Are You Taking Risks with Your Offshore IT Development Model?

Be wary of whatever savings offshore IT development promises. Those low costs come with real risks.

As many reshoring US manufacturers already understand, outsourcing production subjects the brand at large to certain risks if company leaders aren't careful. Poor quality from lack of oversight, increases to product lead times, additional shipping costs and border-crossing fees, counterfeit components – the list goes on and on. To avoid these needless complications, American companies that once produced goods overseas have brought back hundreds of thousands of jobs to the U.S. since 2010.

Someone should tell service-sector companies outsourcing IT development offshore. Many of these same dangers apply to them as well.

Data quality drop-off

Simply put, cheaper labor, language barriers and a lower standard for quality assurance than US developers are two things that do not normally breed IT excellence. Not only are third parties under the offshore model unconcerned with delivering a high-quality product, they usually lack the resources to do so – part of the reason why they can undercut onshore developers when it comes to price.

Moreover, flaws in the overall design of an IT project outsourced offshore may go uncorrected. Those require highly skilled professionals to right, which again, inexpensive offshore operations lack to trim their own operational costs. 

"Outsourcing IT offshore makes financial sense, right? Maybe not."

Cost catastrophes

You can't stop the world from going digital. But while virtual environments can potentially save a lot of money for the businesses who know how to leverage them, Deloitte reported IT typically represents the highest administrative costs. So outsourcing IT offshore makes financial sense, right?

Maybe not. To keep prices low, many third-party developers stick to one standard model. Deviate from the norm and your company could quickly rack up extra fees. Furthermore, even though another company may still manage your IT development, your business is still responsible for overseeing compliance. That's not free.

And what are the chances offshore IT operations will fully understand and adhere to the latest US regulations surrounding IT development in your field? Are you willing to take the gamble to save a little green? Will third-party IT costs plus managerial oversight plus the threat of a compliance violation really offer considerable savings over onshore outsourcing?

Cyber(in)security

Monitoring your intellectual property becomes a lot harder once you pass off your project to developers half a world away. According to one report from Trustwave Holdings, Inc., 63 percent of all "incident response investigations" involving data breaches or stolen IP had one thing in common – offshore IT support vendors.

"63% of all incident response investigations had one thing in common – offshore IT support vendors."

Yes, there are steps businesses can take steps to keep their partners on the up and up, but a few important points to consider. First, additional oversight further adds to costs. Second, you probably aren't well-versed in the nuances of IP-related law (or lack thereof) in foreign countries. Lastly, in countries without restrictions on government intervention, foreign agencies could eyeball your project as third parties toil away. It's not a conspiracy theory – it could happen to you.

Keep IT at home with an onshore development model

Businesses have a better chance at maintaining quality, cost and security when relying on organizations like GenesisSolutions and its Localized IBM Maximo and CMMS Development Team Model.

• Quality remains king: With quality stops built into the design, development and delivery stages, your onshore experience never skimps on high-caliber production.
• Cost mitigation at every turn: A strong onshore model respects every company's desire to save money by finding a middle ground between inexpensive offshore operations and full-time onsite technicians. That’s why you’re outsourcing in the first place, right?
• Safeguard guarantee: By outsourcing IT projects to remote onshore specialists, development exemplifies the highest security standards.

Seeking a Solution? Check out our Onshore Development Team