9 Reasons Why Offshore Software Development Is Too Risky

It's not the cost-effective solution you were promised

If you're reading this article you're probably in one of these two camps:

  • Your business hired an offshore software development company
  • You're thinking about contracting an offshore company 

Offshore development is a popular solution for companies who have small budgets, a lack of internal resources, or strict time constraints. According to Business Insider, "India is 10x cheaper than the U.S. for app development", so it's easy to see the attraction of offshoring work.

Unfortunately, businesses in the United States are discovering that a low price tag comes with hidden long-term costs. 

We've heard countless stories from companies who outsourced their software development to businesses in China, India, or Eastern Europe. They quickly realized they had made a costly mistake. At worst they lost their entire investment, and at best they came away with a functional product hacked together for temporary use.

Why Offshore Software Development Is Too Risky

Your business shouldn't have to learn the hard way. 

Here are 9 problems your businesses might encounter if you use an offshore company to handle your software development projects.

1. There are core functionality issues with the final product

Software development requires constant testing, and maintenance, but if the product wasn't built with a strong architectural foundation, no amount of small fixes will get your software running properly. 

To avoid this risk, it's important to start your project with a solid strategy made by experts in product design, architecture and development. Consider using software consultants who can create the strategy with you so that your offshore team can follow a detailed product development blueprint. 

2. The software you received wasn't what you wanted

This problem is usually caused by miscommunication and bad planning. Your offshore team might have a lead who can strategize, but in most cases, they will build and ship based solely on your instructions. Unfortunately, instructions are not enough to deliver a quality product. You need a plan, documentation, and a strategy to hand off to the engineers. This is made much harder when you're not able to communicate effectively with the team.

3. You don't receive the software product at all

Scams happen in the United States, but the difference in being involved with an offshore scam, is that it's much harder to take legal action.

To avoid this, ensure you get as much background info as you can on the company, its employees, and previous projects. Ask to see case studies, and research some of their clients to ensure they're the real deal. Have face-to-face conversation over video conferencing calls, and have more than one method for contacting the company.

Make sure you have a legal contract with the company that has been signed by both parties, and checked over by a lawyer of your choosing.

4. You end up spending twice as much on development because the product was unusable and you needed to start from scratch

As a software development consultancy we've seen our fair share of unusable code from offshore companies, and inexperienced developers. One of the reasons we have clients come to us is to offer advice on the state of the project, and to fix the product without having to start from scratch. Sometimes that's not possible.

5. Time zones make communication a challenge

The continental United States is split into four time zones, with the largest time gap between the west coast and east coast. With differing work, and lunch hours, it can be difficult to schedule meeting times with this 3 hour time difference. Going offshore means dealing with a much larger time zone gap. It's likely at least one party will need to take a middle-of-the-night meeting.Communication via email will have large 

Time Zones of the World

6. Build time is underestimated, goes well over projected deadline

This one is very common for all dev shops. It's almost impossible to accurately project the build and delivery time for software. However, you should have an estimation that is close enough, and doesn't cost you double what you originally agreed to pay. There are proven methods for projecting how long it will take to build your product.

Work with expert consultants to scope the project out for you, and provide a plan that your offshore development team can meet. This process will help keep them accountable, and give you more confidence in development expectations.

7. Software developers are inexperienced, and code quality is poor

The biggest complaint from offshore development is the quality of the work being produced. The old idiom, "You pay for what you get," couldn't be more accurate when it comes to software development. The reason why it costs so much to build products is because it requires high technical skills, a lot of time, and years of training. 

If you're taking your product development offshore you need to verify the skill and competence of the team you're working with (just as you would in the United States), and if you're quoted a cheap price, you need to expect the quality won't be worthwhile.

8. Poorly written code is worth less than good code

Business-owned software is very important, especially if you own the IP (intellectual property), because it can raise the value of your company. Just having the IP isn't enough to increase value, however, because nobody wants to own something that's going to inevitably break. To own something worth owning, you need high quality code that can be passed onto a new owner with few issues and little effort.

8. Taking legal action is more complicated when working with an international team

It's much more problematic to involve the law if you're dealing with contracted company from another country. Nevertheless, if a legal problem arises, immediately contact lawyers, and discuss your options. 

What if offshoring is your only choice?

It happens. Sometimes the decision is out of your hands, or the cost-effectiveness mitigates the risks listed above. There are many circumstances where offshoring your software development is a good idea. 

If you're going to engage in software offshoring there's a couple of things you can do to minimize the risks listed above:

1. Use expert consultants to build the strategy, architecture, and documentation for your software 
2. Communicate your strategy to the offshore team with a pre-made blueprint of the product
3. Set milestones for your project, and maintain regular communication with a project leader

Then sign.

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