If you're considering exploring offshore software development, this calculator is designed to help you estimate the potential return on investment (ROI) for your organization. By inputting key metrics such as team size, salaries, and improvement strategies, you can gain valuable insights into the financial impact of optimizing your software development processes through offshoring.
Total Cost:
Code Churn Savings:
Technical Debt Savings:
Productivity Gains:
Outsourcing Savings:
Total Savings and Gains:
ROI:
ROI Ratio:
Payback Period:
Net Present Value (NPV):
1. Enter the required information in the input fields.
2. Toggle the checkboxes for Code Churn Reduction, Productivity Improvement, and Outsourcing if applicable.
3. Click the "Calculate ROI" button to generate the ROI report.
4. View the calculated values in the results section to the right.
Number of Developers: The total number of developers in your software development team.
Average Annual Salary: The average annual salary of a developer in your organization.
Recruitment Cost Percentage: The cost paid out to recruiters as a percentage of the average annual salary of the new hires.
HR Expenses per Employee: The cost of advertising/ job board posting, potential in-house staffing, background checks/drug screening, pre-employment assessments, interviewing time, travel and accommodation, and onboarding costs, etc.
Code Churn Reduction: The estimated percentage reduction in code churn and rework. Enable the checkbox to include this in the calculation.
Technical Debt Percentage: The percentage of resources consumed by technical debt.
Productivity Improvement: The estimated percentage improvement in developer productivity. Enable the checkbox to include this in the calculation.
Outsourcing: Enable the checkbox if you plan to outsource some development work.
Outsourcing Percentage: The percentage of development work to be outsourced.
Outsourcing Cost Reduction: The estimated percentage reduction in costs for the outsourced work.
Discount Rate (for NPV): The discount rate used for calculating the Net Present Value (NPV).
Strategy Lifespan (years for NPV): The expected lifespan of the implemented strategies in years, used for calculating the NPV.
Total Cost: The total cost of the software development team, including salary, recruitment, and HR costs.
Code Churn Savings: The potential savings from reducing code churn and rework.
Technical Debt Savings: The potential savings from addressing technical debt.
Productivity Gains: The potential gains from improving developer productivity.
Outsourcing Savings: The potential savings from outsourcing a portion of the development work.
Total Savings and Gains: The sum of the potential savings and gains from implementing the strategies.
ROI (Return on Investment): The percentage return on the investment in implementing the strategies.
ROI Ratio: The ratio of the total savings and gains to the total cost.
Payback Period: The estimated time (in months) to recoup the investment in implementing the strategies.
Net Present Value (NPV): The present value of the future savings and gains, considering the discount rate and strategy lifespan.
The Offshore IT Development ROI Calculator is provided for informational and illustrative purposes only. The calculations and results generated by this tool are based on user-inputted data and assumptions. They are not intended to serve as financial advice or guarantees of actual outcomes.
While we strive to provide accurate and up-to-date information, the results are estimates and may vary significantly based on individual circumstances, market conditions, and other external factors. Users are encouraged to conduct their own research and consult with qualified financial, technical, and legal advisors before making any decisions related to offshore software development.
The creators and distributors of this calculator do not assume any responsibility for errors or omissions, or for any actions taken based on the results produced by this tool. By using the ROI calculator, you acknowledge and accept that any reliance on the calculations and results is at your own risk.