Differences Between Offshore and Outsourcing Software Development
Published: 2022-09-20 21:42:48

The 21st century is a time when we depend on modern technologies in every aspect of our lives. We don’t believe it is necessary to talk about this in greater detail, just take a look at how we use our mobile phones every day for a wide array of different purposes. When you translate this use to businesses, you will see that the dependency is much higher.

As a result, the need for hiring [software developers](https://potado.co/software-development-hong-kong) has reached an all-time high. There’s no business out there that doesn’t need at least one of these if they want to stay competitive in an already high-competition market. Contrary to the initial belief, the global pandemic of COVID has only made these processes faster.

Companies who want to stay on top need to reach out to some talented IT professionals who can help them with reaching the best possible results. One of the most significant trends of this sort is companies outsourcing or offshoring software development. Today, we want to shine a light on these two concepts and explain them in greater detail.

**Offshore Software Development**

Offshore software development means exactly what it does sound like. We are talking about a situation when a company hires teams from another country to develop a mobile app or website. That usually happens when companies have exhausted the options to find some local talent and make them a part of the team.

The evolution of the internet is what made this possible. You can work with anyone in the world from the comfort of your home. Also, other technologies, like cloud computing, make it easier to share numerous files and documents with people who live thousands of miles away from the company’s headquarters.
At the same time, offshoring can also mean that a company has teams in many different countries. 

For instance, there is a department in Poland that specializes solely in one aspect of the project. On the other side, a department located in Vietnam works on entirely different things. But both of them work in correlation. Another thing they share is that they are full-time employees.

**Benefits**

The benefits of this approach are numerous, but we would like to stick solely to the most important ones. One of the highlights of this method is that the development costs are significantly reduced. Especially in countries with high app development costs such as [Hong Kong](https://potado.co/blog/app-development-cost-hong-kong), [Australia](https://potado.co/blog/app-development-cost-australia), the [UK](https://potado.co/blog/app-development-cost-united-kingdom), [Malaysia](https://potado.co/blog/app-development-cost-malaysia), and [Singapore](https://potado.co/blog/app-development-cost-singapore). The reason is quite simple, the chances of foreign workers’ salaries being much lower is quite high, but you will receive high-quality work.

Governments who get foreign investment usually offer some tax benefits to the companies that want to do work in their country. Numerous experts on this topic say this is probably the most important advantage of this approach. The final one we want to touch upon is less stringent regulations in foreign countries.

**Downsides**

As is the case with any other concept, this one comes with a string of problems. Thankfully, overcoming them is not as challenging as it may seem at first. The most notable one is the social and cultural differences between people who don’t only come from different countries, but from different continents as well.

Thankfully, you can resolve this problem by implementing some international practices on how to conduct work in a certain industry. Another issue that might pop up is making the quality assurance procedure as good as it should be. Communication between people who don’t have the same work hours can lead to this problem.

**Outsourcing Software Development**

Outsourcing software development, even though it may seem similar to offshoring, is a completely different concept. The first difference is that those who are hired to do some work for the company will not be full-time employees. They are either paid by the project, or their work hours are measured through one of many software.

Another thing is that outsourcing doesn’t mean you are not creating a whole department of our company. Instead, you are hiring people to work on a certain part of the project. They can even work in correlation with some of the full-time employees you have, but they have a status that doesn’t make them equal to them.

When the project or that particular segment you needed help with is finished, then the teams are no longer needed. So, when you pay them their salaries, they are free to start seeking employment. Still, it is possible to keep a certain team as long-term support, but they will not have their status changed.

**Benefits**

Outsourcing comes with a [string of benefits](https://potado.co/blog/software-outsourcing-vietnam), but the one that has the most attention is the cost advantage it provides you with. Delegating a part of your project to a team outside of the company is a cheaper solution. You have to pay the salaries to the members of the team, but not other things that are characteristic of full-time employees.

Another one is that hiring an outside team is that you are focusing solely on their competence, and as a result, you will get the best possible product. Furthermore, labor flexibility is another important thing we want to address. People do not need to work for eight hours straight. Instead, they can create their schedule.

**Downsides**

The biggest downside of this concept is that you will not have complete control over the work process. Sure, communication is there to bridge this gap, but it is not possible to fill it. But when you employ people you had worked with in the past, then it becomes easier for you.

Another problem that can pop up eventually is the question of security. Protecting your business assets is crucial, but when you transfer files from a cloud to a cloud, there is always a possibility that something will go wrong. Either the security will be breached, or the files will be lost during the transfer.

**In Conclusion**

Understanding both of these concepts is of the utmost importance if you want to hire foreign workers online to [develop your mobile application or web platform](https://potado.co/app-development-hong-kong). Here, we’ve disclosed both of them in greater detail. We are certain you will find this insight informative and helpful in making any future decision of this sort.