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Hi Bracha,

My wife and I read and enjoy your column every week. We run a business and are contemplating creating a software program to better serve our clients. We’ve discovered that it’s much cheaper to hire an overseas team to develop the product and we’re very much considering that. Are there any disadvantages to hiring a team outside the U.S.?

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A U.S.-based team was our first choice, but the difference in price is significant and we’re trying to be as economical as possible. What would you advise?

S.Y.

 

Hi S.Y.,

I’m glad you and your wife enjoy this column. Many companies struggle when grappling with the “offshore vs. local” question. It’s difficult to give you advice without knowing the details of your business and the complexity of the program you wish to build, so I’ll address the issue in a more general sense.

One of the main reasons business owners choose offshore development teams is cost. You can get high-quality offshore developers for a fraction of the price you would pay in the U.S. Due to the lower cost of living and suppressed wages in places like Ukraine and various South American countries – all of which boast a highly skilled technical workforce – experienced and knowledgeable developers can be acquired on the cheap. It has, therefore, become increasingly popular to hire offshore developers to complete a software project.

That being said, taking this step is not without risks. The finished product will be what the project manager and developers understand it to be, not necessarily what you had in mind, so communication is crucial – and overcoming the time zone and cultural and language barriers should not be underestimated.

The biggest downside to hiring an offshore development team is the lack of control that you, the business owner, have throughout the process. You’re just not there to physically monitor the team, watch their progress, and ensure they are working and doing things as you see fit.

There are ways around this, of course. Hiring a project manager that you trust to oversee the project and frequently traveling overseas to see your developers at work can give you some measure of control.

If you choose to hire an offshore development team, it is integral to put processes in place which give you a level of comfort and ease, such as joining their Slack, Trello, Azure, Jira or Skype groups to monitor progress and scheduling daily or weekly check-in calls, in addition to ensuring that whatever agreements have been signed are enforceable wherever the offshore team lives.

You can also hire a U.S.-based company that specializes in software development. It would be responsible for managing the development team and ensuring that the agreed-upon minimal viable product (MVP) comes out in a somewhat timely (since tech products are often delayed) manner. Such companies are also close by so, if a problem arises, you can easily pick up the phone or travel to their office and resolve it.

Unfortunately, hiring such companies tends to be a costly endeavor. Even if they have offshore developers, as many companies do, they still have to pay the management team in the U.S. and make a profit from the project. If you choose to go with such a company, it’s a good idea to be clear on the details of the product before you start. It’s generally difficult – and expensive – to modify the scope mid-project.

A third option is hiring individual developers and creating your own team, whether in the U.S. or overseas. It’s more work. And you’d need to have a certain level of technical expertise to ensure the people you choose have the right skills for the project. Companies often take this step for small projects – which necessitate only two or three developers. Companies that are constantly creating/upgrading/working on tech projects and therefore need an in-house team also often choose this option.

Whichever option you choose, it’s imperative to research the company or, if you’re hiring individually, the developers. Call references. Speak to people who have used them previously. And remember, even if you’re working with a company, you may be able to interview and choose available developers within its network, so you’d still have “your” team.

I hope this clarifies the “offshore versus local” dilemma for you a little bit. I wish you the very best in your future endeavors.

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