Why Isn’t All Software Development Outsourced To Countries With Much Lower Labor Costs?

Why Isn’t All Software Development Outsourced To Countries With Much Lower Labor Costs?

In my experience working with several startups and now consulting with established businesses, there are many reasons not to outsource software development. These are the most prominent ones I’ve seen:

1. Speed of Software Development

Offshore talent needs particular requirements to develop. When they run into an issue or question, they stop working, email their contact, and await a response before moving forward. That usually means you lose a day or so of productivity every time this happens. This makes it difficult to manage if you are an agile company working on sprints.


2. Quality of Work

Since outsourced resources compete with the lowest bidder, the winner of the project tends to produce the quality they deem fair for the little pay they receive. If you google search reviews for Upwork, formerly Odesk, engineers have admitted to the practice. I’ve experienced this as well. We get the code from our overseas resources, which must be rewritten because the quality and coding standards must match our internal code base.


3. Security

If you’re developing Intellectual Property that adds value to a business, offshoring doesn’t guarantee that the IP will be safe and secure. Companies that build software for the federal government must use domestic resources because of security concerns.


4. Cost

As mentioned, due to numbers 1 and 2, the cost savings need to be more significant offshore. Some companies in India give you a developer at $20 – $35 per hour. However, factoring in lost development time, code reviews, and possible rewrites. Getting a domestic developer for $40 – $55 per hour would be more cost-effective. They can complete the project faster with similar quality to our in-house team.

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