In short, it is a process by which an organization or business obtains the services of a third-party developer to create its own software product. Like outsourcing, offshore is a popular approach to development when the business or organization cannot afford to hire expensive talent or when there is a lack of qualified native developers in their local market.
Offshoring has become an increasingly popular option for organizations looking to either outsource their software development needs or replace their current team with a more cost-effective one.
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Work Is Not a One Size Fits All Solution
There are plenty of reasons why businesses and companies choose offshore over onshore development, but with that comes some increased risk. Here are some of the pros of this type of software development.
1.   Lower Costs and Flexibility
Although the upfront costs associated with offshore development may seem intimidating at first, they are worth it in the end. The availability of talented labor at lower rates than what you would be able to pay in your home country will mean huge savings on your overall budget. It also makes sense because you do not need to invest in setting up an office abroad or worry about local compliance issues.
Also, the considerable time difference between countries can allow you to have a more hands-on approach to your project. You can work with developers at a specific time of day, which is ideal if you need something done on short notice.
When building a minimum viable product with the help of an offshore MVP development company, this can be especially useful if you need to make last-minute changes or implement changes that were not anticipated during the initial build phase. However, this could also be a downside – but we’ll touch upon that later on.
2.   Increased Quality
Offshore developers work in a very different environment. They are typically employed by large outsourcing firms, which assign them to work based on their individual performance. These firms have strict policies in place that ensure that their employees complete projects on time, at high levels of quality, and at affordable costs to clients.
This is one reason why offshoring has become so popular among large companies—they can hire highly skilled employees right out of college (or high school) who perform better than average because they’re motivated and encouraged to do so.
3.   Software Developers Can Use the Best Tools and Practices
One of the main advantages of this type of development is that developers can use the best tools and practices to help them get their job done better, faster, and cheaper. They are capable of using modern technologies and techniques in their work.
A product is mainly defined by its quality – and offshore software development companies focus on creating high-quality products. Developers in India and China, for example, are known for their expertise in developing mobile apps, games, and business applications. They often use technologies such as HTML5 and CSS3 in their work.
Offshore outsourcing is more cost-effective than working with a trained team because it allows companies to focus on their core activities while outsourcing non-critical tasks to software engineering companies. It also reduces the amount of time spent communicating with outsourced teams since they’re located far away from your business or office.
It Seems Offshore Is the Way to Go. Or Is It?
No matter what type of business you own, you will surely find it beneficial to incorporate the use of software in its daily operations. It has become a necessity nowadays for almost every individual and company. It is important to take note that there are several factors that may affect the success of your software, particularly if it were developed offshore.
In other words, here are some of the cons of offshore development.
1.   Jack of All Trades – Master of None
Offshore programmers are good at developing basic applications in most cases. They are not experts in all types of software development – there’s a chance they don’t know the intricacies of creating complex systems. For example, many don’t know how to integrate their code with existing custom legacy systems. This can lead to problems down the line when more complex projects are required.
If you’re just trying to get a basic application up and running, these types of software developers are cheaper and faster than their in-house counterparts. However, as your company grows and needs more complex applications — think ERP (Enterprise Resource Planning) or CRM (Customer Relationship Management) — hiring an offshore software company will not be the wisest choice.
2.   Different Rates, Different Wages
Inexpensive labor is one of the biggest reasons companies outsource their software development. Many firms in the US or Western Europe simply cannot compete with the rates offered by Indian or Chinese developers. According to conducted surveys, their rates are roughly one-half to one-third lower than their onshore counterparts.
While this can be a boon for small and medium-sized firms that need a great deal of assistance and don’t have a lot of money to spend – it’s not so great for larger companies that have established software development practices and have been able to attract and retain talented employees onshore. They’ll have to work harder to compete with overseas firms that can offer much cheaper rates.
3.   Business and Communication Gaps
Offshore software development can be a great choice for many businesses, but it is important to know what to expect before entering into a contract. Here are some of the most common challenges that come along with outsourcing your project:
- The biggest challenge you will face is the time difference. If you are located in the United States and your team is in central Europe, then you will have a significant time difference. This can make it challenging to work at times when it’s convenient for both parties.
- Language barriers can also be a problem when working with an offshore team. It can sometimes be difficult to get across exactly what you want without misunderstandings.
- Another concern is having someone unfamiliar with the American market oversee your project. While this person will most likely be very knowledgeable about software development and programming languages, they may not understand how these programs fit into your company’s goals or how they should be used in the long run on a day-to-day basis.
- When working with offshore teams, you also have to consider taxes and legal issues. These companies may not always pay their employees a fair wage or adhere to U.S. labor laws.
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Offshore development is a highly debated topic. Many businesses successfully work with these types of developers, but there are also many stories about failed projects.
When it comes to offshoring, it is highly recommended that you opt for a company that’s well-established and has years of experience in the industry. Choosing a company with a solid reputation is crucial as this will give you peace of mind and make the process much smoother.
If you are still not sure whether software development offshore is the right option for your business or not, we hope that this pros-and-cons article has helped you make up your mind and will help you make the right decision for your business.
