When offshore software is cheaper – and when it's not

When you're under pressure to cut costs and stretch every dollar, offshore software consulting can look like a tempting shortcut. 

But before you jump at what seems like a budget-friendly option, consider this: The apparent savings often come with hidden risks and potential for higher costs down the line. 

It’s not that offshore consulting is inherently flawed, but chasing the cheapest solution often leads to unexpected challenges and significantly increased expenses in the long run.

In other words, there’s a right time to leverage offshore and a wrong time.  

Over 13 years and more than 1,000 projects, we've seen our fair share of offshore efforts. We’ve witnessed simple tasks done well in successful offshore engagements, and we've been the cleanup crew for many that veered off course. 

Let’s explore when offshore consulting can be advantageous to do more with less — and when it’s set up to fail and could end up costing you far more money (and missed opportunities) in the long run. 

‍When offshore consulting can be beneficial 

Offshoring can be a strategic move under the right circumstances, offering not just cost savings, but also flexibility and scalability. 

Here’s when engaging offshore consultants can be a beneficial strategy:

Routine, low-risk tasks 

Offshore teams can effectively handle low-risk support tasks that require minimal creative input or deep integration with your core team.

Examples include routine maintenance like manual test execution, simple bug fixes, batch updates, straightforward data entry or rote technical migration. These tasks, while necessary, usually don't require the strategic focus of your core team, making them well-suited for offshore management at a lower cost.

Very clearly-defined projects 

Offshore consulting works best when requirements are detailed and clear, leaving zero room for misinterpretation.

When you have a set of detailed specifications where each and every step and expectation is clearly outlined, offshore teams can perform these tasks efficiently under minimal supervision. 

An example could be the development of a standalone software module that integrates with your system but does not require iterative adjustments or extensive customization.

Time-zone management

If your onshore team is prepared to handle coordination effectively, offshoring can ensure that work continues around the clock, potentially speeding up project timelines and increasing productivity. 

For instance, coding tasks handed off at the end of the day in one time zone can be picked up immediately by a team starting their day in another, creating a continuous cycle of development.

When offshore consulting costs more in the long run

Understanding when offshore consulting can jeopardize your project goals is essential for maintaining control over your software’s quality and the project deliverables. 

Here are key scenarios where offshore might be risky — and could end up costing you money, time or missed opportunities: 

If the project is business critical

When customer acquisition or revenue growth are critical, the team needs to aspire for zero-tolerance of defects, a goal that can be hard to achieve with offshore teams. If it fails to meet your standards, you'll end up with costly and time-consuming rework.

‍If the end solution is largely unknown

When the end solution is largely unknown, close collaboration, embracing change, and leveraging modern agile practices will be crucial.

Unfortunately, these are more difficult to pursue with offshore teams due to communication, cultural, and timezone differences. Onshore teams, with their closer proximity, easier accessibility, and cultural alignment with the client, often handle these complexities more effectively. 

This is particularly true for tasks like integrating new technologies into existing systems, where nuanced, ongoing decisions are crucial.

If you’re concerned about security or regulations 

Offshore teams can increase the risk of data breaches, security vulnerabilities, and compliance issues. This is especially significant when dealing with sensitive data or strict regulatory standards. 

Offshore projects might struggle with data protection laws different from those in your country, increasing the risk of breaches and non-compliance.

Transferring user data across borders might also violate GDPR or other privacy regulations, potentially leading to legal issues and fines.

If your team is already spread thin

Effective communication is the backbone of any successful project. A robust offshore investment still requires solid communication and support from the onshore team.

If your onshore team is already stretched thin, integrating an offshore component only intensifies this challenge. When adequate support from the onshore team isn’t available—due to limited time, scheduling conflicts, or language barriers—don't expect an offshore team to succeed.

Additionally, the complexities of managing across multiple time zones can significantly disrupt real-time collaboration and the ability to respond swiftly and effectively.

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‍Unsure if onshore or offshore is the right fit for your project?

We’ve seen the highs and lows of both. Let’s talk about your specific goals and challenges, so you can make the best decision with confidence.

Book a free consultation today with our client solutions specialists, and let’s figure out the most effective strategy for your software development.