Offshore software development has gained considerable momentum as businesses strive to maximize cost efficiency and tap into a global talent pool. However, hidden costs beneath the promising allure of offshore software development company can catch organizations off guard. Uncovering these submerged expenses is crucial for making informed decisions and ensuring a successful offshore software development journey. Software development is actually very rarely optimized to its full potential, and so often do decision-makers within this realm find themselves going over budget and amassing a lot of unexpected costs that can be easily avoidable with some tricks and tips. According to multiple sources, the average organization wastes 23- 42% of its development time and resources due to technical debt. By delving deeper into this ecosystem, we will shed light on the hidden costs that can emerge beneath the waves of offshore software development, exposing the realities an offshore software development company must navigate through to achieve its desired outcomes and avoid the unnecessary burdens caused by technical debts.
What does an Offshore Software Development Company provide and why are they popular?
Offshore software development services is a business process outsourcing (BPO) model that allows businesses to outsource their software development needs to a third-party company located in another country. This can provide businesses with a number of benefits, including cost savings, access to a broader pool of talent, and faster development times. Offshore software development companies typically offer a wide range of services, including offshore web development, enterprise software development, IT consulting, software testing outsourcing, and quality assurance. They can help businesses of all sizes to develop and launch new software products or to improve and maintain existing software systems.
What is Meant by Technical Debt?
Technical debt is a term used in software development to describe the consequences of taking shortcuts or making trade-offs during the development process. It represents the accumulated burden that results from choosing quick and expedient solutions, which may require future rework, refactoring, or additional effort to address.
Imagine you’re building a software application, and to meet tight deadlines or save time, you intentionally choose to write code that is not optimal or doesn’t adhere to best practices. This compromise allows you to deliver the software faster but comes with a cost. Just like taking on financial debt, this technical debt accumulates interest over time.
This interest takes the form of increased maintenance efforts, higher bug occurrences, reduced productivity, and a longer time-to-market for future enhancements or modifications. The morofe technical debt accumulates, the greater the burden on the development team, resulting in a higher cost to maintain, enhance, and evolve the software.
How Can Technical Debt be Amplified in Offshore Software Development?
Technical debt can be amplified in offshore development services due to several factors, such as communication challenges, distance, and cultural differences. Offshore teams often work in different time zones, making real-time collaboration and communication more difficult. Misunderstandings or misinterpretations of requirements can lead to the accumulation of technical debt. Moreover, offshore teams may have limited familiarity with the organization’s coding standards, leading to deviations and shortcuts that increase technical debt.
Additionally, the lack of face-to-face interaction and cultural nuances can further impede the effective identification and resolution of technical debt. These factors combined can exacerbate the impact of technical debt in offshore development, necessitating proactive measures to mitigate its effects. Now, we will dig deep into each one of these problems and mention how they can specifically affect your debt. This way, you will be aware and informed of these issues and have a better chance to combat them.
- Communication Challenges: Offshore software development often involves working with teams located in different time zones and cultural contexts. If technical debt is present in the software codebase, it can lead to misinterpretation of requirements, misunderstandings, and communication gaps. Offshore teams may struggle to understand and work with complex or poorly documented code, resulting in delays, rework, and increased communication overhead.
- Quality and Productivity Issues: Technical debt can impact the quality of the software being developed offshore. If the codebase carries significant technical debt, it may be more prone to bugs, errors, and inconsistencies. Offshore teams may need to invest additional time and effort in identifying and fixing these issues, leading to reduced productivity and increased project timelines as well as budgets.
- Code Ownership and Knowledge Transfer: The transfer of code ownership and knowledge from the onshore team to the offshore team is an integral part of offshore software development. However, technical debt can complicate this process, as poorly documented or poorly structured code can make it challenging for offshore teams to understand and take ownership of the software. This may require additional time and resources for knowledge transfer, code reviews, and documentation efforts.
- Skills and Experience Deficit: Addressing technical debt often requires specialized skills and expertise. If your offshore partner is inexperienced, new to the business, or simply lacks the talent to maneuver around certain aspects of the development life cycle, this will severely affect and accumulate your debt and lead you to invest in training and collaboration rather than your actual product. Leading to delayed time to market, further unwanted overhead costs, and micromanagement on your end.
According to a study conducted by McKinsey, a company has determined that its technical debt accounts for a significant portion, ranging from 15% to 60%, of its IT expenditures. Surprisingly, this cost is not factored into their business plans. The study also reveals that a different major bank estimates the collective tech debt costs of their 1,000 systems and applications to exceed $2 billion.
Is It All Black for Offshore Development?
