Offshore USA: 7 Reasons to Outsource in America
This blog post has been researched, edited, and approved by Wayne Hippo. Join our newsletter below.
Offshore USA: 7 Reasons to
Outsource in America
By Wayne Hippo
March 4, 2019
Every growing company needs software. Technology is what drives efficiencies that lead to greater profit, and therefore most corporations will turn to create proprietary software to sharpen their cutting edge.
But when software is not your core competency, you look to outsource the development of your grand ideas. This is what has worked for millions of firms the world over. Often, sacrifices are made when it comes to saving money by shipping development overseas. Some of the sacrifices are clear; others are discovered when you are waist high in the project.
Let’s take a serious look at the top reasons we hear from our clients that have off-shored overseas, then do a u-turn and offshore to the small-town USA:
Cost
While it may appear at the outset that you’re saving significantly when you compare a $20/hour coder in Asia to a $150/hour coder in the US, you can bet you’ll be getting what you paid for. Many of our clients have pointed out that other non-price issues added so significantly to the
the overall cost of the project that they would have been better off just keeping the project on- shore and perhaps paying a bit more in wages.
Security
Offshoring development overseas can expose companies to data leaks. Some reports show that 30% of companies that have offshored development have security breach incidents. Even those with NDAs suffered IP loss. Your company’s USP could be littered with more than just bugs – and the resulting court and litigation costs could put your balance sheet at risk.
Language
Someone once described software development to me as a complex social process where people share complicated ideas and abstract concepts. While many eastern Europeans and Asians speak excellent English, there can still be a lost-in-translation opportunity that is further heightened by electronic communication. Intermingling development-speak with English and a third language can spell disaster.
Culture
The industry your business targets might be a particularly perplexing one for those outside of the American culture to truly understand. Take healthcare, for example. The American system is unique and comes with a plethora of acronyms and processes that most could never understand. How, then, could they possibly write code that enables the American healthcare system to work better? You can apply that concept to other industries as well – finance, law, and insurance spring to mind.
Time
It’s not just the time zone that will get in your way, but the approach to both time management and length of time to complete a project that could make the difference between a successful outsource and a complete failure.
Impact on Jobs
The more we offshore tech jobs, the more our economy takes a hit. “But I’m not responsible for our economy; I’m responsible for my company’s bottom line.” Fine, but don’t take a short-term approach to saving a few bucks. As we noted above, sending your development to Asia is going
to cost you more than you expect it to. And that’s just the money. Imagine to whom your company will sell its products when the highly experienced American developers are out of work…
The Investor’s Perspective
Developing your competitive advantage is the real reason behind owning your own software instead of relying on off-the-shelf systems. We’ve heard of late that many angel investors and venture capitalists will not invest in entrepreneurial endeavors that have off-shored their software development. Certainly, that is not true in all cases. But do you need to make that the factor that determines your ability to secure funding?
It’s critical to find a partner that works with you to determine the feasibility of key features, to create a timeline that works for you and your project, that delivers and is easy to communicate with. It’s also important to take a longer look at the impacts on your business and your community. Over the next few months this blog will dive more deeply into the above reasons. Keep your eyes on this blog, and if you have questions in the meantime, don’t wait a single minute to give us a call. We’d be happy to explain how PS Solutions addresses each of the above concerns – right from the USA.
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