Tipstat Blog

What are the Issues with Offshore Software Development?

1. Cultural Differences

It has been scientifically proven that people from different regions react to the same situations in different ways. And the reason for this is the cultural differences.

For example, Asians can’t tolerate direct criticism even if they are wrong. The client has to find a convenient way to present what went wrong. But the European culture is comparatively open to criticism.

The cultural differences between Asian countries and European countries are entirely different. In a research study based on the behavior of Indian vendors and german clients, it was found that the Indians are weak in saying “no” to several situations.

It further explains that offshore developers in India have a tendency to offer a service attitude due to which it is difficult for them to say no to something or to tell a piece of bad news. This can be bad for software development.

The cultural differences impact interactions, communication, interpretation, understanding, productivity, comfort, and commitment.

2. Expecting the Impossible

If your client is coming from a different working domain other than software (like the wooden industry that needs an e-commerce site for their finished products, logistics, travel, and tourism, real estate, etc) industry, then their understanding of the software workflow may not be identical with yours.

The client logic about the whole process can be similar to “press the switch and the lights are on!”. If your client is putting forward an idea that is close to impossible, then the project can get stuck in the early phase itself.

3. The ‘Long Distance Relationship’ Issues

As you go out of your country or continent to find out the best third party partner for completing your project, there is another factor that you should be worried about. The time zone!

Let’s talk about the USA and India. If you are based in the USA which is almost 9 hours and 30 minutes behind India, then your active working time has to be rescheduled for the betterment of the project.

In case the Indian offshore software development company provides you a sample data based on the instructions mentioned, and if the delivery time is between 9 am to 6 pm (normal Indian office hours), then you would be probably sleeping (11 pm – 8 am)!

However, if the sample provided needs to be modified, you have to analyze it and should provide detailed feedback. Again, by the time you provide feedback, your third party partner firm would have logged out.

So it can take roughly 12-24 hours to complete a communication cycle unless one of the two becomes flexible and agrees to follow the same time format.

4. Lack of Requirement Clarity

This is a major issue that needs complete attention. If the project is yours, then it’s quite easy to describe each of the project goals and requirements without any confusions or hesitations.

But if the project is for your client, who hasn’t provided a perfect description of the project, then the chances for the project to become close to worthless is high.

The first thing to make sure of is, whether you have the precise knowledge of the requirement. The second thing is you should share the requirement with detailed instructions to the software outsourcing company.

If you fail in any of this, then the project can fail miserably.

5. The Cost Issue

The whole idea of software outsourcing was mainly because of the cost advantage. But what happens if the cost surpasses the estimated limit? Yes, it’s a big problem!

Normally, offshore software development works are calculated in a rate per hour method. But the lack of experience in the stream increases errors and software testing time unpredictably.

If the actual work can be done in under an hour, the errors can delay the work for days or even weeks! And the cost per hour can exceed the budget limit.

What are the Solutions?

1. Overcome Cultural Differences

This is one of the most important topics to deal with while choosing an offshore software development company. Especially, if the project is handled by a group of people from Europe as well as Asia, the difference in culture will be evident.

The Asian culture tends more to work based on well-documented guidelines whereas Europeans are more into logic-based documentation. Effective communication is a key factor in such heterogeneous groups. Adjusting meetings based on team timezones is also important.

However the most important of all is to understand the common goal of the project. One has to make sure that they as well as the team members are on the same page of project workflow.

Setting up short milestones in the road map and a detailed evaluation of the milestones after their completion can be very helpful. Sometimes offline meetings can help reduce confusion in understanding the goal of the project.

2. Does this Project Need Outsourcing?

This should be the first question in your mind while analyzing the project in your hand. The project analysis should be based on variables that can influence the completion and profit of the project.

The size of the project, the average time needed for the completion, nature of the project, various costs related to the project, etc are some of the factors that have to be taken into account while calculating the scope of the project.

Once you cross-check the detailed report based on all these analyses, you will get a better picture of whether you need an offshore development company or not.

