Offshore Outsourcing — is it for You?

I put together this short article to help answer a question many small software development companies and startups are faced with:“Should we continue (start) software development locally or consider expanding (moving, starting) offshore?”.

This article includes simple rules I typically use with my clients to help them reach an answer. The rules here do not cover all situations, but nevertheless can provide a company with an initial direction. Let’s dig in.

Here are several major scenarios when going offshore is beneficial for small software companies.

• Team Expansion. Company has senior technical, process, and product resources onshore and expanding offshore to complement the local team

• Unique Expertise. Company needs unique expertise that cannot be easily found locally but are available through an offshore vendor. The examples of expertise include specific technologies or domain knowledge.

• Previously Done Business. Company is expanding and company principals bring in an offshore vendor that they have done business together with in the past and completely trust.

• Prototype Development. Company needs to develop a prototype of a product or MVP (Minimal Viable Product) where delivery quality requirements are secondary (when starting on this path be prepared to rewrite the product in the future).

If at least one of the scenarios above matches your situation — then the offshore option could be beneficial assuming it is organized and managed efficiently.

If not — it may not be such a good fit. In other words, if you are a 2-person startup planning next Facebook and have decided to go with the cheapest offshore vendor based on a marketing email — think twice!

A word of caution. Even if you use the not expensive offshore vendor, you may still end up paying more than you would pay for a full scale local team. This can happen if key expertise is missing or efficient inter-team processes are not established. If you going offshore route — plan well!

Hope this helps

P.S. I intentionally kept the article short, feel free to comment or reach out to me directly if you interested in more details on the subject.

P.P.S. This article covers specifically Offshore Software Development for small companies. Outsourcing Software Testing, System Administration, Support, or Dev Ops is not in scope of this article.

About Author:

Alex Apollonsky has over 20 years of technical leadership experience in software industry. Throughout his career Alex served as CTO, VP Engineering, Architect, Technical Lead, and Technology Consultant across multiple companies and projects, holds several US patents, certified Project Manager and Scrum Master.

Attributions:

photo used courtesy of Patrick under Creative Commons License

I’d like to thank Dimitry Apollonsky for constructive criticism and help with the article preparation.