The C-Level Executives Guide To Onshore & Offshore Software Development Services

Outsourcing software development has become commonplace in modern business environments. According to a 2020 Deloitte study, 70 percent of businesses that choose to outsource their software development projects do so to save money[1].

The terms “onshore” and “offshore” have long been used to refer to two competing business models. In the software development sector, the marketplace is international, meaning organizations have the opportunity to tap into a global pool of talent.

Understanding these two outsourcing models is important as a company’s decision will influence many aspects of its business.

Onshore Software Development Services

When outsourcing software development, the biggest decision that an organization will have to make is who they will choose to outsource the project.

With the onshore software development model, the software developers are in the same country as the client or within a 0 to 3 hours time difference between offices. Compare this to the offshore model in which developers are located in a different country and average a 4 to 6 hours time difference between offices.

In many cases, the onshore software development model seems like a safer and more convenient choice. Choosing to outsource within the country typically means working with individuals who speak the same language, eliminating possible language barriers that may occur when offshore development.

Shared business hours can also facilitate a closer working relationship between software developers and clients. Communication is streamlined and issues can be resolved in real-time. For many organizations, the ability to meet in person is a critical aspect that many businesses do not wish to sacrifice.

Of course, there are some downsides to onshore software development. Finding availability can be challenging as there continues to be a big demand for qualified software programmers.

Time Differences Example – Organization Located In Virginia vs. Onshore Companies Located In:

Offshore Software Development Services

The industry is growing at a rapid rate, making it necessary for many businesses to seek software development services outside of the country.

Hiring developers located outside of the country is one way that organizations can get the IT talent they need at an affordable cost. A wide range of software development tasks can be effectively outsourced to an offshore developer, such as software support, custom software development, website design and mobile development.

It can be costly to maintain an in-house IT team that has expertise in the latest technologies. Outsourcing software development to an offshore developer limits the need to invest in IT infrastructure and eliminates time spent recruiting, hiring and training employees. Offshore software development also gives clients access to a wider pool of talent.

Dedicating an offshore team to tackle a software development project can also result in a faster time-to-market. Organizations that are limited on time often seek offshore developers who are willing to dedicate their time and resources to complete the work quickly without sacrificing quality.

Similar to onshore software development services, offshore development can help organizations achieve expedited business growth by gaining access to a skilled labor force.

Outsourcing IT services is not a new concept but one that is constantly evolving. According to an IT outsourcing report published by ResearchandMarkets.com, the global IT outsourcing market is expected to grow from $526.6 billion in 2021 to over $682.3 billion by 2027, a compound annual growth rate (CAGR) of 4.13 percent[2].

Notable Onshore Software Development Model Considerations

There is no one “right” choice when it comes to choosing between onshore and offshore software development services. The onshore software development model offers vast advantages, such as clearer communication, potential face-to-face collaboration and a familiar work culture. However, these services may come at a higher cost.

Before making a decision regarding the best model, it is important for organizations to understand their unique requirements. Knowing the requirement stack for a project allows businesses to more easily identify their needs when hiring a dedicated software development team.

Onshore software development services can deliver organizations the top-quality results they are looking for based on a well-conceived design. However, there are a few notable onshore software development model considerations to think about before moving forward.

Adding Team Members With Experience Working Within A Similar Workplace Culture

Company culture is a vital element of every software development company that wants to thrive in today’s competitive business market. Workplace culture defines a company’s reputation and identity, affects onboarding and the health of employees and can improve employee engagement and retention.

To maintain a positive workplace culture where both employees and outsourced workers are comfortable and productive, it is important to choose the appropriate development model. Organizations that acquire onshore software development services have the advantage of working with developers and project managers who work with a similar workplace culture.

Onshore developers often have similar work ethics and quality of work standards which increases the odds of a successful business relationship and satisfactory work output. There is often no language barrier like with some offshore development companies, which helps ensure that projects run more smoothly and any misunderstandings are cleared up quickly.

