July 23, 2024


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Should Your Company Hire Onshore or Offshore Vendors For Custom Software Development?

Most businesses that are in need of custom software do not have the internal resources to develop the solutions they need in-house. The options are to choose development vendors that are either located domestically or to outsource the work overseas. Both options have pros and cons that should be weighed according to the specific needs of the business. Choosing the right custom software developer, either onshore or offshore, greatly depends on multiple 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 with dealing with inter-cultural 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 company representatives can meet face-to-face with the development team and provide continuous input into the project. This helps to minimize the risks involved with investing in custom software development. However, hiring onshore vendors usually comes with a higher price tag that smaller companies my not be able to afford.

The cost factor involved with custom software development is the driving factor for businesses to search for vendors overseas. India, Eastern Europe and the Philippines are just a few examples of regions that have strong workforces specializing in software development. Their wages are considerably lower than those in western countries like the United States or the UK. However, the cheaper expense for software development may come at a price of quality and potential communication problems with the development team. Language barriers and cultural differences like the lack of urgency with deadlines can hinder the success of offshore development projects. If the quality of work is not up to par, then it can be costly to fix in order to meet customer specification. When these issues arise, 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 life-cycle of the project. Therefore, complex projects that may need to be adapted through the development process would not be a good fit for overseas development. Having an in-house project manager in charge of overseeing progress who can effectively communicate with the development team to address issues as they arise is critical. It is also important to choose an outsource provider who has a good track record for meeting project demand for other businesses in the United States.

Under the right circumstances, offshore development can be the right choice for some businesses who need custom software development. For companies who have larger budgets or have projects that require flexibility or complex solutions, it is best to hire vendors located domestically.