Working with Offshore vs. In-House Development Teams

Before starting a project, you face the following challenge: how to get the best team so that your idea turns into reality in the best possible way? Normally, there are two ways to answer this:

• You conduct all the necessary operations within your company,
  
• You decide to outsource

The last one means the offshore model where you delegate the project to the developers abroad and the development cost is less expensive. In this blog post, we talk about the offshore vs. in-house development differences and the team model that will best fit your project and meet your needs. Keep reading to find out more!

We could spend hours discussing what differentiates outsourcing from working with your own IT team. However, all of them can be divided into three main Ls: location, line-up, and level of salaries. Let's consider them in detail.

This is why you call the offshore team "offshore." Unlike the in-house developers, whom you may meet daily if you have your own software development company, the offshore developers can be based thousands of miles away. The most popular regions for outsourcing are Asia and Central/Eastern Europe. There you may find skilled and talented software engineers whose hourly rate is far below the relevant salaries in New York, London, or Stockholm.

The in-house team consists of the direct hires — people that were recruited by the internal team. On the one hand, each of them is well-aware of the company's culture and business goals and proved themselves as experts in the field. On the other, not all of them are the right fit for a certain project, and not all of them are required to work on it on a full-time basis.

On the other hand, outsourcing software development companies offer experts who are dedicated to your project. Their main task is to work on your project to meet your goals; that's why they continuously present you with deliverables and track time spent on your project only.

In most cases, this is the main reason why business owners or product owners consider outsourcing. Indeed, the cost of the development could be 2-3 times cheaper! Just compare an average $150 per hour rate in New York, Los Angeles, or San Francisco to the rates in Israel, Ukraine, Poland, or Colombia.

Offshore development teams normally supplement existing in-house IT teams. However, they can also handle post-development tasks, including support and maintenance.

In-house teams refer to company employees who are supposed to be engaged in all development stages.

Well, that depends on your goals and requirements.

Suppose you are going to create some complex application that will require regular updates, enhancements, and maintenance (meaning the development process never stops). In that case, probably, an in-house team is a better option.

In case you don't need new features to be released quarterly, choose offshore. Comparing onshore vs. offshore development teams won't work in this case since you are looking for quality services at a reasonable price. The onshore model in the U.S. doesn't make sense, except you prefer face-to-face real communication and worry whether developers abroad could do anything illegal with your data.

Interestingly, just a decade ago, it was believed that outsourcing is good only for small startups that can't afford to keep the whole development team in the office. But now, even big companies decide to assign certain projects to offshore teams. The explanation for this trend is that there is no need to limit yourself within one country; you can find talent anywhere in the world and arrange the right people for the job.

Mobile development, web applications development, and custom software development are the most popular services offered by the outsourcing studios. But sometimes, outsourcing doesn't mean short-term collaboration. Some American companies already opened development centers in Europe and Asia, meaning that offshore teams have become long-term contractors. Of course, in some cases, this is related to worldwide expansion, but more often, it's just about cost reduction and smart investment.

As we pointed out before, talents matter; however, let's have a look at the figures. An average hourly rate for the developer in the U.S. ranges from $100 to $250, whereas European and Asian programmers are worth $35-$80 per hour. Doing simple math, you can see how beneficial working with offshore teams can be.

In many cases weighing pros and cons is not as simple as it seems. That's why we suggest doing research, reviewing portfolios, and case studies before you switch to outsourcing. At Fayrix, we are always open to discussing interesting ideas and concepts. We are constantly exploring new technologies and approaches, so that we look fit and ready for the journey of making the world a better place. Do not hesitate to contact us if we are on the same road. Let's make your software rock!