Working with onshore developers who are familiar with normal workplace culture in a particular country can also reduce the likelihood of cultural differences that could potentially affect the success of the project. Onshore developers often have a similar workflow and can easily communicate and collaborate with organizations within the same country.

Determining Whether Your Project Requires Location-Specific Knowledge

When searching for the right software developer for a particular project, most companies focus on technical and software skills, such as computer programming expertise. Although this type of knowledge is required to successfully design, develop, debug and test software, developers should also possess location-specific knowledge.

There are many types of software that require accurate location technology, such as delivery apps, location tracks, dating apps, and health and fitness apps. According to Allied Market Research, location-based software development is one of the leading trends at the moment with the market expecting to reach $318.64 billion by 2030[3].

Companies interested in developing location-based software will require a software developer that is accustomed to a particular area, whether that is a particular city, state, region or country. With location-specific knowledge, a software developer is better equipped to design software that accurately reflects the area.

Organizations that require location-specific knowledge generally seek out onshore software development services. Depending on the proximity of the developer to the client, it may even be possible to schedule face-to-face meetings. The ability to collaborate in person can help build trusting, long-term, mutually beneficial relationships.

Calculating The Weekly Average Of Meetings Team Members Will Be Required To Attend

Meetings are commonly scheduled throughout the software development process. Regular meetings help keep all parties informed on the progress of the project and keep the project on track. Meetings are also the ideal time to bring up challenges that developers may encounter.

The frequency of these meetings will depend on a variety of factors, such as the size of the project, its complexity, the number of people involved, and the projected deadline. Many companies opt to hold brief daily meetings to get updates on the project’s progress, while other organizations meet just once or twice a month for more in-depth meetings.

For projects that require multiple team meetings on a weekly basis, it is recommended to hire team members that can consistently attend. This typically means choosing a software developer that lives within the same or a similar time zone and can meet either in person or via live video stream to discuss the project.

When companies choose offshore development services, there is often a significant difference in time zones which can negatively impact the progress of a project and have a detrimental effect on its time to market. Internal communications and QA processes can also suffer as a result. Onshore development can streamline the collaboration and communication process.

Notable Offshore Software Development Model Considerations

Offshore software development can have some advantages over onshore development, such as cost savings. However, this widely used software development model can also pose certain challenges. Depending on the developer chosen, an organization can experience poor code quality, troublesome logistics and miscommunications due to culture and language barriers.

Some of the most popular areas for outsourcing software development projects are Poland, South America and India. Businesses may choose to hire professionals from these regions as software development services are often available at lower rates compared to their home countries.

When deciding whether the offshore software development model is right for a particular organization, there are several things businesses should consider.

Working Around Team Members With Varying Time Zones

One of the biggest challenges presented with offshore software development services are differences in time zones. Having team members who work within different time zones can make it difficult for teams to communicate effectively and meet deadlines. Organizations that use offshore development services must learn how to best navigate their conflicting schedules.

With offshore software development, organizations must have clear communication policies that are shared at the start of the relationship. Establishing effective communication channels, such as email, Slack or live video conferencing, can help keep conversations organized and accessible in one convenient location.

Having team members in different time zones also requires organizations to always plan ahead, especially those with a 12-hour time zone difference. It is important to consider each team member’s work hours and time differences before sending messages or setting deadlines. It may be necessary to delegate tasks a day or two early to account for time zone differences.

Organizations that use offshore development services can greatly benefit from utilizing project management tools and virtual processes. When given access to a variety of convenient tools such as task management software, instant messaging apps and progress trackers, team members can stay updated throughout the day.

Establishing An Efficient Means Of Communication

Clear communication is fundamental to the success of a software development project. Organizations require an efficient means of communication to express complex concepts and ideas with one another, a core component of collaboration. Modes of communication also allow all parties involved to share updates, barriers and the overall progress of the project.

