For any ambitious CTO or business owner approaching a software development project, choosing between onshore and offshore agencies can be a tough decision. The lure of lower costs might tempt you into using an offshore company, while the convenience of harmonised time zones and easy communication may pull you back towards familiar shores.
Nowadays, there are countless agencies offering software and mobile app development but not all are made equal. To find the right solutions for your business, it’s important to think carefully about the needs of your project, your people and your customers.
In this blog, we’ll be taking an honest look at the pros and cons of onshore and offshore outsourcing so that you feel better equipped before selecting a team to turn your software vision into a reality.
Offshore software development started to gain traction in the early noughties and has since grown to be a widely adopted practice. Over the years, Asia Pacific countries such as India, China, Malaysia and Indonesia have taken the top spot for the most desirable places to outsource offshore talent thanks to their growing tech talent pools and promise of low-cost labour.
Let’s start by taking a look at some of the pros and cons of offshore development:
It’s no secret that offshore companies in Eastern Europe and Asia tend to offer more competitive rates than those on British soil. Many of the countries in these parts of the world have lower wages and operational costs. This means that they can charge less per hour than their Western counterparts.
While opting for an offshore agency may offer apparent cost savings, it’s important to be aware of possible hidden expenses and the consequences of cost-cutting measures. Though the appeal of exceptionally low rates may be hard to resist, choosing the cheapest agency you can find may result in compromises on the quality of service, such as inadequate training which could lead to subpar deliverables. Hidden costs may also arise from legal fees, contracts and even project reworks.
With a larger talent pool, offshore agencies often have the flexibility to adjust team sizes based on project needs. Whether scaling up for a large project or scaling down during quieter periods, team structures can be quickly adapted when required.
For more complex software projects, communication is key. This is something that can be much more of a challenge when working with an offshore company due to both cultural barriers and the reliance on virtual correspondence. When you also take into account time-zone differences, the flow of information can quickly become disrupted and businesses may need to work harder to keep project goals aligned.
Since offshore agencies have access to a much larger volume of developers, projects can often be completed quickly, allowing you to reduce time to market. This is also aided by the fact that offshore teams will be working throughout the night so, if you also have your own in-house team, you’re essentially creating a 24-hour work cycle.
Sadly, offshore agencies don’t always adhere to the same data security standards and IP regulations as those in the UK. This can result in a lower level of protection for sensitive information and unauthorised use of your code or software. It’s also important to consider the likelihood that these agencies may use subcontractors or third-party services to fulfil certain tasks. This introduces additional entities into the data processing chain, potentially increasing the risk of unauthorised access and data breaches.
Unlike offshore outsourcing, onshore outsourcing (sometimes known as domestic outsourcing) involves hiring software developers from within the same country.
While onshore outsourcing does come with a higher price tag, many businesses find security and reassurance in hiring an agency closer to home. In some cases, businesses will have tried working with offshore developers first, only to find that the communication barriers or time zone differences make it tricky to achieve their development goals.
Here’s what you need to know:
One of the most obvious advantages of working with an onshore company for software development is enhanced communication. Without the constraints of mismatched time zones, cultural barriers or language difficulties, it can be a lot easier to share information and develop a more cohesive working relationship. Depending on the location of the development team that you use, in-person meetings may also be possible. Meeting face-to-face can prevent conversations from getting misconstrued and offer an easier way to tackle complex problems.
As mentioned previously, due to lower operating costs and pay, offshore companies are able to provide cheap rates which are unlikely to be matched by UK agencies. For start-ups and small businesses, the cost of UK labour may not be sustainable within their budget constraints and they may lean towards offshore teams for a more economical alternative.
When working with UK agencies, businesses often feel reassured knowing that they are protected when it comes to intellectual property and GDPR. The legal framework in the UK provides a secure environment where clients can trust that their proprietary information is safeguarded against unauthorised use or infringement. In other parts of the world, these frameworks may differ, be treated more leniently or, in worst-case scenarios, not be adhered to at all.
While global outsourcing opens the door to a large network of software developers, finding the right talent within the UK can be more of a challenge. UK software specialists are in high demand and this can mean that it may take longer to find the right agency for your project.
If you need to deal with an urgent matter or want to make changes quickly, having access to a team in the same country offers major advantages. Even if you are using an offshore agency that offers 24-hour customer service, there’s no guarantee that you’ll get to speak to the same person or have your request fulfilled straight away. When working with an onshore agency, tasks can be completed rapidly. This is particularly important for time-sensitive projects that require swift turnarounds.
So, is there a middle ground?
For those wanting more flexibility, a carefully planned hybrid approach could be a viable solution. In a hybrid delivery model, more complex and sensitive components of a project can be managed by an onshore team, ensuring proximity for effective communication, compliance with local regulations, and alignment with cultural nuances. At the same time, non-critical tasks or those requiring scalability and cost-efficiency may be delegated to an offshore team.
This division of labour may help businesses to maintain a balance between cost-effectiveness and the need for direct, local oversight.
It's clear that both onshore and offshore development can bring numerous advantages, but irrespective of your chosen path, it's crucial to look beyond your basic requirements.
To make the most out of outsourcing for your company, it’s vital to think about the kinds of people you want to work with.
Do you want to work with a team that will tick boxes and take direction? Or, do you want to work with a team of innovators that can bring fresh ideas to the table and push your product beyond your initial vision?
Don’t forget: Successful software development isn’t just about skilled labour and qualifications. It’s about finding a tech team that truly understands your target market and knows how to transform your product into something that goes beyond the ordinary and provides real value.
And we don’t think that’s too much to ask…
At Newicon, we live and breathe innovation. We don’t just ask “what” your project requirements are, we ask “what if…?”.
Our commitment to cutting-edge technology means that we’re not content with just ticking boxes and meeting deliverables. We want to innovate with you and come up with new ways to push the boundaries of what technology can achieve.
So, let’s take on the future of tech together! Give us a call to tell us about your upcoming project and let’s ignite the spark of software innovation.
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