Offshore Experiences: Lessons Learned for German Companies

Globalisation has revolutionised the way companies act. Especially in the IT industry, the model of offshore development has been a present topic for years.

The prospect of significant cost savings and access to an inexhaustible pool of international professionals is tempting for many German companies.

But the way to a far away foreign country is not always as golden as it seems at first sight.

Many projects have shown that the outsourcing of development tasks involves significant risks and challenges.

In this article we share important “Lessons Learned” from the world of offshore development and explain why another path is often more sustainable.

The enticing reputation of the distance: Why companies rely on offshore development

Short: The main motivation for offshore projects is indisputably the financial aspect.

The main motivation for offshore projects is indisputably the financial aspect.

Low wage and operating costs in countries such as India, the Philippines or Eastern Europe allow companies to drastically reduce their development costs.

In addition, there is access to a huge talent market that is intended to counter the shortage of skilled workers in their own country.

Companies hope not only to scale their teams faster, but also to develop new markets and to exploit global growth opportunities.

State subsidies and tax advantages in the target countries can increase the attractiveness of offshore strategies.

The hidden cliffs: Typical challenges in offshore development

Short: Despite the obvious advantages, offshore development has a number of challenges that are often underestimated and can endanger the hoped-for success.

Despite the obvious advantages, offshore development has a number of challenges that are often underestimated and can endanger the hoped-for success.

These “Lessons Learned” are based on the experience of many companies who have taken the step abroad.

Communication barriers and cultural trenches

Short: One of the biggest hurdles is communication.

One of the biggest hurdles is communication. Different time zones make the vote more difficult and lead to delays. Language barriers can lead to misunderstandings, which in the worst case can only be noticed late in the development process. Cultural differences in working methods, in dealing with feedback and in the project organisation represent another, often underestimated challenge. Building a trusted and efficient cooperation across thousands of kilometres requires a considerable increase in management and clearly defined processes.

Quality fluctuations and lack of transparency

Short: The quality of the delivered work can vary greatly in offshore projects.

The quality of the delivered work can vary greatly in offshore projects. Uneven training standards and different approaches to software development often lead to results that meet the German quality requirements n

References and further reading

Short: The following independent references complement the topics in this article:

The following independent references complement the topics in this article:

• Bitkom – German digital industry association
• German Federal Office for Information Security (BSI)
• European Commission – Digital strategy
• MDN Web Docs (Mozilla)
• W3C – World Wide Web Consortium

"Cloud-native only pays off when operations, security, and cost model match the architecture—otherwise you ship complexity faster."

— Björn Groenewold, Managing Director, Groenewold IT Solutions