When working with an offshore software development team, organizations will first want to establish an agreed-upon center for communication. Many businesses find video conferencing to be an effective way to speak face-to-face. Some excellent examples of communication tools that offer video conferencing abilities include Zoom and Google Meet.

Communication can also come from other means, such as instant messaging and QA reviews. Today, businesses have access to a wide range of free or low-cost instant messaging tools, such as Slack and Microsoft Teams. These tools can aid in productivity, help team members focus their time and simplify all communications in one place.

Face-to-face interaction is considered the most effective form of communication in software development[4], according to Principles Behind the Agile Manifesto. Of course, this is not always feasible with offshore development, especially when there is a 12-hour time difference. Establishing multiple effective forms of communication can help limit communication setbacks.

Acquiring Native Speaking Team Members

While language barriers can occur with any team, they are more common among organizations that use offshore software development services. Working with developers from other countries increases the odds of having team members that have a different native language or cultural differences that make it difficult to understand one another.

Language barriers can pose a number of challenges in the software development sector. These barriers can prevent the free flow of information. Team members that speak different languages may have valuable ideas but without the capability to communicate, the team could miss out on this useful knowledge.

In many cases, language barriers can also hinder relationships. When team members are not able to speak the same language, it can prevent them from fully expressing their personality. Language barriers can even contribute to discrimination and result in the separation of team members.

Frustration is also common among team members with non-native speaking individuals. The inability to share and understand ideas and concepts can result in missed opportunities, negative attitudes, embarrassing mistakes and other serious consequences that affect the final outcome of the project.

When putting together a team for a software development project, it is important to choose individuals who are native speakers and can clearly communicate their thoughts and ideas.

What You Need To Consider With Both Types Of Software Development Models

Regardless of the type of software development model chosen, there are certain aspects that an organization will want to consider when starting its project. First, it is vital to understand the unique processes of the development partner in question. Not all software development companies operate in the same way and some businesses may not be a good fit.

In addition, organizations should consider the level of expertise that a particular software developer has by looking at their education, training, work history and testimonials.

Aside from these essentials, here are some other things to consider with both onshore and offshore software development:

Choosing The Right Project Management Methodology For Your Team

Choosing the right project management methodology can directly impact a team’s ability to deliver projects on time and within budget. From Agile to Waterfall, there is a wide range of project management practices that cater to the unique needs of the project.

There are several advantages of having the right management methodology in place. First, the right methodology can help team members maintain the same guidelines for their workflow, resulting in more consistent results throughout the project. Teams are also more prepared and have more time to address concerns or resolve potential issues.

It also becomes easier to make adjustments to the workflow when there is an existing methodology to which organizations can compare changes to. The right project management methodology also makes explaining the project approach to clients and stakeholders a simpler task.

Some of the most common project management methodologies include:

Agile Project Management

Agile project management is one type of methodology that divides larger scale projects into multiple phases, known as iterations or sprints. This methodology requires frequent collaboration with stakeholders, as well as continuous improvements at each stage of the project lifecycle.

There are four main values involved in the Agile methodology, including:

1. Individuals and interactions over tools and processes
2. Working software over comprehensive documentation
3. Responding to changes over following a plan
4. Customer collaboration over contract negotiation

Agile project management is based on the delivery of fast feedback from the market to quickly adapt to emerging changes. It also focuses on visualizing processes to create transparency and working in small batches. With the ability to promptly adapt to new changes in requirements, organizations are able to create higher-quality products and services to satisfy their customers.

Scaled Agile Framework (SAFe)

The Scaled Agile Framework (SAFe) refers to a set of workflow and organizational patterns for applying agile practices on an enterprise scale. SAFe is designed to promote collaboration, alignment and delivery across agile teams. This structured approach for scaling agile consists of four configurations: Essential SAFe, Large Solution SAFe, Full SAFe and Portfolio SAFe.

