20 years ago the offshore* software development and testing industry got started to help find and mitigate the Y2K** problem. This is now ancient history in software development, but offshore development still suffers from the reputation from that era.
Today everything has changed.
Offshore development used to mean:
- No proactivity; delivery team did what they were told
- Detailed documentation requirements
- Waterfall method with 6 to 12-month development cycles
- Development took 2-3x longer
- Quality issues at the end of projects
- Poor communication (phone connections, language and tools)
- Very low rates ($5-$10)
Best practice at the present time:
- Smart software engineers are everywhere in the world and especially in India and China
- Agile development with 2-3 week sprints and MVPs delivered in 2-3 months
- On-site/off-site global delivery models bringing business and cultural awareness to the project
- Similar productivity depending on team
- High technical code quality
- Close daily interactions via VoIP, video conferencing, chat and other collaboration tools
- Rates significantly higher for quality development ($30-$150)***
The success and quality of software development is no longer based on the location of a team. It’s based on the team’s creative thinking, experience, methodology, passion and leadership. Although it’s always an advantage to have team members located together, it’s also becoming a handicap if you depend solely upon it. New toolsets help the offshore teams better communicate, synchronize and integrate and once you’ve managed to get cross-location teams to work efficiently together you can scale across time zones and geographical areas.
So why is offshore becoming the new onshore? Recently, the top students from universities in China, India, Indonesia and Nigeria are no longer choosing the US or UK as their top destination for work. Instead they want to become entrepreneurs in their home countries creating successful companies that hire the best engineers to provide digital services to a target audience of billions of people. Offshore is becoming an obsolete term as the future unicorns**** will be in Asia and Africa where demand for digital services will outgrow Europe and North America.
In addition to this, ‘offshore’ is a strange choice of terminology since development in the US is geographically more offshore for Europe than Asia. Forrester now refers to it as Global Development instead.
Finally, this means that smart companies will worry less about where their software engineers, designers, project managers, testers and other experts are located. Focus will be on hiring the best people for the task!
How do we know? We’ve provided software development services to top brands from offices around the globe including the US, UK, Spain, India and Cambodia for the past 10 years. And our most successful clients don’t care where their services are being delivered from as long as they get the best service.
Magnus Jern, President DMI International
* offshoring = relocating business services to what’s generally a lower-cost labor country
** Y2K = a computer flaw, or bug, that may have caused problems when dealing with dates beyond December 31, 1999
*** Rates based on “What Does It Cost to Source a Mobile App?” from Forrester (December 2015)
**** unicorn = a start-up that has exceeded $1 billion in value