Software Development With Onshore vs Offshore Outsourcing

Explore The World Of Possibilists For Software Development With Onshore vs Offshore Outsourcing

Sakshi Shukla
August 22, 2022
Onshore vs. Offshore Software Development

Understand the Outsourcing Software Development Model 

Outsourcing software development is becoming popular within the software company environment worldwide. The software development outsourcing model involves recruiting an external team of professionals to handle a company’s software development projects. Depending upon the company’s requirements, they opt for hiring an offshore or onshore development unit responsible for overseeing user experience, project management, Quality Assurance (QA) projects, and coding.   

Findings & Benefits of Outsourcing Software Development 

Outsourcing tech invention is becoming essential for an organization’s success, but each model’s benefits are perceived differently across functions and organizations.  

As per Commit’s findings, while HR leaders see the top advantage of outsourcing as cost savings (48%), CTOs perceive outsourcing as a key to quickly scaling (42%). However, regardless of the position, the most significant matter in outsourcing talent is the quality of work (56%). 

As per Commit’s 2022 State of Tech Staffing Report, Software Development Outsourcing Will Grow 70% by 2023 which will further bring in changes in the way organizations function. 

Outsourcing Software Development

Outsourcing an offshore or onshore development team comes with its benefits. Let’s take a look at a few: 

Huge cost-saving  

When it comes to hiring an external team for managing your software projects, it definitely takes some load off from the Human Resource team. It is a fact that recruiting internal staff comes with multiple hidden costs. These might include health insurance, payroll taxes, leaves for various categories, social security, and other benefits, abiding by the laws of the country your business is set up in. 

Either you can outsource based on the size of your company. Small to mid-level firms hire individuals independently, whereas large organizations prefer collaborating with outsourcing partners responsible for covering the additional costs, including office costs, developer’s equipment, etc. 

With software development outsourcing, you only have to pay for the service package you opt for, which already covers the professionals’ payments and training. 

Less Working Space Needed 

Recruiting internal employees often means you would require a more extensive and sufficient working space to accommodate everyone. This might involve renting additional office space, expanding your current one, or building an entirely new commercial space from scratch, all of which will take time and money.  

You can avoid these additional costs by outsourcing to a 3rd party support team of professionals who already have covered all these parameters. 

Less Equipment & Utility Expenses 

Save costs related to providing tools and equipment to the external team of professionals, which are likely to be: 

  • Laptops & desktop systems 
  • Headsets and microphones 
  • Software platform subscriptions 
  • Office furniture & many more 

If you are planning to recruit an internal team, you’ll need to provide them with all the required equipment. Additionally, you might also need to upgrade your organization’s IT infrastructure to work smoothly. 

To be able to work with high productivity, you need to upscale every sector of your organization and save costs wherever you can; therefore, opting for outsourcing staffing turns out to be beneficial for many organizations to support their teams. 

Quick product-delivery times 

Outsource development partners with industry-specific proven track records can often increase your product-delivery times by supplementing your team or taking over an entire project. Since experienced development agencies are proficient in working on tight timelines & have pre-set systems in place to encounter any roadblocks to achieving success, it becomes essential to hire a good agency. 

An all-around glance at Onshore Vs. Offshore Software Development Models  

After planning to outsource any unit of your software development vertical, you’ll need to decide whether to go for a development partner from overseas, which is offshore outsourcing or choose one within your country, which is onshore outsourcing.  

Many searches have circled around the question of which is better, onshore or offshore outsourcing. As a matter of fact, both models have their advantages & disadvantages. The decision can be made based on your organizational needs.  

An experienced offshore agency offers tremendous market credibility and value; however, the only prerequisites are that the agency should be well versed in the universal language, preferably English & understands your work ethics. 

The prerequisites, as mentioned earlier, are not an issue for onshore outsourcing development partners. However, onshore outsourcing comes with its setbacks, such as high costs and hiring individuals from a small talent bracket.  

Let’s explore both approaches and identify the pros and cons of onshore outsourcing vs. offshore outsourcing. 

Onshore Software Development 

Selecting an onshore software development agency has both advantages and disadvantages. 

Benefits of Onshore Software Development 

1. Real-time collaboration 

Collaborating with an outsourcing agency within the same time zone can offer better opportunities for real-time collaboration since the time difference is never a roadblock. You might even have multiple windows for occasional live meetings. 

Few offshore outsourcing agencies also present a working model where they are willing to adapt to their clients’ work hours. However, not every offshore development unit is ready to function this way, so if that is an essential consideration for you, then be sure to ask prospective offshore development professionals if that’s an option. 

2. No language hurdles 

Since onshore development partners are from the same geography as you are, communication challenges arising from a language hurdle are typically not an issue with onshore outsourcing. 

3. Similar Industry regulations 

While selecting an outsource partner within the same country, state, or province, you’re far more likely to deal with professionals subjected to similar labor, taxation, and intellectual property laws. This will make the further process much easier and smoother. 

4. In-person discussions 

You can schedule live, in-person meetings if your outsourcing partner is within reach. With the new work culture introduced during the pandemic, we all have become so used to online meetings and remote working that in-person meetings might feel unnecessary. 

5. Understanding of local market 

If your business model serves a local audience, working with a local outsourcing partner implies that they will understand your market better than someone in another country. Make sure you choose someone who understands your work ethic and culture and has experience serving your market & industry.  