This freely available online knowledge center offers a lightweight and simple experience for software development. There are several key benefits to using this framework, including increased productivity, faster time to market, increased quality, higher employee engagement and overall greater job satisfaction.

Agile methodologies were originally designed for smaller integrated teams consisting of just five to 10 people working on a single product or solution. Due to continuous integration, early feedback, seamless communication and other benefits of agile becoming evident, larger organizations began to leverage this framework, resulting in a need to scale agile.

Today, the Scaled Agile Framework is best suited for large-scale projects. SAFe is the ideal solution for organizations that want to scale Agile practices across multi-team programs and portfolios.

Rapid App Development (RAD)

While Rapid App Development (RAD) has some similarities to other software development models, there are also some distinct differences. The biggest difference is that RAD focuses on speed while other models focus on delivering a working product to the customer. Another big difference is that RAD typically maintains single teams with a small number of members.

Since RAD focuses on speed, the software development process is significantly shortened. This model often turns out many prototypes before creating the final product. Rapid App Development is also heavily focused on keeping the end-user involved throughout all stages of the development process.

RAD is a methodology best used by organizations that require reliable prototype testing or when they need a project completed quickly. Compared to other development models, Rapid App Development is fairly inexpensive. However, there are some instances when the costs can greatly increase, such as when the project requires a more sizable team.

Waterfall Project Management

Waterfall project management is a type of methodology that helps organizations structure their project processes. With this type of development model, projects must be completed in sequential steps, resulting in minimal flexibility. This unique approach is fairly hands-off and the goals are established from the start.

The Waterfall methodology is considered a linear form of project management and is best suited for projects that have a clear end result that can be established at the start of the project. As each project phase needs to be finalized before moving on to the next stage, the development process can take longer than expected.

Project requirements are established by the team early on, which can save businesses time. However, discovering issues at a later stage may require the organization to go back to previous stages which can be a timely process. Having a clear outline of the project is critical to avoiding time-consuming mistakes.

Adopting & Utilizing A Software Development Tracking Tool

Choosing the right software development tracking tool can be challenging, especially for organizations that are resistant to change or are facing complex projects with many components. It is important to choose tools that can help teams better manage their day-to-day operations.

Software development tools are designed to help streamline the processes involved in completing software project deliverables. This may include scheduling calendars, managing workloads and tracking the progress of projects. It can be nearly impossible to manage complex projects without having a solid project management software tool.

There are many types of project management tools that can aid in software development. Some of the most common include mind maps, calendars, Gantt charts, network diagrams and work breakdown structures.

Here is a closer look at some of the most popular software development tracking tools adopted and used by organizations:

Jira

Jira is an agile project management tool originally used as a bug and issue tracker. Today, the innovative tool has transformed into a powerful work management tool for a variety of use cases, such as agile software development and test case management. Jira can be configured to suit all types of projects and customizable permissions are available.

With Jira, software development teams are provided with useful planning and roadmap tools that allow teams to manage budgets, stakeholders and feature requirements.

This project management software is currently available in three different packages, including the following:

1. Jira Core – This is the most basic Jira project management platform for developers.
2. Jira Software – This tool offers all of the same functions as Jira Core with the addition of Agile functionality.
3. Jira Service Desk – This project management tool is designed exclusively for IT professionals and other service desk experts.

Jira now encompasses many types of project management skills, such as Agile project management, software development, scrum management, bug tracking, marketing, content management, professional service management and more.

ClickUp

ClickUp is a popular project management tool that streamlines processes to make the development process easier. This user-friendly business solution uses a hierarchy of views to organize a business’s projects.

There are several tiers within this hierarchy, including the following:

• Spaces
• Teams
• Lists
• Projects
• Tasks
• Subtasks

Many large enterprises rely on ClickUp to maintain productivity, such as Google and Uber. This tool is available as a cloud-based app, smartphone app or desktop app, as well as a Chrome extension, voice assistant and email add-on. There are many core functionalities of this tool, such as task management, process management and third-party app integrations.

