Pros and Cons of IT Offshoring

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Published: 05 May 2021


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Before we dive into the offshoring pros and cons, let's answer an important question: What is offshoring in business? In layman's terms, it means having some of your internal business activities delivered on behalf of your company in another country. The most popular roles companies take offshore are software development, virtual assistance, payroll, data entry, administration, SEO, outreach, data research, customer support, and any other role outside the company's core competence. 

When it comes to offshore IT services, the most popular destinations are Asia (India, the Philippines) and Eastern Europe (Ukraine, Poland). These regions boast a wealth of professionals with excellent coding skills, high English proficiency, and strong work ethics. 

A business needs to understand the advantages and disadvantages of the offshoring work model before applying it in its operations. In this article, we take a look at the pros and cons of using offshore software development services. Read on if you're still on the fence, deciding whether or not to go with offshore IT services. 

Advantages of offshore development 

  • Reduce costs

Trimming costs is one of the most significant advantages of offshoring and offshore software development services in particular. Many companies include offshore development into their strategies to hire resources at a lower rate in countries with cheaper labor costs instead of adding expensive local specialists to their teams. 

With offshore IT services, you can get the same work done at a much lower cost. For example, hiring a developer in the USA or Western Europe will cost around $50–$250 per hour. The cost of an offshore developer ranges from $25–$50 an hour, depending on their skills and experience. 

  • Access skills you struggle to find in your location

 A variety of specialists with a wide range of backgrounds is one more advantage of offshore IT services. For example, Ukraine has a strong STEM education basis that lends itself to a large pool of skilled software engineers, making it an ideal destination for building a virtual software development team.  

  • Scale up and down easily

 Typically, offshore development units are easy to scale. If your project requires to bring in more hands, chances are you can do it within a short time frame, thanks to a vast talent pool. Offshore IT services can quickly find necessary specialists without affecting your business processes. Conversely, when you need to disband or reduce the team, you can do it on short notice as well. 

  • Help with your current project

Offshore software development services can scale your development team quickly. Unlike the outsourcing model, where a team takes on a project and develops it from the ground up, offshore development assumes that developers can step in at any stage of the project and bring it up to speed quickly. On the other hand, offshore development squads require a great deal of involvement on your part. Although it acts as an autonomous unit, your offshore team will follow your lead and interact with you directly.

READ ALSO: Getting Virtual Teams Right

Disadvantages of offshore development

Despite the numerous advantages, offshore development has several disadvantages as well. Below are some of the most common ones. 

  • Time difference

 Even in the technology era we live in, it can be hard to establish efficient communication between two teams located in different time zones. With this in mind, many companies choose to stick to the onshore teams, which gives them a sense of control. 

Yet, there's another way to look at the time difference - an offshore development model comes with a unique overlapping coverage. When two teams dedicate 8 hours per day, it equals 16 hours of work done on your project in 24 hours. 

  • Laborious management process

While the offshore development team will be fully dedicated to achieving your goals, you'll be deeply involved in the process as well, given that the client is always responsible for establishing the communication processes, coordinating the offshore development process, and eventually for the outcome.  

  • Communication barriers

Offshoring is a multicultural concept, given that the team members will have diverse communication patterns. That being said, offshore software development services should facilitate providing developers with in-depth language proficiency and a track record of being a part of an offshore development project. 

  • Intellectual Property 

Letting offshore IT services handle your operations can pose IP risks. Thus, it's a good practice to implement security standards and strategies on your side rather than relying solely on your offshoring partner, even if they've signed a Non-Disclosure Agreement. 

Offshore development with nCube

As a company that provides offshore software development services, we at nCube view offshore development as an extension of the client's business. Working with us, you'll run a virtual team in Kyiv, Ukraine, with direct access to your offshore development team members who follow your engineering practices and adapt to your company culture. Contact us. 


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