Disadvantages of Onshore Outsourcing 

Let’s explore a few disadvantages of onshore outsourcing: 

1. Higher costs 

Organizations operating in developed countries like the United States, and Western Europe, will be forced to pay a higher amount if they wish to work with developers in their home countries. Due to higher living costs and an expensive work environment, these organizations just can’t compensate for the price. 

2. Lessened talent pool 

Onshore outsourcing restricts your hiring options to a limited talent pool. Identifying professionals who fulfill the required criteria for your project might be a challenge when opting for an Onshore outsourcing partner. 

Offshore Software Development 

Selecting an offshore software development partner has immense advantages and a few possible hitches. When determining an overseas development partner, you can take advantage of the usefulness while bypassing problems. 

Selecting an offshore software development partner has both advantages and disadvantages. 

Advantages of Offshore Outsourcing 

1. Highly cost-effective 

Selecting the right offshore development partner is essential for every organization as it can maximize value, reduce costs & boost your profitability for the software product. Offshore outsourcing is definitely less expensive than onshore hiring. 

2. Hire global talent  

You can hire professionals from a vast reservoir of young, competent software engineers who are keen to showcase their talent in the field. You would not get an opportunity to explore such brilliant professionals if you opt for local hiring. 

3. Round-the-clock increase in production 

Among many benefits of offshore outsourcing, getting a round-the-clock productivity increase is one such factor. Due to the difference in the time zone, you can benefit from Non-simultaneous production. 

Countries that hire professionals from different parts of the world have substantial time differences, 24 hours sometimes, get the opportunity to get better productivity profits than the ones who work with the same time zone partners. 

4. Fast & service 

Offshore development establishments can often provide faster and more efficient turnaround, thanks to their large pool of qualified professionals, the time zone advantage, and lowered costs. 

Disadvantages of Offshore Outsourcing 

1. Language barrier 

Developing and designing software is complex and often requires subtle communication to establish your organization’s vision into existence. Preferring a team plugged with individuals who don’t articulate your aboriginal language can result in uncertainties, revamping, and projects that run over the allocated budget. 

To resolve the language barrier, you should thoroughly vet your offshore outsource partner with straightforward, live discussions. Get to know your prospective project supervisor and ensure you create a clear and smooth communication channel. 

2. Lower expenditure may not translate to higher value. 

What good is a cost-effective product if you’re not getting a beneficial return on your hard work? Not all outsourcing partners who charge less provide with actionable returns on your investment; therefore, it is recommended to go for one with a better market reputation to get maximum results. 

To ensure high-quality returns, research your potential offshore partner on review sites and look at their customer/client testimonials and customer case studies. If they’ve delivered profitable returns for their previous clients, they can do it for you. 

Choosing Between Offshore and Onshore Software Development

Reviewing your organization’s requirements & situations is essential when deciding between recruiting between an offshore or onshore software development partner. Execute a comprehensive assessment of your business needs, considering the following. 

Funding: Keeping a review of what kind of allotment has your organization assigned for your software development project? Opting for a good software development outsourcing is never inexpensive; however, selecting offshore can be a little less heavy on your overall company pockets! 

Partnership requirements: Review & Analyse if your organization Would benefit from live, real-time discussions? If your business model supports it, then you should consider either an onshore developer or an offshore development partner who can adjust to your working hours. 

Timeline: If your business requires a relatably fast turnaround, it is best to go for an experienced offshore outsourced partner who can often turn things around faster than someone hired locally. 

Choose the right one: Onshore Vs. Offshore 

As discussed above, we have concluded that both onshore and offshore software development carry certain advantages and disadvantages. This comparison has no answer to which is better than the other. The final decision is based on the location, preferences, organizational culture & list of IT services needed, and budget. 

Various problems require different solutions and hence, different software outsourcing models. Therefore, it becomes necessary to know what kind of problem you have before selecting a solution. Outsourcing models are a great option if you want to expand your business horizons. Initially, it is advised that you go for the model that best suits your organizational needs; as your needs increase, your association with your outsourcing partner grows, and once that gets onto the right track, you can experiment with different outsourcing models. 

Cerebrum Infotech as Your Offshore Development Partner  

At Cerebrum Infotech, we work toward Revolutionizing your Business needs with Robust On-Demand software development services & products. With years of experience in software development, we aim to deliver a comprehensive technology stack to all our clients. Our team of talented professionals have several years of software development industry knowledge that facilitates growth.

Highly functional on-demand, clone apps, and web apps are some of the services we excel at. We could be your offshore software development partner with customized solutions that delivers results! 


It usually depends on your organizational needs; if you are looking for a cost-saving model, then offshore is perfect for you; however, if you want effective results without worrying too much about budgets, you can opt for onshore outsourcing.

Offshore software development is when an organization recruits a dedicated software development unit and opens a new office space called an offshore development center in another country. The employees hired are permanent; they are just based in another country.

Onshore outsourcing means hiring a software development team in the same country as yours. Offshore outsourcing is when you hire a development partner from another country with a very different time zone.

Sakshi Shukla

Sakshi’s intrigue with the latest technology and advancements, combined with the ability to string words together for maximum information in the least number of words helps her create impactful, meaningful, and useful content for all types of readers.

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