Risks to Avoid Working with an Offshore Software Development Company

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Offshore Software Development Company

Offshore programming is a form of offshore outsourcing. This is used to perform part of the company’s functions as third-party specialists. This is “borrowing IT resources from the outside.” The term “offshore programming” in the global IT industry denotes the provision of services for remote software development, performed independently of the customer and, as a rule, a foreign company with attractive development resources.

The Most Obvious Benefits

The main reason for working with offshore software development company Rademade.com is the traditional cost reduction. It can be from 20 to 40% savings on the internal staff or local contractors using the best offshore turnkey solutions.

Two factors are also taken into account. These are time constraints and necessary skills. Time constraints become critical when you need to quickly resolve compatibility issues between old and new versions of applications, and the efforts of existing qualified staff need to be directed to other priority areas. In this vein, the desire of the outsourcing companies themselves to provide quality services is reflected in the possible development of long-term relationships. However, there are some risks in cooperation with nearshore developers, and ways to avoid them should be about.

Goal Setting

Outsourcing is a management tool. Therefore, the main question that company executives should ask themselves before using offshore software development services is the question “why?”. Incorrect goal setting always leads to deceived expectations and customer dissatisfaction.

The goals and objectives of using an external vendor may be different. The main thing is to avoid the substitution of concepts and correctly fix them. For this, a working group can be created within the customer’s company. When the cost of the contract is more than substantial and the client is thinking about developing a serious IT project, it makes sense to involve external consultants. This will help to avoid the following risks in the development of an application or a website an offshore.

Risk # 1: Loss of Project Control

This is the most common risk. Often it is associated with a lack of information from the customer. Numerous trackers exist to track the development process. This is the first question that the customer must find out before starting work. The key to understanding and overcoming this risk is that the company and the developer must manage the product.

The ways to reduce this risk are:

  • constant monitoring of staff;
  • documentation of work performed;
  • work planning;
  • reporting on a regular basis.

Risk # 2: Hidden Costs

Although outsourcing is a cost-effective solution, it does not eliminate all problems. The customer, in any case, will have to take into account the associated costs.
The ideal way to deal with this risk is very simple. Companies need to be aware of potential hidden costs in the product development process. This will give a clear idea of how the decision to entrust the development to the offshore custom software development company was cost-effective.

Risk # 3: Language Barrier

  • Communication is vital for outsourcing. If a third-party team does not know the language of the customer, then it is impossible to work together.
  • To avoid this risk, the customer should make sure that he and the vendor really understand each other, regardless of the language they speak.
  • This is also true for the difference in mentality. Fundamentally different approaches to work can significantly affect the result, both expected and real.

Risk # 4: Quality Control

Of course, everyone needs an end result of a level of international quality standards. But sometimes there are mistakes. This may be a working product in which critical bugs will appear during the first testing. In this case, the developer is no longer responsible for the project. Or maybe he just disappeared from the market. To avoid this situation, check whether the offshore software development company adheres to the latest quality standards.

Risk # 5: Data Protection

Choosing a certified and reliable developer is a crucial factor in preventing information security threats, especially if the project contains valuable data.
Pay attention to the practical side of the team. Find out if they had to deal with confidential information before. Familiarize yourself with their security measures and see how they have addressed data protection problems in the past. To reduce this risk to an acceptable level, an IT outsourcing contract is of paramount importance. It should clearly define confidential information and spell out the obligations of the parties for its protection and non-disclosure. The perfect option is a separate non-disclosure agreement (NDA).

Risk # 6: Disagreements in the Legislation

Legal norms are fundamentally different in different countries. And often, this complicates collaboration between companies. In order for all the work, contracts, and settlements to be lawful and transparent, the company customer must choose an outsourcer operating in the most similar legal field.


To secure the product development process, only a few conditions must be met. The customer should:

  • clearly plan a business strategy;
  • predict the profitability of IT outsourcing;
  • not transfer too many processes to one contractor;
  • cooperate only with proven and trustworthy performers.

With this approach, offshore development will be a reasonable solution, and the company will be able to get a decent product at output.

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