Offshore software development is when a person or organization hires an overseas team to provide the service of software development.

While hiring an offshore team may save you money, there is a negative stigma attached to hiring overseas software developers. In this way, it’s important to note that no two software development teams are alike, and choosing the best team for the job will increase your likelihood of achieving software development success!

If you’re hoping to learn more about offshore software development, and how to find the right team, you’ve come to the right place. In the following, we’ll discuss the definition of offshore development to how to handle the pros and cons of offshore software development.

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1. What is Offshore Software Development?


Offshore software development is exactly what it sounds like: Software development services provided by an offshore team. In many cases, hiring an offshore team is referred to as “outsourcing,” as outsourcing is when an onshore team hires an overseas team to either provide a service or produce a product.

As mentioned, no two offshore teams are alike. As with most things, these teams can come in a variety of packages. Generally speaking, offshore software developers or teams fall into one of the following categories:

  • Freelance offshore software developer - A freelance developer is an independent developer located overseas. Free of an agency, this is your least expensive option, but hiring a solo developer comes with its share of limitations.

  • Offshore software development agency - An offshore software development agency is the same as an onshore development agency with the exception of their location (overseas). Hiring an agency is often better than hiring a freelance developer, as it provides you with a larger knowledge base and skill set to pull from.

  • Nearshore software development agency - The main difference between an offshore and nearshore agency is, once again, location. Rather than being overseas, this agency will be located on the same continent as the company hiring the agency.

    Of the options mentioned, this comes with the heftiest price tag, as you may still be working with developers from wealthy, first-world countries. For example, a U.S. company might hire a Canadian software development agency, and while this will cut costs, it may not cut costs to the extent that an entirely offshore team would.

  • The blended onshore/offshore software development agency - Blended agencies bridge onshore and offshore team members. In most cases, that means there is onshore management (e.g. U.S. management) and overseas development.

    Of the aforementioned options, this is the middle-ground both price and talent wise. Because you’ll be receiving talent from both onshore and offshore members, you receive the best of both worlds.


2. Understanding Global Sourcing vs. Outsourcing


As mentioned, offshore software development isn’t limited to merely one type of team. While most of us may initially assume that most offshore teams are merely outsourced, some teams use global sourcing.

The differences in outsourcing and global sourcing can impact the quality of the offshore team you receive, so let’s review these terms and what they mean in terms of offshore software development.

  • Outsourcing implies that an onshore organization hires an offshore organization to provide a service or to deliver a product. In terms of software development, a U.S. company may be hiring an overseas team to provide the service of software development.  

  • Global sourcing, on the other hand, is a multi-national collaboration between an onshore and an offshore organization. With software development, this usually means that a U.S. company is managing an overseas team of software developers; through this global partnership, the blended team is able to collectively provide software development services.

Based on these two definitions, the main differentiating factor is the difference in management. For a purely outsourced team, the management and software developers will be entirely overseas. In contrast, with global sourcing, the management is often U.S.-based, while the software developers are located overseas.

This difference in management typically results in more issues for outsourced software development teams. This is because the individual hiring the team has to work directly with the overseas team members, resulting in the following issues:

  • Communication errors - Cultural barriers, language, time zone differences, etc.

  • Differences in expectations - Organizational and process differences.

  • A final result lacking quality - Lack of training and educational opportunities.

The good news that is that teams operating under a global partnership are able to subvert these issues through the appropriate management, which we will explain further in the following sections.


3. The Role of a Project Manger in Offshore Development?


Teams that operate under a global partnership greatly benefit from U.S. management. An important part of management is your project manager (PM), or the one who oversees your software development project.

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Your PM can resolve many of the issues commonly associated with offshore software development, such as:

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  • Language barriers. - Instead of trying to communicate with your overseas software developers yourself, you can talk to your PM, and he’ll pass your requests to the developers.

  • Time zone issues. - Rather than trying to schedule phone calls with your overseas team, which may be up to half a day ahead of you, let your PM handle those oddly-timed calls.

  • Lack of quality. -  Don’t lose out on the quality you deserve. Your PM can ensure that the developers follow a set development process and provide you with a quality final product.

  • Lack of proper process and management. - If you hire your own offshore team, you’ll likely end up playing the PM yourself. Rather than doing that, let your PM ensure that the developers are following a set process for development and doing so on time.   

With these points in mind, you can see that the primary role of the project manager is to take as much work off of you as possible.


4. The Role of U.S. Developers in Offshore Development


In addition to U.S.-based management, these teams may also offer the assistance of U.S. senior developers, often with at least 3 years experience in software development . Having U.S. senior developers on your side ensures that you will receive the following:

  • Quality software. - While your U.S. project manager may be able to identify an issue, he may not be able to resolve it. However, your U.S. developer can identify the source of the issue and work with the offshore developers to resolve it.

  • No missed deadlines. - As noted, lack of training and educational opportunities can slow down offshore software developers. If the offshore side of the team is slowing things down, your U.S. senior developer can step in to address these discrepancies.  

  • Back-up for emergency situations. - In the case that your software project runs into a major issue, you may not want to wait for your offshore software developers to work on it later that day. Having a U.S. senior developer on hand ensures that problems can be resolved on U.S. time if the circumstances arise.  

While having a U.S. senior software developer may come at an extra cost, it’s often worth it to ensure that your project is completed well, on time, and to provide emergency assistance as needed.


5. Social Responsibility in Offshore Software Development


Hiring an offshore software development team doesn’t only benefit the company hiring the team, but those being hired. Many offshore software developers live in developing countries that provide fewer opportunities to work in tech, let alone advance in that field.

Here are just a few ways that you can benefit others by working with an offshore team:

  • Provide people with better job opportunities. - The average income for the people living in developing countries is extraordinarily low: in fact, 1 in 10 people worldwide survive on under $1.90 a day. By hiring an offshore developer, you contribute to providing people who would normally be subject to such circumstances with better jobs.

  • Contribute to global tech education. - While even the United States consistently fights illiteracy, over 99% of American adults are literate. However, most countries are not so lucky. That being said, most offshore teams provide technical training opportunities, which allows people in these developing countries to pursue better jobs and achieve social mobility.

  • Improve the global economy. - While the U.S. has experienced its fair share of economic woes, developing countries that have been directly impacted by war are much worse off. To combat the unemployment rates of up to 50%, you can employ an offshore software developer and, in turn, improve his community by doing so.


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