Well, the simple answer is no. No, because technical debt exists regardless of the development model or strategy you’re abiding by, be it in-house or offshore; they may be different in terms of what causes them; nevertheless, they are there. And technical debt doesn’t always have to be a bad thing as sometimes certain shortcuts are necessary to get the job done, hence why it is called “debt.” However, this debt, when offshored, can seriously impact your product’s performance, maintainability, and scalability, which really goes against the reasons you chose to offshore in the first place.
In general, engineers spend about 33% of their time addressing technical debt, they might not be aware of it, but the data really does not lie. So, in order to avoid the accumulation of that debt when offshoring, be sure to choose a partner with extensive market experience and enough knowledge and education about the risks of technical debts. We also suggest you go as far as asking them to provide you with a solid strategy or plan to address their technical debts before allocating your development needs to them.
How to Manage Your Technical Debt?
Measuring technical debt can be challenging as it is a subjective concept, and its impact can vary depending on the specific context and project. And also, remember that measuring technical debt is not an exact science, and different organizations may adopt varying approaches based on their specific needs and constraints. The goal is to create awareness, identify areas of improvement, and prioritize efforts to manage and reduce technical debt effectively over time. With that being said, Mckinsey has developed a certain tool to estimate your overall debt coefficient based on comparing your past and previous tech budgets to the average standards found within your industry.
How Flairstech Can Help With Your Technical Debt?
The offshore software development model can be tricky, painstaking and require a lot of time and effort to both manage and properly maintain for the best results possible. With Flairstech, however, we offer you streamlined and scientifically proven and tested solutions that guarantee you a smooth, seamless, and frictionless approach to development that will most certainly reduce your technical debt, and here is why:
- We have over 1,000 available talents delivering top-notch results from three continents (North America, Europe, and Africa) covering every language and time zone on the planet.
- Over 100 global enterprises depend on us for their Software development, Technical Support, Customer Support, and digital solutions needs.
- Our size, however, does not affect our agile processes, as we have fast and exceptionally efficient processes when it comes to hiring and time-to-market.
- We guarantee the products we deliver for life.
- We will cut your development budget in half, increase your overall output, and achieve the desired results.
If you need any assistance deciding on a digital solution that will elevate your business or have any questions regarding the development ecosystem in general, schedule a free one-on-one consultation now, and one of our engineering managers will gladly assist you.
FAQS:
What is Technical Debt? And how can offshore software development companies avoid it?
Technical debt is like taking out a loan. It can help you get your project done faster or cheaper in the short term, but it will cost you more in the long run.
There are two main types of technical debt: intentional and unintentional. Intentional technical debt is when you consciously decide to take a shortcut to meet a deadline or save money. Unintentional technical debt is when you make a mistake or don’t follow best practices.
Technical debt can have several negative consequences, including increased maintenance costs, reduced reliability, and increased security risks. There are many things that offshore software development services companies can do to manage technical debt, including identifying, prioritizing, and repaying it.
By being aware of technical debt and managing it effectively, you can help to ensure that your offshore software development projects are reliable, secure, and easy to maintain.
What’s the difference between Technical Debt and Functional Debt?
Technical debt and functional debt are two essential concepts that offshore software development companies should be aware of. Technical debt is the accumulation of shortcuts and compromises made during software development, while functional debt is the accumulation of features and functionality that users do not need or want. Both technical debt and functional debt can harm the quality of software, but they can also be managed effectively. By identifying and prioritizing technical debt and implementing a plan to repay it, it is possible to reduce the risk of future problems. Similarly, by identifying and removing functional debt, it is possible to make the software more user-friendly and easier to maintain.Technical debt is often incurred when developers make trade-offs between time and quality. For example, a developer might choose to use a quick and dirty solution to a problem in order to meet a deadline. This can save time in the short term, but it can make the software more difficult to maintain and update in the future.
Offshore software development companies should identify and prioritize technical debt and implement a plan to repay it. This will help to reduce the risk of future problems. They should also identify and remove functional debt, which will make their software more user-friendly and easier to maintain.
How can offshore software development companies tackle technical debt head-on?
Technical debt is a common problem in software development, and it can be even more challenging to manage when working with an offshore team. However, there are several things that offshore software development companies can do to tackle technical debt head-on.
One of the best ways to tackle technical debt is to choose a partner with experience in managing technical debt. Offshore software development companies with such experience will be able to address your technical debt early on and help you save time and resources. These companies usually have a process to manage your technical debt, which helps ensure it’s dealt with promptly.
In addition to choosing a partner with experience, offshore software development companies can also take steps to prevent technical debt from accumulating in the first place. This includes thoroughly using well-defined processes and standards, documentation, and code testing. By taking these steps, offshore software development companies can help to reduce the risk of technical debt and ensure that their software is well-maintained and reliable.
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