OFFSHORING – MYTHS, MONEY & TIME

While businesses have been outsourcing IT workloads for decades, the internet age has witnessed a marked surge in the number of organizations looking to form development agreements with outside partners. Advancing countries throughout Asia and Eastern Europe have become prime destinations for American companies allured by cheap software development labor. India, in particular, has emerged as a global leader. Other top offshoring locales include China, Ukraine, and Vietnam.

Blinded by attractive rates, some clients rush into these relationships without first grasping the significant disadvantages that can arise with utilizing overseas development. Analysts estimate that “50% of offshore outsourcing contracts signed by North American companies fail to meet their expectations. Through their offshore journeys, companies often realize that expected cost savings are much smaller, and problems are more difficult to address in comparison with co-located development.”

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OFFSHORE DEVELOPMENT – FACTS, MYTHS & RISKS

The number one reason companies choose to offshore development is usually “cost savings.” According to PayScale, American software developers earn an average of $70,000 per year, a whopping $63,000 more than a typical developer in India who makes just $6,700 annually. But what is the true cost of offshore development?

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Onshore – The New Wave In American Software Development

As digitalization increases, more companies are turning to development shops to handle the complexities of software creation. In fact, we recently published a post discussing the pros and cons that businesses face when hiring an outside firm to supplement development projects.

While our original article highlighted the differences between offshore versus onshore, costs versus expertise, and outsourcing versus outstaffing, this article will focus on the rise in onshore outsourcing and how American companies are benefiting.

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Outsourcing – Weighing Opportunity and Project Costs

Simply put, outsourcing is the process by which one firm hires a third-party to fulfill one or more of its business needs. In the world of software development, outsourcing is on the rise. As you’d imagine, the right vendor can provide an enormous advantage to your company. However, choosing a development partner that fits your organization isn’t a simple, straight-forward process.

For example, there are factors such as offshore versus onshore, costs versus expertise, outsourcing versus outstaffing, and many pros/cons upper management should weigh before a final decision is made.

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5 Reasons You Might Need A Software Development Partner

Developing new software is often compared to scaling Everest. While thousands have conquered its rocky peaks, the success of every journey is largely attributable to the skilled guides who accompany the climbers.

In the fast-paced world of software development, firms like ours are here to serve as your guide. Software development partners such as Techtonic help companies bring their software projects to life while cutting cost and providing flexibility.

In this article, we’ll discuss some of the ‘hidden’ benefits of outsourcing to our Denver onshore software development teams.


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