Outsourcing Options: Onshore Vs Offshore Software Development

These days, custom software application development services are in great demand. Companies in all industries, all over the world, strive to stay on top of the latest technology trends. They want the best possible software solutions at the lowest possible costs.

In-house software development can be a huge expense for most businesses, especially those where software development is not one of their primary business functions. Therefore, many companies are considering hiring a third party to develop software for them. This phenomenon is called outsourcing. Companies generally consider two options for outsourcing: onshore and offshore development.

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Let’s go over the specifics of these two types of outsourcing and highlight their pros and cons to help you decide which one to choose for your business.

What is software development on land?

Onshore software development refers to the practice of outsourcing the creation of your application to a software development services company that operates in the same geographic region as your business.

Advantages and disadvantages

Onshore development has some positive and negative aspects.

Perhaps the biggest advantage of onshore development is that it allows real-time communication between you and your software partner. Because you and your software vendor are based in the same region, you both work in the same time zone. Chances are, you have the same working hours, which makes correspondence quick and immediate. There is a risk of maximum overlap of available hours. This makes communication clear and reduces the risk of miscommunication and misunderstanding.

Second, when you hire a software development service provider based in the same city, country, or geographic region that you are based, there is no physical barrier between you and the development team. If you need the resources to be physically present on site or want to go meet the developers in person to discuss the project, a meeting can also be easily arranged without incurring extravagant additional travel costs.

Another benefit of offshoring is that you and your development team already know each other’s language and culture. Even something as little as speaking the same language reduces the chances of misinterpretation. This cultural familiarity also establishes a special bond with your partners where both of you are able to understand little unsaid things. This would encourage more open and honest communication. There might also be certain legal advantages, such as knowledge and familiarity with the trade laws or financial regulations of the region.

When it comes to the downsides of land-based custom software development services, the most glaring downside is the high cost. If your business is based in one of the developed countries, you know how expensive these services can be in those regions. The developer teams based in these regions have a wealth of valuable experience in the technology industry. Thus, they offer superior work standards and follow the best practices in the industry. However, this quality work often comes at a high price.

What is offshore software development?

Offshore software development services involve hiring a third party software developer beyond the geographic region in which you operate, for example in a different country. Since the world has turned into a global village, remote communication and collaboration have become possible, the offshoring of all kinds of services has become quite common.

Advantages and disadvantages

Just like onshore software development services, offshore services also have their advantages and disadvantages. Let’s talk about the benefits first.

The main selling point of offshore software development services is that they can be much cheaper than onshore services if you choose the right location. There are many parts of the world, such as a number of countries in Asia, where labor costs are low for almost all kinds of services including software development. Therefore, clients from developed countries often outsource their work to these regions to reduce their development costs quite significantly. In these regions, competition is also very stiff and the market is flooded with qualified developers. This factor also plays a role in reducing costs even more.

Another advantage of offshore development is that since the costs are generally lower, you can even experiment a little and hire multiple teams in multiple regions to handle different stages of the development cycle. This can ensure a certain element of quality while keeping your costs under control.

Removing geographic barriers also opens up a world of new and unique opportunities for you and your potential custom software development service partner. You can access a much larger talent pool in virtually any location in the world. For example, if your project is based on some new X technology and you can’t find a developer in your state who has enough experience with it, you can search for regions where experienced X developers are based.

Now let’s talk about the negatives.

Although offshoring is cheaper, you may still face a significant lack of quality control. Countries offering some of the cheapest rates for custom software development may not have the most knowledgeable tech professionals for many reasons, such as limited access to the latest technology or skills.

In addition, to achieve successful results from custom software application development services, it is extremely important that you communicate your project requirements very clearly and quickly to the development team. Selecting a software development services company located halfway around the world will inevitably result in a difference in culture, language, and time zone.

When you are conversing with someone who does not speak the same language as you, a lot of dialogue can be lost in the translation. This can prove to be a critical issue, because if your requirements are not clearly communicated, your entire project may have to be done from scratch, giving you no cost advantage. The communication barrier can also manifest itself in the form of a lack of overlap in working hours. If at any point in development or after launch your software encounters a critical error that needs to be addressed immediately, your offshore team could be out of reach because… they are all sound asleep!

Which is better: onshore development vs offshore development

The debate over whether onshore development is better than offshore or not can only be settled by you. There is no right or wrong answer to this question. Your choice of custom software development depends on your priorities.


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