The future of software development: Back to Onshore?

The future of software development: Back to Onshore?

In an more often connected and globalized world, the shift of software development projects in more cost-effective countries, the so-called offshoring, seemed to be the unchallenged royal route for many years.

The temptation to drastically reduce development costs and access a huge global talent pool was simply too big for many companies to ignore them.

After years of practical experience, however, a more differentiated picture emerges. The initial savings.

This are purely on paper, are often accompanied in reality by a whole series of unexpected challenges and considerable hidden costs.

More and more companies recognize that successful software development depends on far more than low hourly rates.

Factors such as smooth communication, cultural compatibility and consistently high quality return to the foreground.

This article highlights the reasons for growing scepticism towards the offshore model and shows why the conscious decision for onshore development and thus for teamwork with local experts often represents the more strategic and ultimately more economic choice.

The deceptive promises of offshore development

In an more often networked and globalized world, the shift of software development projects in more cost-effective countries, the so-called offshoring, seemed to be unchallenged for many years.

For The future of software development: Back to Onshore? , see Cost Calculator: Software Development und Our Development Process on our website for rollout paths and planning.

The idea of massively reducing development costs through the outsourcing into countries with a significantly lower wage level is extremely attractive at first glance.

However, practice often paints a completely different picture.

The disadvantages of such a globally distributed strategy are manifold and have the potential not only to deplete the expected financial advantage but to reverse it.

A typical scenario that many companies experience. A midsize company decides to award the development of its new core application to a team in Asia.

The hourly rates are unbeatable. But soon the first cracks in the foundation of the project will be shown.

Daily votes are due to a time shift of six hours to the nightly load sample for the German project managers.

Cultural differences in the way of working – for example, a less proactive response to potential problems – lead to misdevelopments being recognized lately.

The result is expensive improvements and major project delays.

Challenges in offshore development

Short: The problems are not custom cases, but rather systematic.

The problems are not custom cases, but rather systematic. The following table sums up the most common and serious challenges that may arise in offshore development:

Challenge	Description
Communication barriers	Major time shifts make spontaneous agreements impossible and force communication at unfavorable times. Language Nua

References and further reading

The following separate 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.

"AI in mid-sized companies works when processes are measurable and data is trustworthy—a pilot without a success metric is theatre."

— Björn Groenewold, Managing Director, Groenewold IT Solutions

Frequently Asked Questions (FAQ)

What is this article about: “The future of software development: Back to Onshore?”?

This post explores The future of software development. Back to Onshore? from the perspective of needs, typical pitfalls, and sensible next steps. In short.

In an more often networked and globalized world, the shift of software development projects in more cost-effective countries, the so-called offshoring, seemed to be unchallenged for many years...

Who benefits most from the content described here?

Useful for project leads and product owners in Software development who must choose between standard software, custom development, and integration.

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Technically and organizationally, alignment with experienced partners pays off — from requirements to operations; start with the [services overview](/en/services/software-development). For multi-system landscapes, [IT consulting and architecture](/en/services/it-consulting) helps align vendors and internal teams.

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