Offshore risks: Why local development is often better

In today's globalised business world, the outsourcing of IT services, in particular the [software development](/services/software development), has become a common practice.

The promise of significant cost savings has led many companies to shift their development projects into so-called “offshore” countries.

However, while the financial incentives at first glance seem tempting, considerable risks often lurk below the surface, which can quickly destroy the desired benefits.

This article highlights the shadow sides of offshore development and shows why cooperation with a local partner is often the better choice.

The tempting trap of offshore development

Short: The main reason why companies opt for offshore development is undoubtedly the cost savings.

The main reason why companies opt for offshore development is undoubtedly the cost savings.

The lower wage costs in countries such as India, China or the Philippines enable software projects to be implemented at a fraction of the costs incurred in Western Europe or North America.

But this short-term financial relief can quickly be overshadowed by long-term problems.

Who decides no offshore development often invests in more than just code – he invests in a smooth cooperation and a high-quality end product.

The hidden risks of offshore development

Short: The geographical and cultural distance in offshore development brings together a number of challenges that can seriously jeopardize project success.

The geographical and cultural distance in offshore development brings together a number of challenges that can seriously jeopardize project success.

Communication obstacles and cultural differences

One of the biggest obstacles to cooperation with offshore teams is communication problems. Different time zones make the vote more difficult and lead to delays.

Spontaneous meetings or quick clarifications are hardly possible. There are also language barriers that can lead to misunderstandings and misinterpretations.

Cultural differences in working methods and dealing with problems can also lead to friction losses.

While in some cultures a direct “no” is considered to be rude, in German business life it is often essential to create clear conditions.

Quality loss and lack of control

The spatial distance makes it difficult to continuously monitor the [development process](/services/software development) and to ensure the quality of the code. Quality standards are often interpreted differently or not consistently adhered to.

This can lead to an end product which is susceptible to errors, is difficult to maintain and cannot be scaled.

The subsequent elimination of these defects not only causes additional costs, but also delays market entry.

Security risks and privacy concerns

The outsourcing of development projects also means sensitive sub-projects

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

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