Offshore Software Development; Asset or Liability

“The important thing about outsourcing or global sourcing is that it becomes a very powerful tool to leverage talent, improve productivity and reduce work cycles.” –  Azim Premji

Are you considering outsourcing your company’s software development requirements? If so, have you considered asking a foreign-based company to develop the computer application for you? As Premji states in her quote above, outsourcing your software development project to an offshore company certain has its merits.

However, this seems to be a contentious topic. Over the years there has been much discussion about the advantages and disadvantages of outsourcing your software development project to an offshore software development company.

Offshore software development: The distributed model

Before we look at the pros and cons of outsourcing your software development project to a foreign-based company, let’s understand exactly what offshore software development is.

In it’s simplest form, “Offshore Software R&D [Research and Development] is the provision of software development services by a supplier (whether external or internal) located in a different country from the one where the software will be used.” Moreover, I believe that this definition begs the question why you should use an offshore software development house to develop your business application. In a nutshell, the main reason is the higher development cost that the local software developers charge.

Let’s now add the definition of a distributed model into the equation:

A distributed software development model is a “software development model in which IT teams spread across geographical lines collaborate on applications or various software. These teams are often separated by mini-projects that are brought together for a final software buildout.

Therefore, when we combine these two definitions we can see that the offshore software development software model is an archetypal illustration of how international companies can connect and work together.

Pros and Cons of the foreign-based software development model


The standard arguments that detractors from the offshore software development model state are as follows:

  • Foreign corporations are unable to guarantee the quality of the product because they are physically situated in another country.
  • Even though English is the international business language, there are often challenges when it comes to communicating effectively with each other.
  • Overseas software development houses are often situated in different time zones, so it’s hard to synchronise working hours.


There are distinct advantages to employing an offshore software development house to design and build your application:

  • To retain a competitive edge in the marketplace, you need cut your overhead costs as much as possible while delivering a quality product to the market. Working with a foreign-based company will allow you to reduce your overhead costs substantially.
  • Some of the brightest minds in the world live and work in foreign companies. Ergo, you will be able to tap into these minds if you partner with an offshore software development company.
  • Working with an international company whose working hours are your sleeping hours can be an advantage. In a nutshell, it can shorten your software development timeline; thereby, giving you an edge over your competitors.

Final words

As with everything in life, there are always advantages and disadvantages to the distributed software development model. As a result, part of the decision-making process is to determine how you can manage the liabilities or risks. If you can manage the risks and turn them into assets, then your decision is made for you. On the other hand, if you cannot control the negatives, then it is better to choose another option.

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