Effective Offshoring: Lessons Learned and a Path to Success

Software development is a complex and resource-intensive endeavor. Skilled developers are essential, but they come with a significant cost. Developing even a moderately complex application can quickly reach hundreds of thousands, if not millions, of dollars when considering design, initial launch, ongoing feature enhancements, and maintenance. Naturally, managers are keen to minimize these costs, and one of the most significant factors is the cost of developers.

Over the past few decades, offshoring software development has become a popular strategy. Countries like India offered much lower wages for developers, making it seem like an ideal solution to reduce expenses. While many projects have succeeded using this approach, some companies have encountered challenges that led to unexpected costs, and sometimes even higher expenses compared to local development. Quality issues also emerged in some cases, leading to the question: Are offshore developers less skilled than their local counterparts?

In my experience, it isn’t a question of skill. During my previous role, I was responsible for managing several projects where we aimed to leverage offshore rates by augmenting our team with developers from India. We made a significant investment of time and resources to bring several developers to the U.S. for two weeks to kick off these projects in person. Initially, the results were promising; we had a dedicated and talented team, and progress was smooth. We were optimistic about benefiting from a "follow the sun" approach, taking advantage of the time zone differences.

However, once the offshore team returned to India, challenges began to surface. With a 12-hour time difference, communication became a major hurdle. Project managers had to schedule late-night calls, and the Indian team shifted their work hours to accommodate, but productivity declined, and quality suffered. This led to increased rework for our local team, frustration among developers, and slipping timelines.

What went wrong? Despite having motivated and capable programmers, the inability to communicate effectively when it was needed most was the biggest contributor to these issues. When offshore developers encountered questions while working on a user story, they couldn’t immediately clarify them. This left two options: wait until the next day, which killed productivity, or make assumptions, which often led to errors, rework, and compromised quality.

So, what can be done to address these challenges? There are several options:

1. Complete Project Ownership Offshore: If feasible, transferring full responsibility for a project to the offshore location can work. This allows for project management, development, and quality control to be handled by a collocated team. However, this approach isn’t always possible or desirable, especially if management, sales, and operations are based locally in the US.

2. Shifting Local Working Hours: Aligning local developers' working hours with the offshore team is another option, but this can lead to morale issues and costly attrition among local staff.

3. Aligning Offshore Working Hours: Having the offshore vendor shift their working hours to match the local team can help, but it comes with increased costs due to after-hours work and can significantly raise attrition rates among offshore developers. This, in turn, leads to time and money spent retraining new developers, negating much of the cost advantage.

4. Aligned Time Zone Offshoring: The best solution I’ve found is to augment the local team with offshore developers from countries in similar time zones, such as South American countries. This approach maintains the cost advantages of offshoring while significantly improving communication and productivity.

This last approach proved to be by far the most effective. We began working with a team in Bolivia and integrated them almost entirely into our local team. Additionally, as of COVID, our local team transitioned to 100% remote work as well. The fact that everyone was working remotely helped eliminate barriers and create a more level playing field for collaboration. With everyone operating in a similar environment, it became easier to foster a cohesive culture and ensure that all team members—whether local or offshore—felt equally involved and connected. The result was a seamless, productive collaboration that eliminated many of the barriers that typically exist between local and offshore staff.

While aligning time zones provides a significant advantage, it’s crucial to consider other factors that can influence the success of offshoring:

• Cultural Fit: Cultural differences can impact communication styles, work habits, and expectations. South American countries often share cultural similarities with the US, which helps facilitate smoother communication and mutual understanding. Time zone alignment alone won’t overcome these challenges if cultural compatibility is not considered.

  
  

• Language Proficiency: Even with overlapping hours, language differences can still present challenges. It's essential to choose teams that are highly proficient in English to minimize miscommunication and ensure smooth collaboration.

  
  

• Consistent Management Practices: Whether teams are in-house, offshore, or nearshore, consistent management is vital. Clear goals, structured processes, and regular check-ins are key to ensuring productivity. Working in an agile framework also helps significantly by fostering frequent communication, iterative progress, and continuous feedback. Agile practices encourage teams to quickly adapt to changes, address challenges collaboratively, and keep all members—regardless of location—aligned on objectives and timelines.

• Pilot Projects: Start with a small, manageable project with your near- or offshore team to assess compatibility and work out any initial challenges.

Considering these elements, in addition to time zone alignment, will provide your offshore strategy the best opportunity for success.

At Trificient Digital, we specialize in finding the right mix of local and offshore personnel to optimize productivity and cost-effectiveness. Whether we take on the task directly or guide our clients in selecting this mix, our approach ensures that projects run smoothly and deliver the desired results. By strategically aligning time zones and fostering a cohesive, integrated team environment, our clients can realize the benefits of offshoring while avoiding common pitfalls.

I know that others may have had different experiences, and I’d love to hear about them in the comments.