The Risks And Benefits Of Offshore Software Development

We live in an age of burgeoning technology – in an age where rockets are re-useable, cars drive themselves, and watches keep track of our pulse, it’s easy to imagine that developing a mobile application by partnering with an offshore development team would be easy to manage.

With VoIP technologies like Google Hangouts, instant communication platforms like Slack, and project management tools like Trello, it would seem that we’ve reached a truly global era in business and the development of products.

And in many respects, this is true – plentiful and vast industries exist today either due to the existence of global production and supply industries, or rely on the global market that fuels today’s global economy for resources, customers, or both. Many of the rare earth metals that make phones, watches, laptops, or virtually any electronic device come from regions in Africa or Australia – without a global supply line, none of us would have phones – or be reading this blog, for that matter.

What I’m trying to convey is that we do live in the future – it just isn’t to the point where we can collaborate on the level that mobile app development requires, while communicating on a global scale.

The myth of offshore development

There’s plenty of misinformation about offshore development – the main one being the quality of code. A good developer is a good developer no matter where they are or what language they speak (but they’d better know their programming languages) – offshore developers aren’t bad at what they do.

While it’s very true that applications developed by offshore companies can lead to unsustainable codebases, low-grade products, or un-deployable platforms, developers in India or Ukraine can be just as experienced (or inexperienced) as developers in Japan or the US.

The problem isn’t people – it’s the communication of ideas.

Complicated ideas and concepts are difficult enough to understand when they are presented to us in person – just think of how many companies today struggle with disseminating and promoting company culture amongst their own employees – communicating the “feel” of a company’s mission is a challenging task.

And with the addition of different time zones, and distances measured in the thousands-of-miles, communicating the high-level, detailed concepts that are crucial to the decisions of app development can become a nightmare.

So if you’re in the UK, hire a UK development team – and if you’re in Bangladesh, hire a Bengali development team. The most important preliminary step to a successful app is a throughly-vetted development partner; a company that you can trust to deliver a full-fledged product, and trust to understand the mission of your app.

Research the risk & reward of offshore development

The benefits of offshore development

There are benefits to making use of offshore development companies:

1. Cost: Development companies almost universally charge based on an hourly rate. Developers in countries with a lower cost of living will report lower hourly rates than high-cost-of-living countries. While a developer’s rate in the US may range from $100 – $150, a developer in Asia would range from $20 – $50. If managed properly, this can lead to significant savings.
2. Quality: “Quality” could just as easily be listed in the “risks” section of this blog. By hiring an offshore developer that lives in a country with a lower cost of living, you stand the chance of getting a high-quality product for a fraction of the cost of a highly-skilled developer in your country.
3. Cultural insight: This is the most substantial benefit to hiring an offshore development team. If you are targeting a market in Sri Lanka, you should hire a development team from the region. The insight the team will bring to the design choices of your app will help your app feel familiar to your specific audience, and increase its chances of market penetration.

The risks of offshore development

Despite these benefits, there are many more opportunities for the risks associated with offshore development to take hold.

1. Hidden costs: While offshore development does come with a lower hourly rate, this is more often than not negated by the fact that development will usually take twice as long. The main reason for this is…
2. Communication: Couple language barriers with high-latency internet connections and having a verbal conversation with your team in a different country, and communication can become a real challenge. Communicating the technical aspects of an issue a developer is working on can be downright impossible sometimes. For systems that require integrated maintenance provided from your own IT department, clear and efficient communication is a necessity.
3. Management: For many of the same reasons as communication, managing an offshore team can be an organizational nightmare. It is recommended to hire a project manager that is local to your offshore team, and will work to bridge the time difference your development team and your company will experience.
4. Data privacy, security, and governmental regulation: As unfortunate as it is, it’s necessary to be wary of IP theft when dealing with offshore developers, which makes it especially vital to throughly research your development partner. If a developer in another country steals your intellectual property, there is very little recourse available to you. Security and privacy are two other pressing concerns when utilizing offshore codebases – some countries’ intelligence agencies will work with developers to include backdoor access in order to extract users’ personal data for means of cyber espionage. 

Hourly rate, time, and scale

These are the variables to the equation for determining the cost of your app; the more time it takes to develop, the cost rises… the higher the hourly rate, the cost rises… the larger the scale of your app, again, the cost rises.

Consider hourly rate, time and scale

When comparing the cost of developing an app using an offshore developer versus an onshore developer, the key factor is time. While an offshore developer’s hourly rate will usually be lower than an onshore developer, developing an app with an offshore developer is a longer process – sometimes adding two or three times the amount of total hours to develop. This discrepancy in development length is usually exacerbated by communication issues and time-zone differences, and in turn, significantly reduces the savings of the lower hourly rate of offshore development. 

By increasing your time to market, your app’s chances of success will lower, and by increasing the chances of miscommunication, your app’s codebase has the possibility of being less robust than an app developed onshore – leading to the necessity of almost immediately updating your app as soon as it hits the App Store or Google Play.

With these factors in mind, the cost of developing an app offshore or onshore usually even out – and while either option comes with their own benefits, the risk of miscommunication is a factor every CTO or team lead should consider when deciding between offshore or onshore app development.