Pros and Cons of Offshore Development

Offshore Development

The following article discusses the practice commonly known today as offshoring or outsourcing. This term is generally used to describe the strategy employed by many companies of employing third party software development firms in remote parts of the world to take over IT related, or other functions that would typically have been handled by local employees. The basic concept being that money is saved by migrating work from high net worth countries to ones where economies are typically not so strong. The process of outsourcing IT work is simply known as outsourcing or offshoring in most circles. Another term often used for this activity is BPO (Back Office Processing). BPO is typically used to refer to administrative and non-technical outsourcing.

On the surface the cost savings from outsourcing are very attractive. Salaries of experienced software developers in India, the Philippines and Vietnam are often 5 or 6 times lower than Australian or European counterparts. Simply comparing apples to apples in terms of salary though do not provide the appropriate picture. Many lower cost countries suffer from infrastructure issues, high costs of doing business, regulatory risks etc. It is very important that any offshore engagement is begun with a careful studious eye.

Cost savings to one side there are challenges also with regards to execution in many offshore app development engagements. Culture and communication has a huge role in the success of an engagement, and simply calling up a provider in the far east and agreeing to transfer development activities over a few conference calls from a desk in London is typically not going to work.

Having handled countless offshore engagements over the years we are fortunately able to help. Our unique approach to app development outsourcing involves bridging local and remote teams together using a multicultural team structure. This typically involves embedding one or two expats, often originating from the outsourcing country into our remote team structure. We also ensure that each of our clients is assigned a native speaking account manager who has experience of both local and remote cultures. Offshoring can be a great way to grow but it is vital that the whole process is handled in the right way from the outset to ensure the best possible level of success.

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