Why Offshoring Fails

Quality as an objective has diminished as companies have jumped onto the offshoring bandwagon, subscribing to the idea that this type of development is both cost-effective and efficient. However, reality says something different. This approach often leads to miscommunicated requirements and subpar results where you are left with a product that doesn't meet expectations. This forces you to either cope with the flawed outcome or abandon the project at a substantial loss. Abandoning your investment is rarely appealing, so companies often end up spending more money on ongoing support for buggy software. In the end, you spend much more than you should for an inferior product. We have seen this scenario play out repeatedly over the last couple of decades.

To be fair, some projects do succeed, but the success rate is poor. By offshoring, you leave your success up to chance rather than building something that guarantees an advantage over your competition. Quality software is still a noble objective and is achievable despite the widespread shift towards the “cheaper” offshoring model.

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​What Makes Offshoring Risky & Ineffective?

1. Communication Gaps: The distance and language barriers create significant communication issues. Misunderstandings and delays are common, leading to misaligned expectations and outcomes.
2. Overhead Costs: Larger consulting firms often sell you on the idea that increasing headcount will speed up the project. However, this adds unnecessary overhead, making the process less efficient. Smaller, more focused teams are often much more effective despite what they may have told you.
3. Cultural Differences: Different working cultures and time zones can lead to misaligned work ethics and expectations, further complicating things.
4. Lack of Accountability: When working with offshore teams, accountability can become diluted. A good team will feel a sense of self-responsibility for the product they are creating, but that is difficult to have when they feel so far removed from their client and the people they are trying to help. This is escalated in cases where your team is scattered around the world. All the other barriers listed here expound on this problem.
5. Hidden Costs: While hourly rates may be lower, hidden costs such as extended timelines, additional management, and other overhead can quickly add up, making the project more expensive in the long run.
6. Quality of Developers: There are certainly quality developers all over the world, but since you are so far removed, you may be leaving this crucial aspect up to chance.

The Solution: Local Agile Teams​

Local teams well versed in agile practices working together in a cohesive environment offer a stark contrast to the pitfalls of offshoring. Here’s why:

1. Direct Communication: Being in the same location allows for face-to-face meetings as needed, real-time collaboration, and immediate feedback. This minimizes misunderstandings and ensures everyone is on the same page, reducing the communication gaps that plague offshore projects. Agile practices rely on such direct and continuous communication.
2. Empowered Teams: Local teams can take full ownership of their work, fostering a sense of self-responsibility and accountability. Teams learn to manage their progress and quality standards leading to a lack of the need to micro-manage.
3. Cultural Alignment: Sharing the same working culture and time zone eliminates the friction caused by cultural differences and asynchronous communication. This alignment leads to more cohesive and efficient teamwork, which is essential for agile practices that rely on close collaboration and quick iterations.
4. Stronger Team Dynamics: Working closely together fosters a sense of camaraderie and teamwork. This leads to higher morale, better problem-solving, and a more dedicated effort towards achieving the right results. Smaller, focused teams can be more effective and agile, avoiding the overhead costs associated with larger offshore teams.
5. Consistent Quality: With local teams, you have better control and insight into the development team, ensuring that you get skilled developers who are committed to delivering high-quality work. This reduces the risk of leaving the quality of developers up to chance. Agile practices emphasize continuous improvement and high standards of quality.
6. Long-term Relationships: Building a local team allows for the development of long-term working relationships, which can lead to more consistent and reliable project outcomes. These relationships are harder to establish and maintain with offshore teams. Agile teams benefit from stable, long-term collaborations that enhance their effectiveness over time.

​Investing in local agile teams is not just about avoiding the pitfalls of offshoring; it's about ensuring the success and quality of your projects. By working with a local team that embraces agile principles, self-responsibility, and self-organization, you can build something that is truly excellent and that you can control better over the long-term.

About Latitude 40

​​Latitude 40 integrates experienced on-shore software development professionals into your organization, forming collaborative teams with or without your existing developers. Together, we identify needs, create tailored software solutions, and instill best practices that drive continuous improvement and ensure agility.

Stop gambling with your software quality. Build with a local team you can trust.

About the Author

Andrew Anderson is President of Latitude 40 Consulting and a seasoned .NET developer with over 20 years of experience in Agile software delivery. He helps businesses build high-quality custom applications by forming collaborative, onshore teams that apply Agile principles to improve communication, accountability, and long-term success.