The two most commonly used terms interchangeably in the software development space are offshoring and outsourcing. Each one of us is well-acquainted with these terms but still are unaware of their actual meaning and implications. I am sure many of you will be surprised to know that both the terms have different meanings. Unfortunately, in today’s fast-paced world, businesses often fail to care about understanding these concepts as all they want is the best possible result.
Fortunately, today you will come across several offshore software development companies that offer the best possible services from their doorsteps. But before you pick a relevant one, it is very important to gain knowledge regarding the concept. The following post focuses on what is offshore software development and what is outsourcing, how they are beneficial and what is the difference between the two.
More resource on Offshore Software development
TatvaSoft – Offshore software development
Researchgate – Challenges in Offshore Software Development
The core benefits of outsourcing include 2
Offshore Software Development vs Outsourcing: – Spot the Difference 3
#2 Tasks 3
Meet Outsourcing
Outsourcing is pretty known across the globe and why not since it has offered a plethora of advantages such as low-cost development, increased ROI and creative solutions. Now, what exactly does the term outsourcing mean? Well, it is said when a company hires a tech partner to work on behalf of them. For example, if you are not in the mood to cook for your loved ones what you will do is you will order using relevant food apps. And they will deliver lip-smacking dishes for you! Similarly, when you outsource the work, the company accomplishes the task on your behalf. Today, several services can be outsourced. Right from manufacturing to retail, finance, payroll procedures, IT outsourcing, all you need is a reliable company or third-party service providers who can work wonders for you.
The core benefits of outsourcing include:
- Cost-effective venture with high-quality solutions
- Increased productivity
- You can focus more on your core activities
- Reduced the time to market
- Innovate and come up with intimidating solutions
- Rise in scalability and flexibility
- Access to huge talent pool all at once
- Freeing up lots of time, energy and resources
Meet Offshoring
Our next contender is offshoring. Much like outsourcing, even offshoring is pretty high in demand. Conducting an offshore software development project is said when all the operations are performed by companies located in different countries such as India, the Philippines, China, Vietnam, etc. Offshoring is about assigning work to companies located in different countries, sometimes different continents as well. At present, offshoring turns out to be pretty much kind of a hot topic due to the wide range of advantages it offers.
Some of its core benefits include:
- Reduced operational costs
- Access to huge talent pool
- High scalability and flexibility
- Companies able to focus on core competencies
- Round-the-clock services
- Cheaper Capital
- High-end quality
- Staffing flexibility
Offshore Software Development vs Outsourcing: – Spot the Difference
| Factors | Offshoring | Outsourcing |
| Meaning | Allocating business operations to third-parties in different countries | Allocation of not-so-important tasks to the third-parties within the same country. |
| Control | Since it’s an entirely different geographical location, gaining full control isn’t possible. | Here since the location is the same, gaining full control is possible. |
| Advantages | Low cost, gaining access to huge talent, faster time to market, round-the-clock services | Specialised skills at a reasonable rate, staffing flexibility |
| Cons | Geographical location is a huge risk, trust issues, language and cultural differences. | Lack of expertise, social differences, round-the-clock services is not possible here. |
Still, do you find outsourcing and offshoring similar? Well, let me elaborate on these aforementioned differences for you a bit. Just so that you can get a better perspective on outsourcing and offshore software development.
#1 Exact Meaning
Outsourcing is said when a business can utilise third-party services providers whereas offshoring is said when work is allocated to companies located in different countries. Of course, these are not full-time employees or dedicated employees of your organisation.
#2 Tasks
Outsourcing is done when you want to offer specific tasks within a process chain. Now, why do businesses tend to outsource these tasks? Well, it’s because they are tedious, repetitive, and time-consuming. By outsourcing these crucial functions, businesses can enhance productivity.
For offshore software development, businesses want to assign complex and complicated functions to a dedicated team that is located in another country. On and all, it is a deeper level of responsibility.
#3 Quality
When you outsource, quality might fluctuate at times but when you consider offshore software development, it does not compromise on the quality of work. And since here when you outsource, they aren’t regular members but that doesn’t mean it will highly affect the quality of the developed solution.
Whereas offshore team members are regular employees or external company members. So yes even though these guys are located in a different location, they will communicate with you precisely regarding your needs and offer fruitful results.
Conclusion
Which one is better, you may ask? Well, there is no cookie-cutter solution here, it depends on your situation. Each of these concepts has distinctive phases and has the potential to offer a plethora of advantages such as low costs, better operation handling and high-end results.
And this is it! So now I hope you know exactly the difference between offshore software development and IT outsourcing. Now it’s time to pick a reliable software development service provider who can nail it down for you when it comes to creating innovative solutions that can take your existing business to the next level. In case, still, there are doubts or queries regarding outsourcing vs offshoring, feel free to mention that in the comment section below.