Many organizations find that ClickUp elevates their productivity levels by better monitoring their tasks, time and team. It is suitable for businesses of all sizes and enhances collaboration among teams.

Wrike

Wrike is multi-award-winning software that allows users to track and coordinate projects. This comprehensive project management solution is tailored to agencies, marketing teams and other professional service providers that need assistance organizing their workload. Wrike is a customizable tool designed to fit an organization’s unique project role and needs.

With its ease of use and straightforward options, Wrike is an excellent option for mixed teams with mixed tech literacy. The flexible tool enables users to check their notifications, manage assignees, measure project progress, view activity streams and see the project laid out over the course of a month on a calendar.

Users can also save time and better manage their expectations by gaining visibility using the “Reports” feature. This one-stop organization tool connects all moving components to give teams a centralized place to chat, track time, receive real-time status updates, share files and much more.

Evaluating The Complexity Of The Project

In software development, software complexity refers to a set of code characteristics and how pieces of code interact with other pieces of code. Developers must consider the measurement of these characteristics to determine the complexity of code.

Evaluating the complexity of a software project is important to determine a reasonable Minimum Viable Product (MVP) timeline, budget for an appropriately skilled team and determine the layers of QA that are required throughout the process.

Proposed MVP Timeline vs. Required Team Support Hours

When evaluating the complexity of a project, C-Level Executives should always review the timeline to deliver an MVP and ensure that it reasonably matches the total number of team support hours that are required to deliver the project’s MVP.

An MVP is created with the intent to support a faster time to market and to attract early adopters. With this version of the new product, teams can effectively gather the maximum amount of validated learning about consumers with the least amount of effort.

Budget For Team Members & Their Respective Skill Sets

Budgeting is an important aspect of the software development process. Each project has specific requirements for each customer, meaning projects can vary in costs. However, while larger and more complex projects will naturally cost more, costs can also vary significantly based on individual team members.

Each team member has their own strengths, experience and workflow. Organizations must attempt to find team members that possess the unique skills needed to complete the project while remaining within a realistic budget. Regardless of whether a company chooses an onshore or offshore software development team, it must find a balance between cost and quality.

Establish Appropriate QA & Testing Workflows

Establishing QA and testing workflows through each stage of the project is also essential. Customers expect the highest possible quality when investing in software development. QA techniques aim to prevent issues from developing with software products or services to help ensure a satisfactory experience for customers.

Testing is essential for any product or service prior to it being released. Through testing, developers can check for flaws and identify changes that need to be made before finalizing the product. Software testing also consists of running the software component to analyze its properties. The goal of QA and testing is to provide the client with the best possible outcome.

When hiring a software development team, one of the biggest decisions an organization will need to make is between onshore and offshore development services. Every business has vastly different needs when it comes to software.

It is not uncommon for startups and small businesses to use offshore developers to save money and stay competitive. Larger and more established businesses often turn to onshore developers who are more familiar with the organization’s needs and offer top-quality services.

The rise of convenient online collaboration and communication tools means managing distributed teams is easier than ever before. In addition, there is no longer an ethical stigma associated with globally outsourced companies.

Offshore companies compete for the same jobs across the globe, giving organizations access to a larger pool of talent. However, most organizations value the quality that comes with onshore development services.

Here are some of the most important aspects to consider when choosing between onshore and offshore development:

Overall Project Cost

One of the biggest concerns that many organizations have when choosing between onshore and offshore software development is cost. Many businesses assume that offshore development is the cheaper option and in many cases, they are right. According to Forbes, offshoring can save businesses roughly $11,000 per remote employee each year[5].

Although offshore development may be the more cost-effective solution, organizations must ask themselves what they are really getting for the cost. In exchange for a cheaper project cost, businesses that choose offshore development may face language barriers, a lack of knowledge of the business, communication issues, time zone restaurants and similar complications.

