Offshore development can be cost effective and provide access to global talent, but it also comes with some challenges. Let’s understand them here. https://www.finoit.com/blog/key-challenges-in-offshore-development/

1. Uncovering Key Challenges in Offshore
Software Development
Poor coding capabilities, fragile quality framework, lack of business
understanding, communication gap, and improper project management can all
take a heavy toll on software development. Explore how inefficiencies brought by
these elements make offshore development challenging.
Ginni Rometty, an influencer and former CEO of IBM, once noted that “the
benefits of offshoring are clear: access to lower-cost labor, increased efficiency,
and the ability to tap into new markets.” But her next words reflect caution for
those choosing offshoring, as she adds “but it's important to approach offshoring

2. strategically and with a long-term perspective." Hidden in the veteran IT leader’s
words is a message that offshoring may be an exciting prospect, but your
approach must also consider its all dimensions.
Undeniably, offshoring has always been a tempting choice for companies from
the US, Europe, and Australia. For more than two decades, businesses from
these geographies have been outsourcing their software development projects to
offshore destinations like Asia and Eastern Europe.
And why not? Finally, offshore software development services offer a promise of
saving almost 80% cost, when compared with hiring local talent, and who
wouldn’t want to secure this massive cost advantage?
However, is securing advantage with offshoring that easy? Indeed, not. While the
offshore model is something that a business would like to avail itself of, it poses
several challenges to its adopters. When going unmanaged, these challenges
turn into potential roadblocks, raise costs, and affect the bottom line.
When you are familiar with challenges, it helps you in equipping yourself with the
right ways to deal with them tactically. As a result, here we discuss some of the
most common challenges that hamper the application development process
when going with the offshore model.
Read Also - How Outsourcing Software Development Can Help You
Stay Competitive
Major challenges that disrupt software development when working with an
offshore partner
Offshore development comes with its own set of challenges, which must be
addressed to reduce their impact on the SDLC and ultimately on your end

3. product. So, let's take a closer look at some of the most prevalent offshore
software development challenges.
Ensuring perfection
Different countries that host offshore development centers have high turnover
rates. With these high rates, there is always a chance of losing project
knowledge and expertise. This can affect project efficiency, speed, and quality.
It is simple to maintain track of each team member, their tasks, and approaching
deadlines while working with an in-house team. This is obviously more difficult
with a team thousands miles away, operating in a different time zone.
That is why establishing project management tracking systems is vital to
overcome the offshore development challenges. The ideal method to accomplish
this is to create a productivity tracker in which each team member records their
tasks, progress, and delays. These tools and processes can provide
transparency and visibility into the progress of the project, allowing for early
identification and resolution of potential issues.
Synchronization
As we all know, an offshore location is a long distance away, and businesses
cannot afford to spend so much money traveling to that faraway place. As a
result, the only expectation from the software development offshore company is
to be upfront and communicative. Ensuring that all stakeholders are on the same
page and building trust is always thus an issue in offshore software development.
It is critical to use communicative apps that are transparent and effective in order
to restore trust between the two firms. Technology has advanced to the point
where you can easily keep an eye on what the firm is doing and how your project
is progressing. Several apps such as Skype, Slack, Jira, Silo and other project
management tools that help simplify your vision and keep you up to date on what
your organization is capable of providing.

4. Making accurate estimates
Project estimates and timely releases is one of the major offshore development
challenges. For example, in 2006, IBM received a $863 million contract from
the State of Texas, under which IBM was responsible for unifying the state
government's data center operations and providing other particular services.
The state expected to save hundreds of thousands of dollars over the IT system,
but the project quickly became stalled due to the higher prices, with no one
understanding who was to blame. Four years later, in 2010, the number of
completed projects was only 12%.
The ideal way to handle this software development challenge is to use scrum, a
popular agile approach that allows us to divide the entire project development
path into smaller sprints with fixed deadlines. The team members have direct
access to the ongoing development work and are involved in the estimating and
planning processes, which reduces the chances of them going off track.

5. Guarding against threats
Tons of code, data, information, and documentation flows during the entire
development process. Weak security protocols act as an Achilles’ heel which can
bring down the entire project at any moment, if these sensitive elements land in
the wrong hands.
The technicalities of security, such as encryption, access control, and data
backup, are at stake when the security framework of an offshore company is
fragile. It can jeopardize your project.
One example is the 2017 Equifax data breach. Equifax, one of the largest
credit reporting agencies in the United States, had outsourced some of its
IT operations to an offshore company based in Argentina. Hackers were able
to exploit a vulnerability in the offshore company's software, which gave them
access to Equifax's systems and allowed them to steal sensitive information from
millions of customers, including names, social security numbers, birth dates, and
other personal information.
This incident demonstrates the importance of ensuring that offshore partners
follow required norms in data, code, and information security. Failure to do so can
result in serious consequences for the business, including reputational damage,
financial losses, and legal liability.

