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8 Common Misconceptions About Offshore Software Development

To say that offshore software development has suffered a credibility crash would be a severe understatement. Decades of cheap code and crashed projects continue to hamper cooperation across borders till this day, making companies believe that  building a team of developers in countries like India and The Philippines is not a wise move.

But the industry has turned a corner. Offshoring has started afresh on a path of innovation, transparency and impeccable personalized software development, and companies abroad have lots to gain from participating in this new era of software development.

Let’s tidy up the misconceptions so we can begin with a clean slate.

1. The quality of developers is poor

When developing software, quality is everything. A poor UI bounces away customers, so it needs to be simple, intuitive and efficient.
To this end, we need talented engineers in the software development industry and designers who understand the value and importance of a superb product. The ones who can differentiate between great and excellent.

However, with the shortage of developers tormenting Europe, many have ventured offshore in search of a reliable product development process. But whether in Latin America, Africa, Eastern Europe or Asia, people took the consultancies at face value and wound up with a product in shatters.

Not surprisingly, this has meant that offshoring has been equated with low-quality software developers. The offshore industry latched onto the cheap software craze and got really good at undercutting each other by finding super cheap and hence low-quality developers.
But when picking vendors, people forgot to factor in that cheap and cheaper means two very different outcomes.

As a Westerner, it can be hard to understand that $500 a month can completely alter the entire format of your offshore experience. $500 a month means a developer working for your local tailor and $1000 means that he’s working for Google.

Many assumed that finding developers meant following the same step-by-step blueprint they used at home. But everyone sources and recruits differently and finding talent is not a static process. Every country has good and bad software developers, and every country has a way of separating the sheep from the goats.

2. The prices always spiral out of control

In the same vein, pricing became the bone of contention. The salary of the guy was x so you had to pay y. And then came the laptop, the monitor, the internet, the rent, the lunch, the coffee and the air conditioner. You became the official sponsor of a back office in remote Columbia, and suddenly the developer wasn’t so cheap after all.

British HM Revenue and Customs got their software trapped in a nasty outsourcing deal with outsourcing firm, Concentrix. The company raised its rates from 3.9% to 11% and HMRC nearly trebled payments resulting in a loss of £20.5m. Furthermore, HMRC had to pay out £86,815 in compensation to people who had their credits wrongly withheld.
That is just one horrid example of the scale of financial extortion resulting from the failure to place a deal under scrutiny. So blindly trusting an offshore vendor is a really bad idea as the HMRC example so accurately demonstrates.

But not all vendors operate according to such unfair schemes. The way to circumvent situations like the one HMRC endured is to find a vendor who values transparency and who is happy to walk you through all the financials. Financial transparency should be incorporated in the contract so you have something to show for it.

3. Communication barriers everywhere

When most people imagine a Skype conversation with a developer abroad, it’s rarely flawless vocabulary and impeccable grammar that comes to mind. Instead, we picture being entangled in a conversation of awkward pauses and English as a fifth language.

There is no need to pretend like all developers have English as their native language or a major in English literature but good communication skills can be found anywhere if you know how to look.

When we think of offshore software development, we imagine factory-style assembly lines of non-verbal execution but that is not always how it works.

Today, we can be in charge of who we hire offshore and what skill sets they should possess. Communication could be one thing to add to the job description.

4. The cultural differences are insurmountable

Whole libraries could be filled with books about cultural differences and how to overcome them. Non-verbal communication, sense of humour and alternative worldviews all blur the clarity of the important conversations and negotiations.

But the world is more elastic than we give it credit for. Youths in Sao Paulo listen to the same music as those in New Delhi and globalisation has accelerated the circulation and blending of social habits.

We all watch the same films, wear the same clothes and all dream of the iPhone 8. In other words, there are more commonalities than differences and often it is about what we decide to focus on.

5. Time difference means we can never speak directly

Admittedly, a 10-hour time difference makes working directly together somewhat difficult. Email exchanges become slightly protracted and Skype calls must be carefully planned.

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There are shared opinions about the pros and cons of time difference depending on the model and size of the offshoring operation. Some certainly see the benefits of sending off a task late evening to see it completed by the time they’re back in the office the next morning. For reasons of process, others require the developers offshore to be an extension of the onsite operations. And thank God, there are ways to achieve that too.

Time difference is, not surprisingly, geographically specific. The time difference between France and India is 3.5 hours, a discrepancy that can easily be corrected with a tweak in office hours.

6. The distance complicates cooperation

Many companies pick the onsite option because the idea of the geographical distance becomes too overwhelming.
There are certainly great benefits to working closely together and there are reasons why we set up an office, to begin with.

But the world is witnessing a significant increase in and popularity of remote work whether in the same country or across borders. This has been rendered possible by the numerous tools built to open communication channels full throttle. Examples are Google Hangout, Slack, Trello, Skype, Dropbox, GitHub, and Asana. These are just a few among many that make remote communication that much easier.

Many companies have managed to set up large-scale operations and even small teams where communication flows with ease. It is an irreversible trend that needs to be embraced as we embark on the future.

7. I have no ownership

Offshore software development has long been equated with a lack of ownership and there is an abundance of examples confirming that point.

On the other hand, the level of ownership will always be model dependent. If we outsource a project to a third party, we automatically resign our claim on ownership to the project manager. This is the reason so many large corporations have chosen to set up a captive centre or used the BOT model.

We are free to choose the level of ownership we wish for our operations. If the operations are at the core of our business, there is a great reason to ensure strong ownership. If the task lies on the periphery, it is easier to relinquish some managerial control.

8. All offshoring companies are scammers

This view is no doubt the biggest obstruction to successful offshore software development. For decades, cheap software became the number one reason for setting up operations abroad. But cheap software equals rubbish products and that is, in essence, the only relevant takeaway from the decades of disastrous code.

We compiled a 7-step evaluation sheet for checking the credibility and value of offshore vendors and in fact, it is somewhat manageable to detect if there are any fishy aspects to the offer.

Like other companies, offshore software development vendors have everything to gain from securing successful operations for their clients so with some proper research, we should be off to a great start.

Generally speaking, there is no smoke without a fire and that is equally true for the offshore software development industry. There are many offshore software development mistakes, but for this industry, the problem has been that smoke continues to linger in the air despite the fire being extinguished years ago. The new chapter of offshoring has begun and there are great benefits to reap from it.

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