When Should You Use Offshore Software Developers

How you allocate money for your important software project is probably your top priority. You want to get your money’s worth and you need to keep on schedule. But sometimes what sounds like a bargain may end up costing you in unforseen ways. How complex is the project? Is it easy for you to describe your project in terms that are straight forward enough to understand in a different language? Do you need to get feedback or get assistance in testing? Watch our video to gain a deep understanding of whether you should be considering offshore help, or whether some of the project needs to be incorporated with other options.

Video Transcript:

What do you need to know about working with offshore software developers?

You’re a temporary client. As I said, you haven’t got the guarantee that the developer is going to be around and they’re looking at the next big thing. They will drop you like a hot cake if something comes along that is better than your project.

Good developers have day jobs. When I changed tack about four years ago I thought, I don’t want to look at sub continent developers, I’m going to go local. I think of the language transition problems that I had in terms of interpreting the project, and I want to speak to someone. So I switched my attention to New Zealand and the US. I found good developers there, but it’s their night time job. When things got busy at their day job, your project slowed or stopped for a while.

There is no testing. You will be the tester as well. So you will often get code that is rubbish. It doesn’t work. “What do you mean? You’ve deployed it and you didn’t look at it”. They will put all the testing on you. When you get the product, you constantly think, he’s not even looking at it. It works on his system, on his local site and then he just pushes the button and says, yes, it’s ready for you to look at. He didn’t even look at the site on the live site or the staging site which you’re looking at and it doesn’t even work. Just be aware that’s happened many, many times and it is so frustrating.

They don’t necessarily focus on ideas. The likes of Alliance spend a lot of time thinking, how could your business be better? What could we do to make the experience better and help grow your business? Have you thought of this? We have a lot of touch points with various businesses. So we’ve got a lot of experience in development and think about ways in which something can be achieved through development that makes your business idea better.

You don’t get that with offshore software developers. You’re constantly telling them what to do and it is a one way channel. There is never feedback or any ideas coming back at you about how to develop a better product.

There are language gaps. If you like typing, which I’m very slow at, then you will spend a lot of time typing through Skype messages how to develop the thing. You rarely get the opportunity to talk face to face or even via video hookup. They can’t pick up the language or our twang as an Australian quick enough to understand what we’re talking about.

Skills and time from you. Obviously you’ve got to have a lot of skills which you’ll be applying, and time from you to make the project happen.

The numbers

Let’s look at some numbers just to compare what the overseas development looks like compared to a domestic one. I’ve picked a common project where Alliance may quote it for $83,000. An overseas quote may come in at $22,000. What you find with overseas development is they’re very quick to want to secure the job and get going. They’ll put a price there, but they won’t have investigated in enough detail what the scope is, so there will be parts missed.

That missed spec is them not investigating far enough into the project to understand the full scope of it. The net result is you might say they’ve missed $4000 worth of the scope. Domestically there is still a little bit of scope that was missed at the start, but it is nowhere the same.

If you then look at the time you’re going to spend as the project manager; doing the BA, doing some wire framing and your testing. If it’s $40 an hour that you’re valuing as your hourly rate (most of these aspects are going to take you roughly 160 hours) it’s going to equate to nearly $20,000 of your time in the project. If you put that side by side, now you’re closing the gap to saying it’s roughly a $46,000 project versus an $84,000 project done here in Australia.

If we then say that we’ve got a late delivery, it’s 40% longer to deliver the project. Any software development is going to try to do one of two things: make you more efficient as a company, so look for savings, or generate profit. So you build something that someone wants to buy.

If you’re going to make $4000 a week from the release of your product and it’s generating $4000 a week, you’re looking at the delayed cost roughly equating to $28,000 because of the late delivery. In this particular case the $83,000 is seventeen and a half a weeks work in a local developer and the overseas delayed delivery time is seven weeks later. So you’re now equating to $28,000 of missed revenue because it is delivered later. So now you’re looking at comparing a $74,000 project to an $84,000 project.

The client time. Every project is going to require you as the client to have input into the project. You need to be considerate of that. Once again the time of typing versus talking and all the other aspects of communicating with the overseas developer is going to be 120 hours versus 70 hours for a local developer. Once again there is about $2000 difference there. It’s a small saving. But if you actually look at this figure; the amount of time here spent on the project of 622 hours or 25 hours a week to get this thing delivered through an overseas channel versus 70 hours or 4 hours a week for a local developer, you virtually close the cost.

That is without considering things like risk and not necessarily owning the IP. Some of the development I’ve done in the past with overseas, I have no control over whether the offshore software developer is going to use it or have any security against their laws in terms of the development being done there. If you look at numbers like that, it closes it. You look at the true value of your time. I don’t value my time at $40 an hour anymore. If you have that, it’s something to consider.

Your software project has the best chance for success if the coding team is the perfect fit for your project. You have to be cautious not to overspend, but sometimes you need to spend a little more in some areas to insure your project will be completed successfully. By understanding the benefits and limitations of offshore developers and other options available, you can better plan for a successful outcome for your software project.

Don’t leave your important software project with just anyone. Let us help you organise a successful coding experience and avoid all of the major pitfalls. Get in touch with us today.