To determine the overall project cost when working with an onshore or offshore software development company, a business must consider the scope of the project, business goals and how much hands-on support the project requires.

The Pros & Cons For Onshore Software Development

Countless businesses use onshore software development to outsource their web, mobile or custom software development. For many years, onshore software development was the only option available due to technological limitations. Offshore development has significantly grown with advancements in technology, allowing people all over the world to connect with ease.

Many organizations still prefer to outsource their software development to local onshore companies but there are a few downsides to this model.

Pros

While onshore software development is typically more expensive than offshore development, the ability to work and collaborate with team members internally is a major advantage.

Ultimately, this can lead to lower long-term costs by giving businesses more control over the pace and QA of the projects. Miscommunications and mistakes are more common with offshore development, leading to additional time and money spent fixing these inaccuracies. Mistakes and misunderstandings are less common with onshore development.

Cons

Onshore software development is generally more costly than offshore.

The Pros & Cons For Offshore Software Development

Many businesses choose to outsource their web, mobile or custom software development needs to foreign vendors, such as third-party software developers located in China, India or Ukraine. Globalization has made offshore development more common in recent years but organizations often find that technology in other countries has not yet caught up to what is currently available in the United States.

Regardless, offshore software development services may be right for some businesses. Consider the pros and cons of this model before making a decision.

Pros

Cost savings are the biggest advantage of offshore software development. Organizations that work with offshore developers do not have to invest in in-house IT infrastructure or the costs associated with recruiting and training employees.

Cons

The downsides of offshore software development focus on the inability to properly train developers on company standards and policies. Organizations may also encounter potentially less talented software developers. Businesses also have less control over their team members.

Team & Workflow Management

Software development teams strive to build workflows that enable them to achieve stellar results with less effort. Developers with an optimal workflow are typically more engaged and motivated, resulting in better quality work. Successful workflows allow businesses to organize projects to achieve a solid understanding of the codebase, build a better rapport among team members and reach overall enhanced results.

Of course, building a productive software development workflow takes time and effort. When properly implemented, tasks can be assigned through a smooth onboarding process, costs can be properly managed and maintained, resources can be maximized, and team members remain aware of their roles and responsibilities. While there is a variable degree of uniqueness in each team environment, all software development teams follow a similar life cycle.

When choosing between onshore and offshore software development, consider the developers’ team dynamics and workflows. Compare the pros and cons of existing workflows and processes.

The Pros & Cons For Onshore Software Development

Software development workflows help developers create error-free code and implement changes to a shared codebase. Workflow is not just about achieving a smooth process but can also make a big difference in a team’s flow efficiency, as well as the quality of the product. A development workflow should align team members, drive quality code changes and keep teams engaged.

Onshore software developers often have similar work processes and ethics as the clients they serve. There are; however, some downsides to working with an onshore software developer in terms of team and workflow management.

Pros

Onshore software development provides organizations with a much higher level of control over the project and workflow when collaborating with team members. Teams are able to meet within the same time zone and individuals speak the same language.

Cons

Organizations that work with onshore software developers may require an increased effort to manage all team members. Organizations may also encounter challenges with maintaining a productive and efficient IT infrastructure.

The Pros & Cons For Offshore Software Development

In a growing business, organizations require the right systems to manage customer service, sales, market automation and other business elements. Proper workflow can help businesses streamline their team’s processes. Businesses of all sizes and in all industries require proper team and workflow management. Offshore developers may have unique but overall efficient team and workflow management techniques.

Working with a software developer in a different country can present certain opportunities and challenges. Compare the pros and cons of team and workflow management for offshore software development companies.

Pros

Working with an offshore development company enables businesses to execute multiple projects at once. Organizations can get more done when they have individuals working during both office and non-office hours.

