For someone who has never outsourced software development this might seem like a rather daunting task. After all...how do you get from idea to conclusion without having major hiccups on the way.
Business is all about proper execution of strategy...and you should treat your outsourcing approach the same way.
One of the first decisions has to be the geograpic which decision as to what type of outsourcing you want to pursue. There are 3 different categories of outsourcing available to you. Each comes with positives and negatives associated with their relative geographic area.
The table below provides some insight into some of the considerations you may want to entertain. The point of vies used is from a US perspective.
If you are based in Europe the geographic point of view provided below are obviously somewhat different.
Definition
|
The Pros
|
The Cons
|
Onshore
Any development
partner which resides in your country is typically considered an outsourced
onshore development
|
No cultural
issues which can lead to misunderstandings
Same time zone,
cooperation during the day is a breeze
Easy to visit
the development partner, domestic flight, train or car trip
Consequently it
is easy to supervise
|
Onshore development is the most expensive. Reputable firms easily charge well above 150 US-$ for contract work
Onshore software
development firms frequently outsource their work to offshore providers. As a
client you might never learn about it. Hence you might overpay.
In some cases
onshore firms are very much tied into business networks which are closely
aligned with your business. Ideas or concepts you deem as confidential are
leaking to other companies in your space. This can happen through staff
attrition or related development work
|
Nearshore
A company which
resides in neighboring countries with a time zone difference of perhaps up to 4 or 5 hours is usually considered
Nearshore. Examples are South America, Canada, Jamaica
|
The provider is
removed but you still have between 4 to 6 hours of overlap in the time zones,
enabling you to efficiently cooperate throughout the day.
Pricing will be
significantly cheaper than onshore pricing.
There is a
certain cultural alignment. Developers in nations mentioned as nearshore
providers are used to the US way of thinking.
|
Nearshore development is not a radical solution. It is more expensive than offshore development as such a lot of the advantages are mitigated.
Nearshore
provider are not easy to reach. Travel times are frequently more than 8 or 10
hours and flight is the only option.
Nearshore
providers might have significant language barriers.
|
Offshore
Offshore
Development is usually associated with development done on other continents
with significant time zone differences. Examples are Asia and Europe
|
Offshore
providers are usually the cheapest by a wide margin.
Not unusual to
find development companies with big product portfolios and a lot of related
work experience.
Because true
offshore development companies tend to be bigger in size they usually have
defined processes to manage a relationship
|
Offshore Development centers reside on the other side of the clock. Time zone differences are usually 8 hours or more.
The command of
the English language is often times average. Only Project Managers and Senior
Developers speak good English.
Work hours
usually only overlap up to 4 hours.
|
At the end of the day it really comes down to what the company is prepared to pay...and the trade off the company is prepared to accept if it decides to pursue a lower cost provider.
There is little doubt that onshore development is the easiest one to manage. The downside is of course that the expense is by far the highest.
Conversely, true offshore development in Asia is usually the cheapest. A lot of corporations are comfortable with offshore development and are prepared to accept some of the difficulties working with a company on the other side of the clock.