Conventional wisdom maintains that offshoring costs less, but conventional wisdom is not always right. The fact is, hidden costs in offshoring cannot be avoided and there are many advantages that can be realized from onshoring instead. From quicker deliveries to higher quality solutions, an onshore development model offers many benefits:
1. Significantly Reduced Time-to-Market
Utilizing an iterative application development methodology such as Agile allows businesses to more rapidly go to market. Offshore models rely on a Waterfall approach out of necessity. This classic software development methodology gathers all of the requirements then generates all coding and testing through to completion with minimal client input. To “seamlessly” work around the clock, information must be passed back and forth between teams. When feedback is given as one part of the process, not as an integral evaluation point throughout the process, the velocity for time-to-market is slower because rework will be necessary to meet the needs and expectations of the customer.
On the other hand, if you follow an Agile methodology, requirements are gathered, coded, tested, presented, and revised in a cyclical pattern through to completion. Clients can address major concerns and respond as development occurs, resulting in less rework. The most significant factor that negatively affects time-to-market is rework.
2. Short and Long-Term Cost Effectiveness
Despite the common perception, onshore projects cost half as much as offshore projects. High offshore staff turnover results in the necessity of additional management overhead. Turnover results in project delays and the likelihood that knowledge transfers between staff will be inefficient. This typically affects the consultants’ dedication to your project as well, since they will be unfamiliar with your business requirements, culture, and priorities. Additionally, they will not see rework as a bad thing.
3. High-Quality Process That Delivers Better Results
A concentrated pool of easily accessible talent enables consistent, high-touch, high-quality deliverables. Following variations of Agile, projects can transition from development to support faster when onshore consultancies are able to create, track, and manage support issues from inception through closure.
4. On-Site Readiness for Unplanned Issues
If you have a critical issue, onshore teams can be at your location within hours, not days. The quick deployment of team members allows you to rest assured that if your project requires in-person interaction, you are not waiting for business hours or international travel.
In general, offshoring is an inflexible setup. Despite an often present willingness to “make it work,” the realities of time zone differences, communication difficulties, and inflexible processes limit how well offshore consultants can adopt client processes, tools, and methods.
5. True Support from Experts
Development resources are available in onshore consultancies to assist support teams with complex issues because their expert consultants have been trained extensively and have had longer tenure at the company. Additionally, if issues need to be resolved at a product level, onshore consultancies can leverage relationships with other onshore vendors.
6. Reduced Risk from Start to Finish
Overall, the onshore model presents less risk. Misinterpreted requirements, unfamiliarity, ineffective response during critical situations, and the realities of being geographically distant make offshore the riskier of the two options.