Cons

One of the biggest disadvantages of working with offshore developers is that it can be incredibly difficult to collaborate with a team that is located in a different time zone. Offshore developers may also not be accustomed to a company’s typical workflow and processes and may not share the same native language, meaning things can easily get lost in translation.

QA & Testing Processes

Mistakes made during the software development process can negatively impact projects in both time and money. QA and testing processes are designed to help catch errors and potential problems before progressing to the finalization of the product.

Software quality can be broken down into two main levels: functional and non-functional. Functional refers to the product’s compliance with functional requirements, while non-functional refers to the system’s inner architecture and characteristics.

Through QA and testing processes, companies can achieve continuous and consistent maintenance and improvement of processes. Testing aims to detect and solve technical issues while also assessing the overall product performance, usability, compatibility and security.

Although testing is designed to detect possible defaults within a piece of software, there can never be a 100 percent guarantee that no defects are present. Keep this in mind when comparing QA and testing processes between onshore and offshore software development teams.

The Pros & Cons For Onshore Software Development

Quality assurance and testing are integral components of the software development process. These components consist of a comprehensive assessment of the software to ensure that it meets the client’s goals and requirements.

Testing allows organizations to maintain the quality of the software and gain their client’s trust and confidence. The end product will ultimately have fewer maintenance costs and will perform consistently, accurately and reliably.

The QA and testing processes among onshore software development companies will often be familiar to local businesses.

Pros

Choosing an onshore development company gives organizations greater control and supervision of the QA and testing processes, resulting in fewer mistakes and less time spent resolving bugs and other issues with the software.

Cons

There are no major cons associated with QA and testing processes for onshore software development companies.

The Pros & Cons For Offshore Software Development

The QA process involves many important stages, starting with a comprehensive review of requirements. Developers must be aware of the client’s requirements for a product before starting the project. Reviewing requirements also ensure that the testing will be consistent and complete. Having a solid test strategy in place is critical to the overall success of the project. This strategy should outline the scope of the work, the budget and what tests will be needed.

The QA and testing processes among offshore software development companies can differ from their onshore counterparts. Here is a look at some of the pros and cons of QA and testing processes for offshore software development.

Pros

In some scenarios, an offshore development company will have separate teams in place for execution and QA; however, this is not always the case.

Cons

Organizations have little control and supervision of the QA and testing processes, which can lead to frequent mistakes and more time spent fixing bugs and other issues that arise with the software.

Time To Market

Time to market refers to the amount of time needed to bring a product to fruition. Time is measured starting from the generation of the idea for the product and progresses through the design cycle, product development and the ultimate launch of the product on the market. It is easier to predict the time to market when a company’s product development product is both effective and streamlined.

Time to market remains an important aspect of software development regardless of whether an organization chooses to work with an onshore or offshore developer. However, the efficiency and workflow of a particular team can greatly impact the time to market.

Some teams waste time and money due to overhead, such as administrative paperwork, repetitive work, poor information management, unnecessary features and insufficient product launch.

The Pros & Cons For Onshore Software Development

Choosing the right software development model can have countless benefits for a business. An effective time to market plan can provide benefits like a boost in margin revenue, efficient managerial processes, higher market shares and staying ahead of the competition.

A company’s capacity to decrease its time to market will depend on the strategies used to accelerate it, such as the integration of new technology into the business.

Onshore software development companies are often skilled at assessing an accurate time to market. However, there are some downsides to consider.

Pros

Time to market for onshore software developers may be slower due to greater quality control measures but in turn, mistakes and time spent working on debugging issues is greatly reduced. This results in a more fleshed out and reliable product at launch, as well as a faster and lengthier adoption time for software users.

Cons

The biggest disadvantage for onshore software development is the slower time to market process.

The Pros & Cons For Offshore Software Development

Modern business environments require agility to quickly understand and adapt to new information, trends and developments. Reducing time to market requires companies to look closely at current development processes. Companies must go through a series of steps to turn an idea into a live product, including identifying possible bottlenecks, constraints and inefficiencies.

