Most companies that need custom software do not have the internal resources to develop the solutions they need in-house. The options are to choose development suppliers who are either resident or to outsource the work abroad. Both options have advantages and disadvantages, which should be weighed according to the company’s specific needs. The choice of the right software developer, either onshore or offshore, depends largely on several factors, including the company’s budget for the project, the desired/required amount of interaction with the development team, and how well equipped the company is to handle intercultural communication issues.
The biggest advantage of hiring a software development company located nationally or locally is that communication is generally straightforward. There are no cultural barriers to cross and project miscommunication can be kept to a minimum. There is also the advantage that the company’s representatives can meet face to face with the development team and provide continuous input to the project. This helps minimize the risks associated with investing in custom software development. However, hiring onshore suppliers usually comes with a higher price that smaller companies cannot afford.
The cost factor associated with custom software development is the driving factor for companies to look for suppliers abroad. India, Eastern Europe and the Philippines are just a few examples of regions that have strong workforces specializing in software development. Their wages are significantly lower than in Western countries such as the United States or Great Britain. However, the cheaper cost of software development may come at the cost of quality and potential communication issues with the development team. Language barriers and cultural differences such as lack of urgency with deadlines can hinder the success of offshore development projects. If the quality of the work is not up to par, it can be expensive to repair to meet the customer’s specifications. When these problems occur, the potential cost savings may no longer exist.
Successful offshore software development can be achieved through clear and detailed project specifications that do not change throughout the project’s life cycle. Therefore, complex projects that may need to be adapted throughout the development process will not be a good fit for overseas development. It is critical to have an internal project manager responsible for monitoring progress who can effectively communicate with the development team to resolve issues as they arise. It is also important to choose an outsource provider that has a good track record of meeting project demand for other companies in the United States.
Under the right circumstances, offshore development can be the right choice for some companies that need custom software development. For companies that have larger budgets or have projects that require flexibility or complex solutions, it is best to hire suppliers who are resident.