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6 Pros and Cons of Offshore Development You Need To Know

By June 7, 2022June 28th, 20222 Comments

In recent years, offshore development service has attracted huge attention from many business runners. A severe shortage of programmers has significantly increased the hiring cost in many countries. The only way to expand the development team while cutting costs is by using offshore development services. Read on to discover the pros and cons of outsourcing service below.

>>> Read more: Nearshore vs Offshore vs Onshore: What Is The Difference?

Pros and Cons of Offshore Development

Here are some briefs of outsourcing’s benefits:

  • Reduce the cost
  • Increase in productivity
  • A huge talent pool
  • Concentrate on your own activities and plans
  • Good for long-term application maintenance
  •  Increase scalability

Some of their challenges include:

  • Time zone differences
  • Cultural barriers
  • Communication obstacles
  • Inconsistent quality
  • Security risks
  • Loss of complete control

1, Advantages of offshore service

Reduce the cost

Offshore development is frequently used by companies to save money. Although many of these offshore development services have become more expensive over time, they are still often less expensive than those available in the United States. In countries like Vietnam, India and China, many resources are available for comparatively low costs. According to a research from Daxx, The US and Western Europe-based developers ask for from $60 to $200 per hour, whereas the hourly pay for Vietnamese software developers ranges from $10-$25/ hour. As a result, working with an offshore software development team could be a wise decision.

>>> Read more: Vietnam – The Ideal Place To Offshore Software Development

A huge talent pool

Technology is evolving and there is huge demand for IT expertises in many programming languages in website & mobile app development, Big data, Artificial Intelligence, Data Science, DevOps engineers. When it is difficult to find IT expertise in your country, turning to offshore development teams could be a great solution. Since the talent pool is larger, outsourcing software development to offshore suppliers gives you access to more resources, including software professionals with a broader set of capabilities.

Increase scalability

The product development process can get quite stressful along the way. Depending on each stage, it may require flexible staff arrangement. SMEs and startup owners can hire part-time employees and dismiss them when the project is done. However, there is the risk of part-time staff not getting along with the full-time team, or of time being lost during the “warm-up” period.

Outsourcing, on the other hand, benefits SMEs and startups by allowing employees to be adjusted in response to changing needs. Furthermore, the offshore team has already established a strong foundation of collaboration and understanding among its members.

Increase in productivity

An offshore software company has the resources and expertise to complete the tasks quickly. An in-house team may be dragged in to work on many multiple development tasks, where your dedicated agency can focus solely on delivering quality work within the promised timeframe. 

Moreover, offshore software agencies have greater workforces than onshores companies for multiple reasons. Because software development companies in some countries have more skilled software engineers, they can easily hire more people to work on your project.

Concentrate on your own activities and plans

Software development usually consumes more time and resources that could be better spent on your key business objective. Especially for SMEs and startups, hiring software development agencies can help them focus on other priorities such as: finding angel investors, improving their operation, securing funds, etc.

Good long term maintenance of applications

The cost of in-house software maintenance is often out of reach for most businesses. After all, it is expensive for most companies to hire software engineers solely to keep an application running. Outsourcing makes it considerably easier to maintain your applications in the long run because offshore companies have access to a large number of software developers with various skill sets who can be brought on to perform basic maintenance on your app as needed.

Advantages of Offshore Development

2, Disadvantages of offshore service

Time zone differences

When you offshore some parts of your business to another country, this is the first thing to keep in mind because different time zones could only add to the challenge. If you have a question or a problem regarding your project, it may be complicated to contact the person in charge of interacting with you. Your working hours may be in the middle of the night for them and you might have to wait an entire day to receive a response by email or other methods. In consequence, offshore development services necessitate time management and flexibility. 

Cultural barriers

When it comes to teamwork, culture plays a significant role because people from various backgrounds have different attitudes and mindsets toward work and responsibility. Normal behaviors in one culture may be considered disrespectful in another, and vice versa. This can lead to some inconvenient situations and even unexpected conflicts.

Furthermore, the project manager must offer developers days off when their country has national holidays or festivals. For instance, while Christmas is the most important holiday in the United States and Europe, many Asian countries celebrate the Lunar New Year holiday as the biggest holiday of the year.

Communication obstacles

If you choose an offshore company in a country where English is not the primary language, communication can be challenging. Even though many offshore companies have leaders who can speak and understand English, communication issues may arise if they do not understand the nuances of the language.

There are multiple ways of communication such as instant message, email, video calls, virtual meetings. However, sometimes the important instructions and requirements are just being missed or happen at a slower and fragmented pace. As a result, what you want in some cases cannot be understood as its meaning.

Inconsistent quality

If you use an offshore service, there are a few potential issues that can affect the quality of your software development. Because you have to rely on the offshore company to hire qualified developers for your project, it is uncontrollable if they hire the cheapest software engineers available in the market. In consequence, the quality of your work may suffer. 

Security risks

One of the primary concerns that all businesses have when dealing with third parties is information security. With an in-house team, there is less chance of information leaking outside of the company. You can also check the background of each new hire to eliminate the risk of information leakage. This is vitally important if your company’s success depends on being the first in the market.

As a result, before signing a contract with an offshore company, you should talk to your business team and develop guidelines and milestones to protect your data. Then, you can decide what information you can share with software providers and what information must be kept private.

Loss of complete control

Because you’ll be working with someone outside of your organization, you won’t be able to monitor and control the project as it progresses. Working with an off-site development team can be a significant change for some companies, but an experienced agency can assist in making the transition as smooth as possible.

Disadvantages of Offshore Development

If you want to learn more about outsourcing and minimize the potential drawbacks, look no further than AgileTech. With a team of skilled and talented Software Development Experts, UX/UI Designers… from all over Vietnam, AgileTech confidently believes that we can bring the best software development services for our clients. Contact us today to find out how AgileTech can help you transform your business!

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