There are several pros and cons of time to market for offshore software development.

Pros

Offshore software developers are often able to get a product to the public quicker. This can be advantageous for organizations that have competitors who are also trying to get a similar product to market.

Cons

QA and testing can suffer when development times are sped up, increasing the risk of bugs after launch and costing organizations more time and money. Coding patterns can also vary on a developer by developer basis.

While offshore development hourly rates often start at just $30 an hour, onshore rates generally start at $130 per hour. These rates are simply averages and do not reflect the exact amounts charged.

Onshore Development Rates & Software Development Categories

When asked how much onshore software development costs, the most common answer is “it depends.” While vague, this answer best reflects the reality of software development costs among onshore software developers. Ultimately, it comes down to the people-hour, as well as the technology stack involved in building the software.

Onshore development rates also vary considerably based on the category of software development software, such as enterprise-grade software, high-market software, mid-market software or low-market software. Here is a closer look at the average starting development rates for onshore development companies.

Enterprise-Grade Software Development Companies

The most costly category of software development is enterprise-grade software development. An enterprise system is typically priced based on how large and complex the software program is and the deadline set by the organization.

The number of team members also greatly affects the price. The average enterprise-grade app requires a diverse team of professionals, including a project manager, UI Designer, UX Designer, Creative Director, Mobile App Engineer, Technology Director, Web Application Engineer and QA Analyst.

Some of the most common examples of enterprise software include billing systems, order processing, customer relationship management, marketing automation, content management systems, customer support and business intelligence.

Minimum Project Cost: $200,000
Hourly Rate: Average Starting Rate is $350 per hour

High-Market Software Development Companies

There is a common misconception that the only aspect that businesses must consider when it comes to sales is the difference between products. However, software development rates can also vary based on other factors, such as the market.

A high market share typically translates to greater sales with less effort to sell more. There is also a strong barrier to entry for competitors. In addition, a high market share means that as the market expands, the leader typically gains more than others.

Minimum Project Cost: $125,000
Hourly Rate: Average Starting Rate is $220 per hour

Mid-Market Software Development Companies

The mid-market category of software development tends to offer clients the best balance between quality and cost. These teams of developers typically consist of between 10 and 100 employees and often work with small and medium-size businesses.

Mid-market software development companies generally have a strong track record of success and are a great choice for budget-conscious buyers in search of quality services at an affordable cost. Due to the smaller size of these companies, they can sometimes be riskier than their larger counterparts. Be sure to read reviews and perform extensive research before choosing a mid-market software development company.

Common mid-market product categories include sales engagement, conversation intelligence, contact center, mobile app analytics and human resource management systems.

Minimum Project Cost: $50,000
Hourly Rate: Average Starting Rate is $110 per hour

Low-Market Software Development Companies

Low-market software development companies tend to operate lean businesses with just a handful of employees to maintain low expenses. The average low-market software development company has between just 2 and 10 employees, including the company owners, and typically works with startups, small businesses and medium-sized regional companies.

There are many types of projects that organizations can complete using low-market software development companies, such as line of business applications, operations improvement applications, workplace applications, process automation applications, customer engagement applications and legacy modernization applications.

Minimum Project Cost: $10,000
Hourly Rate: Average Starting Rate is $85 per hour

Offshore Development Rates

The cost of offshore development companies can vary considerably, ranging from just a few hundred dollars to thousands for a single project. Software development project costs also depend on the country where the developer operates. Typical offshore development rates are between $25 and $75 per hour.

There are also many factors that can influence developer costs, such as developer experience and expertise. For example, a junior developer is typically paid significantly less than a senior developer. Programming languages can also impact the cost of offshore development. Some languages are more complex and difficult to learn, making these programming languages more costly to obtain.

Project complexity also plays a role in offshore development rates. The more complex a project is, the more money an organization can expect to pay for services. More complex software development projects often require a larger team with greater experience and expertise.