Onshore vs Offshore Software Development- Which is Better for Your Company?
It is quite a task for your company to recruit software developers and build a team for developing customized applications with desired features. The management has to spend a lot of time and effort in the whole process. There, IT outsourcing solutions can help you out. You can have two options for IT outsourcing- onshore and offshore. Both these options have pros and cons. This blog aims to highlight the characteristics of both these types through a head-on comparison.
Let’s start with a brief introduction of both these outsourcing types-
Let’s take an example. Suppose, your company is based in the USA. If you hire resources or outsource your project to the company based in the USA itself, then it is onshore outsourcing. It is the nearest outsourcing because the company working on your project is also located in your home country. Simply put, you are working with a team of expert software developers in your own country in onshore outsourcing. However, this option is pricey and at times, you may not hire the right talent.
In the above example, if you hire resources from a company based in a different country from your home country, then it is offshore outsourcing. It is about working with companies based in a different part of the world. If you opt for having IT outsourcing solutions from countries like India, China, Ukraine, the Philippines, or any European countries, and your home country is the USA, then it is offshore outsourcing. It is a cheaper option but you may have to face the communication trouble.
Comparison between Onshore and Offshore Development Models
The biggest difference between the onshore and offshore software development models is the cost of the project. In offshore outsourcing, you usually assign your project to the companies based in developing countries. In such countries, you need to pay less for the project as compared to the same in developed countries or your home country. Technological advancements have made the world a huge family and it is easy to outsource your software development project in any part of the world.
Both these models have their advantages and disadvantages. Let’s shed some light on them.
Onshore Development- Major Advantages
The onshore outsourcing model is a traditional one for accomplishing projects on time. Many companies across the world consider it a viable option for the following reasons-
• It is possible for the management to hire the team directly by interviewing each member
• Your company can give training to onshore team members to improve their efficiency
• Onshore team is familiar with the work culture and your employees feel comfortable while working with this team
• Onshore model is easy-to-manage and you can readily get updates daily
Onshore Development- Key Disadvantages
• Your business may have to face the extra burden that impacts the overall performance
• This is an expensive option as you have to manage an additional team
• It is cumbersome to meet the deadlines when you have an extra burden
Offshore Development- Main Advantages
It is fair to mention that you can convert the disadvantages of the onshore model into advantages while opting for offshore software development. Following are the significant advantages of offshore development.
• It is cost-effective. You can finalize various projects at reasonable rates. At the end of the day, you can maximize ROI through this model
• It is easy to manage various projects at once
• It is a reliable option especially when you are unable to manage an additional team or your software project needs to meet the deadline
Offshore Development- Key Disadvantages
• Absence of infrastructural and technical aspects in your company
• Lack of communication with the multilingual, multi-cultured workforce
• Time-zone difficulties and risk of receiving unsatisfactory work
Onshore vs Offshore Development- Which is Better Option?
As technology evolves at a rapid pace, it is difficult to find expert software developers. If you hire an onshore team, you need to pay them a much higher cost than you may have expected. On the other hand, there is always a risk of hiring the wrong offshore team. Simply put, choosing an onshore or offshore development model is a critical decision that requires many considerations.
Poor communication, wrong code, extra time, and security risks are some of the cons of offshore development that may lead you to opt for onshore development. But then, if you assign your project to the reputed offshore software development company, you can easily overcome these issues in a cost-effective way.
Here are some key tips to keep in mind while hiring an offshore software development company.
• Hire the best available IT resource
• Ensure following agile development approach
• Focus on effective and timely communication
• Evaluate the team’s abilities and strengths
• Analyze the risks and define the strategy to complete the project on-time
Better communication and quick turnaround are two major pros of onshore development. But, the offshore model can offer the advantages of minimum cost and time-zone difference. You need to choose the right model based on your project requirements, budget, and market trends.
In a nutshell, experience, skills, communication, and dedicated approach are all you need to complete your software project with the desired outcome. It is better to do your homework before opting for either onshore or offshore software development.
Semaphore Software can deliver high-quality IT outsourcing solutions at reasonable rates. Our Offshore Software Development Center (ODC) consists of expert and experienced developers who are well-versed in using the cutting-edge tools. Our IT solutions are designed to keep the client’s business needs in mind and assist them to increase productivity. Send us an email at firstname.lastname@example.org to know more about our offshore software development services.
About Minesh Doshi
Director - Silver Touch Technologies Ltd Minesh Doshi is a professional with rich experience in process & quality management, software engineering, project and operations management and Human resource management. He has acquired expertise in driving quality management initiatives and in implementation of quality principles and process standards – ISO 9001, ISO 27001, ISO 20000, SEI-CMM / CMMi.