3. Choosing the Most Suitable Offshore Development Company

Once you have confirmed the need for outsourcing by analyzing the scope of the project, the next step to do is to locate the most suitable third party firm. There is nothing called the best firm.

Based on the nature of the project, you have to choose the most suitable outsourcing partner.

Let’s discuss some factors that can help identify the choice.

Value Over Cost

Consider two firms namely A and B. Outsourcing company A bids with $100 cost and B bids with $50. Now the easy way is to pick B over A based on cost.

But the right way is to identify the value of the A firm and B firm by running some background checks. Technology can help you to locate the previous works done by the firms.

If they have showcased successful projects similar to the one you have in your hand, then that firm is the best one for you due to the previous experience.

Also, you can try to get connected with their previous clients who can share their experiences with you. If the clients are available, you will be able to get details on their working nature, customer satisfaction, deadline keeping, and reporting.

Agreements

This is the most important part of the partnership. Since the project idea and related resources are of high value, having a legally bound agreement is a must.

Agreements make sure that you are dealing with a reputable outsourcing company and allows you to relax that your project is in safe hands. Ownership right agreement, Contract/Sow, Termination rights agreements, NDA(non-disclosure agreements), etc are some of the essential agreements when you deal with an offshore enterprise.

Do you want to outsource your software requirements? Connect with us today and build a reliable team of offshore developers easily!

4. Proper Project Management

Another important aspect to avoid outsourcing issues is proper project management. After preparing a full-proof SOW, the next thing should be preparing developer-friendly guidelines for the easy understanding of the project.

Guidelines can be made using powerpoints, documents with diagrams, data flow charts, etc. Such detailed documentation can help the developer to understand the project closer.

You can fix timelines by breaking the big project into small modules. Predicting a timeline for the complete project may be difficult. But it is easy to determine the timeline of the completion of each module.

There should be project meetings with the project handling team at regular intervals, preferably after the successful completion of each module.

Advantages of Offshoring to India vs other countries

Being first in the countries with most software companies that have ISO 2000 certification and second to the US in software exports, India undoubtedly is on the top list of countries favorable for offshoring.

The 2016 A.T.Kearney Global Services Location survey shows that India is the first choice for BPO. Let’s discuss the advantages of India over other countries in offshoring.

1. Cost

Indian offshore developers work for an average cost of $10 – $20/hr which reduces the complete project cost to a significant level. The high competition among Indian companies also creates a cost-effective platform for offshoring.

2. English Language Advantage

Thanks to the 200 years of British rule in India, the convent school culture taught Indians good English which makes them the best choice for offshoring in comparison to other offshore competing countries like Ukraine, Malaysia, and China.

3. Quality

Indian offshore developers are highly sought after in the software industry. According to NASSCOM, most of the FORTUNE 500 companies around the globe use Indian built software that shows the level of quality standards.

Also, the highly qualified and experienced experts make no compromise in software build quality.

4. Support, Maintenance, and meeting Deadlines

Indian offshore development companies offer extensive support to their software. Some companies offer a lifetime maintenance assurance with 24*7 support lines. Indian companies are well known for delivering software products before deadlines.

ISO and SEI CMM based work standards, timezone flexibility, commitment, stable and calm political environment, IT-friendly laws and policies, etc are some of the other significant advantages.

Based on a study by Evans Data Corp in 2013, there were approximately 2.7 Million software engineers in India. In short, researchers point out that India will overtake the US by 2024 to become the country with the largest software developer population.

5. Cost Analysis (the US vs India)

Australia is considered as the top paid country in the software industry around the world, and the US comes second in the list, based on Time Doctor, DOU.

Since India comes 9th on the list, it shows the relevance of the increase in the offshoring software business.

According to various job sites, The average annual salary for a software developer in the US is greater than 100,000 USD whereas the average annual salary for an Indian software developer comes under 8,000 USD.

Hence, by comparison, it can be seen that you have to spend an amount of 12-13 times higher for a US developer compared to an Indian developer.

References:

Guide to a successful offshore software development strategy