Onshoring vs. Offshoring: Striving For Perfection In Digital

Just over 40% of businesses have a dedicated digital transformation team in place, and yet, there is no question that all businesses must become digital businesses sooner or later. Whether you’re on board yet, or otherwise, digital transformation will be the crucial component of commercial success for the new enterprise. Are you prepared?

For most, delivering multiple digital projects, particularly in mobile development, can be the difference between success and failure. If you’ve been tasked with assembling a killer team of digital products specialists and mobile developers, visibility of the starting point of your digital journey can seem a long way off. The good news? You’ve got options – and lots of them!

In this latest blog piece, we’re exploring one of the areas you’ll need to think about early on in your digital endeavours – onshoring vs. offshoring – and what’ll you’ll need to consider when it comes to selecting the right digital delivery specialist to partner you on this most important of enterprise odysseys.

Understanding your options on the digital path

For companies with aggressive plans for growth, the need to make strategic and operational decisions around how digital projects are delivered is critical, and one of the key considerations you’ll come across early on is agility and the time it takes to get something started, versus ongoing development, the transition to live, ongoing optimisation and DevOps.

If, like many enterprises, you’ve got an ever-growing backlog of digital projects that need to get started sooner rather than later, there are three options you’ll want to look at before you begin – whether to pursue offshore, onshore, or in-house development. It’s important to keep in mind that there’s no silver bullet aimed at the right decision – the right answer for your business will vary from others, and will be dependant upon a number of factors. The biggest challenge will be to ensure that whichever road you take, your chosen supplier (irrespective of location), will have the expertise to confidently guide your digital vision towards a successful conclusion – and beyond.

What is offshore development?

When it comes to offshore development, operational activities such as UI/UX design, technical development and project management, will be entirely located to another country. Why? In most cases, businesses will opt for offshore development either to reduce costs or to source the required talent not available in their own neck of the woods.

Success in offshoring development usually depends upon a few key elements, but the one that’s going to have the biggest impact on a good outcome is communications. Surprised? Don’t be! Quality of Internet connection (this may sound trivial but flaky WiFi can be seriously painful over long distance comms), choice of communication platforms (WebEx, Google Hangouts, Skype etc), time differences (is the supplier working when you’re asleep and vice-versa?) and potential linguistic and cultural barriers, are no trivial matters. Fail to measure up on just one or two of these, and your project could falter before it’s even off the starting block.

And onshoring?

If you decide on Onshoring for your digital project, you’ll be looking at securing development activities on home soil, activities that you may not have the resources or expertise to employ in-house. If you take this route, expect to be outsourcing any number of elements that your digital project embodies – particularly in the context of IT and software/mobile development. Think discovery and consulting, agile team management, or expertise in certain technologies that you may not have in-house, such as AR, AI or Voice.

Onshoring your project is going to be the obvious choice if you’re a large enterprise that feels close geographical proximity across teams will enable greater efficiency, and minimise issues.

Of course, with any large scale software development project, problems can arise when least expected. And when they do arise, a successful outcome is going to depend upon your ability (and the software development teams ability) to solve the problem fast. When there are a lot of moving parts to your project, and this kind of agility is needed, onshoring is going to ensure you’ve got the best chance of swift resolution. Very often these situations can be addressed face-to-face with an onshore project – something that’s not usually as easy with offshoring.

Onshoring has become an extremely attractive option for large companies in terms of cultural compatibility and the ongoing evolution of the client relationship. In some cases, cultural compatibility can be the make or break factor for enterprises looking to engage with a specific vendor. It sounds trivial, but it’s not.

The benefits of onshoring

The core benefit of onshoring for enterprise organisations, and working in close proximity to your chosen software supplier, is ensuring

  • Working in close proximity to those involved, you’ll get the fastest possible service – obtaining immediate access to highly skilled pool of resources and talent at short notice.
  • You get to stay agile! Key development decisions can be accelerated, and in-person meetings can be called at short notice to bring together the key software project stakeholders.
  • Onshoring can also dramatically enhance projet ROI in the mid to long-term through smoother project communications and quicker iteration of key features. Onshoring can also deliver cost benefits if your supplier is based in a lower cost city.

So, what about in-house development?

Of course, you could consider in-house development for your enterprise. If you’re confident that in-house development is the best course of action, there are two key aspects to be considered. The first – retrain your existing in-house software engineers in a new discipline. For example, if your core software offering is desktop and your engineers are tooled up in languages that relate specifically to web based application development, quickly reskilling employees into mobile app development can be challenging and time-consuming. The bottom line? If you need to get new software development programs up and running quickly, reskilling is not the fastest option.

The second option will be to recruit developers with the relevant skills directly into your company. Again, this can be costly and time-consuming – and there are no guarantees that once a candidate has been identified, recruited and embedded into the organisation, that the relationship will work or that you’ll be happy with the quality of their output.

Key Considerations

Whoever you engage with, it’s increasingly critical that they understand the very often complex regulatory and operational frameworks within which to develop – and continuously deliver – the right digital solutions to fulfil a commercial need.

Financial services are a great example of a sector whereby governance and the ability to navigate stringent industry regulations are particularly pertinent. There are a range of regulatory factors to consider around security and compliance, not least PSD2 and GDPR. On the flip side, enterprise also needs to consider the impact of new and emerging technologies such as AR/VR, IoT, AI and Blockchain, in terms of understanding how new app development initiatives will impact business operations – and how your customers engage with your software offering. A couple of key questions we’d ask (and would welcome being asked!):

  • What’s their depth of experience in regulatory and security environment relevant to your market?
  • Breadth of technology experience – do they understand backend development? What about the latest mobile development standards? Can they work across platforms?

Conclusion

For companies tasked with mobilising a team of highly skilled software developers and engineers, knowing which direction to take can seem like a daunting process. The good news is, you’ve got options, and it’s not all about distance and timelines. Being clear at the outset about what you want – and need – to achieve will go a long way to ensuring you choose the right route. Is it lower costs, a flexible team, a quicker delivery?

If you’re looking for a wide range of project choices, a lower project cost, don’t mind the time differences or when the team are around and can live with any cultural incompatibilities, offshoring could be for you. But if you’re an enterprise that needs your team close to hand and able to respond to issues quickly and efficiently, onshoring will work better for you. What’s more, if your business is one that’s operating in complex, highly regulated industry, having a team that’s up to speed on requirements is going to be priceless. We’re happy to help you navigate these decisions, so get in touch and go forth and innovate!


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