5 Common Risks of Offshoring Software Development

Explore the challenges and risks associated with offshore development teams, emphasizing the importance of clear communication, financial considerations, geographical risks, privacy concerns, and the complexities of the development process. It ultimately advocates for the advantages of working with a domestic development team like Nexrage Studios.

Article by
Fraz Jamil
Article date
October 16, 2019

Why managing AI risk presents new challenges

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The difficult of using AI to improve risk management

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How to bring AI into managing risk

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Pros and cons of using AI to manage risks

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Benefits and opportunities for risk managers applying AI

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Challenges in Communicating With Offshore Development Teams

It already takes a high level of technical expertise to communicate effectively when working with a domestic development company. Upon transitioning to offshore development, you will quickly notice that cultural dissonance and language barriers make communication even more painstaking. Even if you can find talented professionals, you will still need to be incredibly precise in the instructions you provide to them. If the procedures are not laid out exhaustively upfront, you risk spending countless hours correcting a mistake that occurred due to an unexpected miscommunication. With a domestic team, like Nexrage Studios, you can trust that your expectations will be clearly understood without needing to provide constant oversight and guidance.

Furthermore, even if the specifications are outlined up front for an offshore team, you then run the chance of having a stiff design that was not altered appropriately during the design stages. While having a clear strategy available is helpful, it is even better to work with experts who know how to identify flaws in that plan and reposition themselves to solve them before moving forward. We know that producing your vision is our main objective, so we research and ask questions in order to ensure that your project stays on track to success.

Financial Risks When Offshoring Software Development

When working with offshore development teams, it is difficult to accurately estimate overall costs, therefore some who choose this route end up going over budget on their projects. The upfront cost savings of working with a cheaper offshore development team may seem appealing, but having little to no actual reach can result in catastrophic project failure.

For instance, if the offshore company chooses not to follow through with a contract, you will have great difficulty enforcing a contract outside of your home country. With this in mind, some developers will be looking to take advantage of you by overpromising the level of services they can provide. You may try to circumvent this by only paying fixed price contractors, but if the developer is still unable to complete the project due to technological restraints or poor management, there is little that can be done to recoup the costs.

Geographical Risks That May Compromise Your Project

Offshore teams that offer the most budget prices for their services are often located in regions where infrastructure is not as extensive as within the U.S. For example, when outsourcing work to the Philippines, flooding is a very common occurrence. People can barely leave their homes, let alone reach their workplace.

Likewise, natural disasters like tropical storms may cause rolling blackouts that leave your development team unable to work for days, weeks, or even months depending on the severity of the storm. The same applies to geopolitical unrest and socioeconomic issues—if the country you are sourcing your development from falls into a state of unrest, your project will suffer the consequences. With a local team, you can have more confidence that these issues will be far more rare.

Privacy Concerns When Offshoring Software Development

Information security risks are also more prevalent when working with overseas teams. If the offshore company is vulnerable, your software may end up in the hands of an unauthorized party. This compromises your future products and could lead to your firm’s ideas being stolen or repurposed by other organizations. The intellectual property laws in the U.S. ensure that choosing a domestic developer like Nexrage offers the highest level of protection for your ideas and software products.

Offshore Outsourcing Complicates the Development Process

The management and technical debt that is accrued in offshoring is oftentimes not worth it. Because of the communication difficulties that exist due to cultural, linguistic, and technical differences, it will be nearly impossible to coordinate a mid- to large-scale development project without constant oversight from a local team of technical advisors.

Budget development teams often look to cut costs by avoiding risk and not taking significant creative direction. In the worst case, this translates into a development team that cannot visualize the bigger picture of the project and inevitably leads to an end product that is not correctly implemented, nor scalable. A product that doesn’t have the big picture view in mind will struggle in the future when it requires core updates and implementation of new features. This alone can double your long-term development costs. Head over to ourmobile development servicesto learn more about our in-house services.


Domestic firms like Nexrage Studios stay up-to-date with cutting edge advancements in the software industry. Therefore we not only acknowledge the big picture, but also leverage our expertise to help make suggestions you had not considered, in order to preemptively solve issues that may not have been apparent from the start. That’s the power of developing domestically—click the link below to speak to our sales and partnerships team. They will help you determine how Nexrage Studios can help you realize your software project.

Visit our contact page to learn more on how Nexrage can help during these difficult times.

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Check out our blog on AI Driven Development in 2020 .