. ViEC Beauty started as a hackathon project, but it carries the potential to grow into something much bigger for Vietnam’s beauty retail industry. Team Phuoc Pham T. - Senior Infra EngineerHieu Vo H. - Senior BE EngineerDuong Nguyen V. A. - BE EngineerHieu Cao K. - FE EngineerHuong Nguyen T.T. - Quality Control Engineer  Tech Stack Frontend: React, Zalo SDKBackend: LaravelDatabase: MySQLInfrastructure: EC2, Cloud 📩 Read more articles about us here: SupremeTech’s Blog

          21/10/2025

          187

          Ngan Phan

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          AI-Assisted Ecommerce Solution Wins Third Place at SupremeTech AI Hackathon 2025

          21/10/2025

          187

          Ngan Phan

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