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The Main Differences Between Onshore And Offshore Software Development

Companies seek to outsource their software development in order to benefit from a high level of expertise, advanced IT skills, diversify their risks, and save on the cost of doing business. When it comes to software development, there are two main options used by businesses; the onshore software development and the offshore software development. In onshore software development, you are outsourcing your business processes within the country.

On the other hand, offshore software development means that you are outsourcing your business processes overseas. This article will explore the main differences between onshore and offshore software development. The Main Differences Between Onshore and Offshore Software Development:

1. Time Zones

There are a number of differences between onshore and offshore software development. First, with onshore software development, you will be working with the same time zone, or insignificant differences in time zone. Therefore, you will be able to engage with the outsourcing company in real time. In addition to that, a face to face meeting is more feasible.

This is not the same for offshore software development where the differences in time zone can be a challenge. For example, if you are located in California, and you outsource your services in Beijing, you should take note of a time difference of 15 hours, and you must make some adaptations to allow effective communication.

2. Cultural Difference And Language Barrier

Onshore software development means that your business will not face cultural incompatibility and language barriers. You are outsourcing your services to a company that is located within the borders, and such a company has the same level of corporate exposure as you have.

It will be easier to make an alignment of your business goals and objectives. This is totally different when it comes to offshore software development. In this, you might experience language barriers and cultural incompatibility. Such challenges can lead to misunderstandings in the running of the project, delays in project completion and an escalation in the planned cost of the project.

3. Cost

The cost of doing business is an important factor to consider and the cost differs greatly between onshore and offshore software development. In the US, onshore software development comes with a high price tag. This is because the US has a high cost of living and Americans expect to receive a high compensation.

If your most important thing is to save the cost of overhead, then the best thing is to take offshore software development. Countries in Asia and Eastern Europe are willing to take a lower compensation, and at the same time, they can give a level of quality that is similar to what is offered in the US.

4. Legal Protection

The onshore software development provides a more enhanced legal protection framework. Should there be an injustice done on you, you can seek redress in a court of law. Moreover, with onshore software development, you will be in a better position to protect your intellectual property rights.

The offshore software development works on mutual trust. You believe and trust that the other party will fulfill his or her obligations without fail, and will follow business ethics. Should there be an injustice done on you, or unethical businesses practice on your partner, there is nothing much you can do to get compensation.

5. Talent Pool

Talent Pool

If you choose onshore software development, then you are going to have a reduced talent pool. Again, with onshore software development in the US and Western Europe, the employee turnover can be high. This is because there are many available jobs, and employees tend to apply for a better job each time.

This is different from offshore software development where you will have a lot of options to take. With offshore software development, you will be able to hire the best minds and talent, without the need to process visas for such countries. Moreover, countries in Asia and Eastern Europe can commit to you for a long time as long as you are fulfilling your obligations.


The future of doing business will lie in having a remote culture. Therefore, businesses must be prepared to exploit the opportunities that are going to come with this space. Choosing either onshore or offshore software development will help you realize your business objectives in an efficient and cost-effective way.

Overall, choosing either the onshore or the offshore software development will depend on your company and the objectives of your business.

Hue Douglas is the Chief Editor of Zumboly and a former Journalist. With a Bachelor of Arts in Communications from Seattle University, he writes mainly about technology, health, and business fields since he finds them engaging and fulfilling. Through writing many articles and gaining experience, he has evolved into a storyteller who shares his knowledge through these articles.