6. Ascertaining Standard
According to a Harvard Business Review, organizations that define metrics
informally frequently end up with costly errors and lengthy gestation periods.
Only companies that set error tolerance limits, establish completion times and
productivity norms, and regularly assess staff performance are capable of
providing quality offshore solutions.
When companies offshore, they have no way to determine whether the providers
executed those operations better or worse than their personnel. The reason is
they have not ascertained if the partner has any mechanism to track and monitor
quality KPIs.
As a client it is always a tough job to ensure that all quality metrics are at par with
what the accepted standards require. The chances of quality getting sacrificed by

7. your offshore vendor are always high, if it fails to monitor key metrics, which
include:
● Code Quality: Readability and Clarity
● Reliability: Mean-Time-To-Repair (MTTR) and
Mean-Time-Between-Failure(MTBF)
● Maintainability: Mean-Time-To-Change (MTTC)
● Integrity: Integrity flexibility and Control on integration
● Performance: Degree to which requirements are being met
Issues in quality occur due to failure to monitor these KPIs. Since, each process
comes with its own set of KPIs monitoring each of them and ensuring the
efficiency of the development process is a cumbersome process.
Regulating Control
A dispute of authority is one of the major challenges of offshore software
development that companies face. When a company outsources its project to an
offshore company, the latter takes ownership of all decisions about source codes,
intellectual property rights, and any other form of advancement.
Like Hertz hired a known software development giant in 2017 to design a
technology platform for which it spent months planning, setting goals, strategies,
business planning, and developing roadmaps. The partner, on the other hand,
deliberately ignored some of the platform's scalability requirements in the
beginning and only permitted it to be applicable to the region. This made it
impossible for the corporation to use it outside of North America, where it was
used by several companies.
So, clarity on project ownership is an important consideration in offshore
development, as it can be tough for firms to approve since they need to become
acquainted with the company to whom they are offshoring. As a result,
decision-making authority becomes a worry for both parties, which can lead to
coordination and management issues.

8. Scaling by defying distance
Cultural differences can be a one of the potential offshore development
challenges barrier in offshore outsourcing. When working with a team located in
a different country, businesses may encounter differences in communication
styles, work ethics, time zones, holidays, and business practices.
However, many offshore outsourcing companies recognize the importance of
cultural alignment and invest in training and resources to bridge the cultural gap.
This can include language training, and communication protocols tailored to the
specific needs of the client's business.
Ultimately, while cultural differences can present challenges in offshore
outsourcing, they can also offer opportunities for learning and growth. By
embracing cultural diversity and investing in resources to promote cross-cultural
understanding, businesses can foster a collaborative and productive relationship
with their offshore team.
Skill and Talent Validation
Most common challenges in offshore development is IT companies highlight what
they can give their clientele. Nonetheless, there have been cases where
businesses demonstrate something but know very little about implementation.
They are ineffective in any development technology framework and architecture
since they lack understanding and technical expertise.
For example, All Virgin Airlines airport operations were unexpectedly
terminated in 2010. More than 50,000 travelers were stranded and their flights
were canceled for 24 hours. The problem was caused by Navitaire's Internet
booking, reservation, check-in, and boarding system errors. But, when this
occurred, their offshore partner was unable to fix it as required by the contract,
and they also opted not to move to backup hardware, leaving Virgin Airlines with
a significant financial, loyal customer, and reputational loss.

9. Hence, before deciding to offshore, businesses must determine what the firm is
capable of giving, as well as what best practices they follow and offer. Because
of a lack of knowledge and competence, firms may be unable to deliver what
their customers seek.
Overcome these pain points with ease
Indeed, nothing in our life is flawless, and offshoring is not a perfect collaboration
model either. There are numerous problems that both clients and vendors must
face in order to produce a perfect software solution. Even when working with the
best vendors, mistakes are conceivable, and you should keep this in mind,
especially given the complexities of interacting with people on the other side of
the globe.
There are certain challenges on the client's side as well, which you should try to
resolve in order to maintain smooth communication. Strive to build a solid and
trusting relationship with your customer, avoid isolating your team from the
offshore team, and ensure that all of your team members function as a single
entity rather than distinct units.
Choosing a good custom software development agency, establishing honest and
regular communication, and being realistic about your goals are the essential
components that will assist you in overcoming these potential challenges.
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