Hiring an offshore team is frequently heralded as a great idea cost wise, however it does not come without risks and caution. Offshore development teams can often end up costing more money, resource and time then was intended.

It’s not too different from a building or renovation project. The cheaper option might seem like a good alternative but, less attention to detail paired with contrasting differences in the client-contractor objectives can lead to more headaches than intended.

Below is an outline of the major key reasons to avoid offshore app builds.

The biggest reason to engage local teams: Duty of Care
Local teams understand the market, trends and can spot advantageous changes in direction. Offshore teams do not have these kinds of instincts as their main objective is adhering strictly to a project’s scope in as little man hours as possible. This duty of care and considered effort present in local teams provides a lot more flexibility which encompasses better management, communication and collaboration.

Development costs appear to decrease, Management costs increase.
The shiny appeal of lower build costs is a false positive. Overseas development teams need to be babysat. Someone in your team locally will have to put in additional hours to manage the build process. If time differences are an issue, this person or team, will need to be working after hours to ensure the project is on track.
Furthermore, if a junior staff member is tasked with management, more senior resource will need to oversee key complex decisions as junior members will not necessarily understand underlying complexities existing in the project.

A fallacy: Faster, dedicated teams
“Offshore teams are primed to build your app to the specs in record time”. This is often not the case. Your build is often just one project in a sea of many where fast completion rates are the primary goal. Instead of flagging issues, like a local team would do, offshore teams tend to rush through projects to tick them off the list. The knock on effects are huge with mistakes occurring, things missed and to right projects they may creep outside of the initial scoped work, leading again to increased costs and resources.

Time differences can impinge progress
Sometimes a project requires immediate answers from a team. Without immediate access and mismatched time differences, simple project issues can go on for inordinate amounts of time further leading to increased cost and resources.

Difficulties in communication and losses in translation
Cultural and language barriers can increase development times. Detailed elements and basic local assumptions that are often lost in translation further increase the need for detailed and checked documentation. Having these safeties such as detailed documentation is necessary if a larger problem does arise to ensure that client is protected.
However, because of the large amount of work that detailed documentation requires, this often gets overlooked in the excitement and rush to commence.

High turnover in foreign app sweat shops is a reality
There is a likelihood that the person who begins your project may not be the person who ends it. Offshore teams, particularly in Asia, are notorious for their 20%-50% turnover rates. With the threat of having to re-brief new individuals who come on to the project and the need to re-establish relationships, headaches and delays are rife with such unpredictability.

Data and IP at risk
Companies that go ahead with an overseas build are 31% more likely to experience data leaks or IP loss. Even with NDAs secrets can still leak and once a secret is out, it’s out and there is little one can do to stop the damage.

Offshore development doesn’t come with tax breaks
Various domestic incentive programs may mean that a local build actually ends up cheaper than an overseas one. It’s important to check whether your business is eligible as a local build has the propensity to be much more agile than an offshore one.
Conversely offshore builds may come with increased taxes due to the policies of the country in question.

The summary table below reviews that main pros of offshore development with their associated cons that have happened to many a business that has attempted an overseas build.

Apparent Pros Associated Cons
Lower costs More management required locally to ensure offshore team is staying on brief with increased risks in IP security.
Faster development times Can be riddled with bugs and issues due to poor management and lost in translation issues, eventually leading to longer development times.
Time differences means we have more hours in the day Not necessarily. Ongoing back and forth conversations, as well as mismatched time zones can lead to answers and progress taking weeks on a simple problem, instead of days.
Avoid local taxes and charges Offshore countries may have their own policies which actually lead to increased taxes in the country of choice, when there may be beneficial tax concessions locally.

The bottom line when considering an offshore versus local build is ensuring that the right knowledge and infrastructure is in place to manage these projects. Local projects often excel because the appropriate experience enables added insight and intuition that offshore teams do not have the capacity for, nor is it something which they dedicate any time to.

Sources
10 things you should know about working with an offshore team, By Jerry Loza, Tech Republic, August 12, 2008
Building an app for your business: Should you go onshore or offshore? By Robbie Adams, Startupsmart, March 11 2015
[Infographic] Full Speed Ahead with Offshore Development, Moka5, September 6 2013
Should I Offshore My Company’s Mobile App Development? By John Houghton, MobileCast Media, January 6, 2014
Tale of a Costly Offshore Mobile App Development Experience, By John Houghton, MobileCast Media, January 7, 2014
The True Cost Of Offshoring Your App Development, By Jordan Edelson, Forbes, May 29, 2014