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August 4, 2020

Offshore vs. Onshore Development: Finding the Best Fit for Your Next Digital Product

So you have a new idea for a digital product, but who is going to bring that idea to life? This is one of the first hurdles new entrepreneurs run into as they move into the world of development. When a simple Google search can turn up thousands of companies promising to turn your idea into a digital product or MVP, it can be a daunting task to pick the right one for you.

One decision you will have to make at the beginning of your development process is: do I pick a local development team or an offshore team? Your developers could make or break your product and having confidence in who you pick is important. Many developers claim to be qualified and even have the right educational background, but ultimately how many successful projects have they completed?

This is an important decision and each choice comes with its own list of advantages and disadvantages. Throughout this article, we will walk you through each option so that you can make the best decision for your important digital product.

Offshore Development Model

Offshore development is unique in that your development is outsourced to a third-party agency or developer(s). Offshore teams can offer a wide range of services to help meet your needs and are based in a foreign country.

Offshore development can be done in a variety of ways: by an individual developer or agency, only outsourcing certain features/parts, or hiring a team of individual developers that will all work on your project. Which approach would work best for your product? The advantages and disadvantages can help you decide.

Advantages of Offshore Development

Lower cost: The main advantage of offshore development is the huge amount of money that it can save you. Due to the lower cost of living around the world, countries outside of the United States and Western Europe typically charge less in hourly rates. It’s usually easy to find an hourly rate that’s low for you and high for your developer, meaning that everyone wins.

Fast turn around: With offshore you can build your own team and hire them for just as long as you need them. Instead of signing a lengthy contract with a retainer, you can hire based on an individual job. While we definitely suggest signing a contract, ensuring that your money and ideas are protected, they can be far less complicated compared to an onshore contract.

Talent pool: With offshore development, you have a wide range of talent to choose from. You are not limited to the agencies around you or to one cost. Being able to talk with several developers to find the right option for you is definitely a big advantage.

Disadvantages of Offshore Development

It is important to remember when hiring offshore developers that just because they come at a lower cost, it doesn’t necessarily translate to a successful outcome.

Communication issues: With offshore development, you run the risk of having major communication issues. Due to time zone differences and varying working hours, your project could fall behind. If an issue comes up and you are not able to quickly resolve it due to communication issues, that is valuable time and money that could be wasted.

Fear of the unknown: Is your offshore development team properly vetted? “Working hard” could have different meanings for people in one country versus another. Even cultural issues and traditions could lead to unpleasant situations if not discussed beforehand.

High turnover rate: Does your team have a high turnover rate? If you spend time training your developers and introducing them to your product, then you don’t want them to quit halfway through. Research, research, research before committing to a developer so that you don’t have unknown fears.

Lower quality of work: While certainly not true in all cases, offshore development does have a reputation of not meeting the same quality of design and development as onshore. You don’t always get to see a portfolio of work before booking, which can lead to unwelcome surprises with the design and user experience when the product is complete.

Onshore Development Model

Onshore development is working with local developers or an agency to create your digital product. Onshore development typically allows you to meet your developers or project manager in person to talk through the whole process.

Advantages of Onshore Development

Location: One of the key reasons why onshore outsourcing is almost always a better option is location. When your development team is somewhere between a car ride or a quick plane ride away from you, you’re able to meet with them in person as often as you want or need. You don’t always have the resources to take an international flight with offshore and will have to rely on complete digital communication if your project gets off course.

Clear communication: With local development, you will have an easy and open communication channel. You are not restricted by language barriers or time zones.

Quick updates: If you notice something is wrong or needs to be updated on your product, you can easily and quickly express that need to your developer. Broken features or links can be detrimental to new products, but with onshore development, there is a greater guarantee that they will be fixed quickly.

Pick your team: Do you have specific requirements for your development, including that they have a physical office or a large team of developers with a highly targeted skillset? With local development, you can pick your team of developers with those needs in mind and have in-depth interviews to make sure they will be a good fit.

Disadvantages of Onshore Development

Higher cost: The biggest disadvantage when choosing onshore is cost. Clients will continually push for lower hourly prices, but developers’ salaries increase as they learn and grow. With the right onshore team, you really do get what you pay for especially when quality and user experience are considered. A higher price is to be expected.

Smaller talent pool: Although you will be able to choose your developers with your special requirements in mind, you can find the pool of talent smaller depending on your location. If you require a meeting with your developer in person, you could be limited by the number of candidates in your area.

Other Options for Building a Digital Product

Now that you know the difference between offshore and onshore development, let’s go through a few other options you have for your development. The right option is out there for your product, you just have to spend the time researching to find it!

Nearshore

If you are looking for the advantage of offshore development, without some of the major disadvantages, nearshore might be the right option for you. While offshore is typically overseas, nearshore is in the same hemisphere.

If you live in the United States, nearshore for you would be Mexico and Canada. While you will not get the same discounted rate as offshore development, hourly rates do tend to be cheaper when compared to onshore. With nearshore you will also have closer timezones, leading to an increase in collaboration between client and developer.

Offshore with a Local Project Manager

For clients looking for a less expensive option, compared to onshore, we would recommend offshore development with a local project manager. As a new entrepreneur, managing a team and creating your product can be confusing. With a local product manager, you can ensure that your thoughts and ideas will be correctly communicated to the offshore team and that your project will be kept on schedule.

A local project manager can help guide you throughout the entire process and create a less stressful environment. Instead of stressing about the development, you can focus on marketing and brand identity to help your product grow.

Finding the Best Fit Development Partner

Remember to look for a team that takes ownership, uses critical thinking, and objects to your ideas with reasons that make you change your mind. A team that puts on the mindset of “If this was my application…” or “If I were the user…” is far better than a team that sees you only as a source of money. Don’t pick a team who agrees to all of your ideas, but instead tells you the truth because they know your product is important.

In the end, each approach to development could have a successful outcome to develop digital products. Your decision is dependent on your unique product and the resources you have available. If you take the time to map out your goals, research, and talk with developers, you can find an option that will put your product on the path to success.

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