By Shaurya Singh, 6/9/2020
Deciding when to use offshore vs onshore software development is something companies, from start-ups to multinational enterprises, struggle with from time to time. Historically, offshore development has been used by primarily large companies however, with technology allowing for smoother communication across cultures this has become significantly cheaper allowing all companies to take advantage of these offshore resources. The difference between offshore and onshore is where the labor comes from. Offshore is labor that is outsourced to a different country while onshore is utilizing local talent. Here we are going to attempt to solve the big question: which is better, offshore or onshore software development?
The offshore development model is a method where a company outsources their development needs outside of the country. Popular countries for this include India, Malaysia, and Thailand. Some of the main potential advantages of offshore development consist of a larger talent pool and cheaper costs. Utilizing offshore development vs onshore development allows you to have access to a larger group of talent. Instead of being limited to the local talent pool, offshore development allows you to access the global pool of talent. Although, if you do not know anyone abroad, it could be hard traversing through the large population and finding what you need. Minimum wage laws and the standard of living vary from country to country, often when utilizing offshore development, you will end up paying a person less than you would in your home country. Still, there are some risks with offshore development including language barriers, time-zone differences, and understanding of local culture.
The onshore development model is when work is not outsourced outside of the country; rather, it is done locally. However, the work is still done remotely so you do not have to incur the cost of infrastructure and go through the trouble of on-boarding and training new employees. The primary advantages with this model include quality assurance, efficiency, and security.
Adopting the onshore development model allows you and your business to insure that the quality of the work being done exceeds your expectations. Onshore development allows for better reliability and communication between you and the contractor. With having the opportunity to meet face-to-face, you are able to provide and explain examples as well as have a discussion about the work more consistently and smoothly compared to offshore development. With clearer dialogue and face-to-face communication, this allows you to make sure the quality is what you are looking for.
Because the time-zone barrier is eliminated when using onshore development, when problems arise, they can be addressed quicker by your team, saving you time. Furthermore, the time-zone barrier and the opportunity for face-to-face interaction allows for your internal team and the external team to have a discussion and come up with the best plan to get the ball rolling that works on both sides. Regarding offshore development, the team offshore may take full control of the project and head off in a direction you are not comfortable with since they had to come up with their own solution after a problem arose since they were not able to consult you. Additionally, after the initial meeting, it becomes difficult to find a time where your team and the offshore team can get a chance to work together. The offshore team will have to take charge of the project which could be a risk.
If your team is taking up an offshore model, security can be a huge risk. Protecting your intellectual property (IP) is extremely important when you are trusting someone with sensitive data. There are many countries where your IP can be stolen since copyright and IP laws are not followed or not enforced regularly. Data can be stolen anywhere, and by anyone. However, it is less likely to happen locally where laws are enforced, and you are familiar with how to handle the situation if a data breach occurs.
Still deciding which model is right for you? The answer depends on what you are looking for. Offshore development seems to have pros such as a larger talent pool and cheaper costs. If you are looking for a short term engagement of less than years, going offshore could help you. However, if you are looking for quality assurance, efficiency and security, tapping into the local experts could be beneficial; since face-to-face meetings would be simpler, time-zones will not be a hassle, and there are no language barriers that could get in the way of the product you could oversee that progress is being made in the way you want.
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