With the initial successes in offshore manufacturing, many businesses started offshoring application development services including initiatives such as programming, testing, and technology research & development. The primary benefit was to save on the labor costs for IT professionals. Overshadowed by product quality, delivery timelines, and piracy issues, the labor cost savings are becoming a perception. The reality is that offshoring software development costs more than local development. As a result, more companies are rethinking whether they should keep their development projects overseas.
In 2010, President Obama founded SelectUSA to facilitate job-creating business investment into the United States and raise awareness of the critical role that foreign direct investment plays in the U.S. Economy. Our company, Invonto was invited to the SelectUSA forum in Washington DC in June 2014. We represented the professional services industry, shared our experience with offshoring and explained the benefits of keeping software development in the U.S.
If your business is considering offshore software development versus U.S. based, consider the following before making your final decision:
Quantifying The Hidden Costs Of Offshoring
When it comes to software development, the cost of IT personnel is not your only cost. Hidden costs develop as a result of differences in efficiency and productivity levels of overseas developers. Additionally, overhead to manage remote teams, software quality issues and project delays result in higher costs overall. It can be difficult, but it is critical to consider how to quantify these unknown costs.
Offshoring Development Presents More Skill Gaps
Many businesses struggle with finding the right talent needed for their project. You might assume they don’t have a choice but to offshore software development. However, resources like LinkedIn and Apps Inc. can be utilized to build a U.S. based development team. Whether you choose to outsource or build an in-house team, you’ll find a large pool of multi-faceted developers in the United States.
The United States is not only the main market for software technologists, but it is also the main institute for producing highly skilled talent. U.S. based developers continue advancing their skills at a higher rate than anywhere else. Businesses that invest in training U.S. based developers benefit by retaining projects and skilled talent. In most cases, companies sending work overseas compromise on skills and performance requirements. However, these requirements are a critical expectation of U.S. developers. In addition, U.S. developers go through a rigorous multi-phase interview process, while overseas developers are hired through business managers. The reality is expectations from overseas programmers are directly related to the rate of their pay.
Skype, Slack, And Email Can’t replace Face-To-Face
Many of our digital communication tools eliminate boundaries and reduce distances. However, nothing can replace working directly with a project manager, being steps away from your team, or easily meeting with stakeholders. Based on experience, the best results come from face-to-face collaboration teams. It accelerates requirement reviews, design decisions, and problem-solving while substantially reducing management overhead.
Offshoring Work Means Troublesome Time Zone Differences
When offshoring software development started, overseas firms worked during the U.S. time zone, meaning the overseas developers were working very late evening hours. As demand for overseas programmers increased in their local markets, they could work during their local time zone offering U.S. based companies very limited time zone overlap. Over time, the time zone differences adversely impacted product deliveries, communications, and collaboration efforts. To compensate for this, U.S. based program managers extended their normal work days. As can be expected, this impacted their productivity and motivation. Delays of any kind, can damage a brand promise, negatively impact customer loyalty, and/or reduce bottom line profits.
Please Reconsider Before You Offshore Software Development
Something else to consider is the protection of your IP. How will you protect your IP from the potential dangers of offshoring development? How will your business handle product quality issues? What will the long-term impact of dependence on overseas labor have on your business? As outlined above, the true cost of offshoring includes many intangible non-quantifiable costs. Email or call us today to learn more about the benefits of hiring U.S. based software developers.
After Invonto’s presentation at SelectUSA, we continue to see more companies opting to use U.S. based technical resources instead of offshoring. In fact, we’ve worked with a number of companies to recover their failed projects they started with an offshore development company and help turn those around successfully.
Invonto’s team has experience delivering digital solutions for some of the world’s top brands and Fortune 500 companies such as Transamerica, Sealed Air, Epicor, Federal Reserve Bank, InterCall, YMCA, America’s Got Talent, D.R. Horton, Party Rental Ltd., JF Shea, Southco and others. Our mission is helping enterprises solve their unique business challenges and improve their business performance using innovative digital solutions. Our expertise includes developing turn-key enterprise software applications, mobile apps, cloud apps, and IoT apps. Get in touch with us for a free initial consultation on your project.