The benefits of outsourcing are clear, but there are some hard decisions you have to make, beginning with where you’re going to outsource software development projects of the company.

Now, there are good developers (and bad) all over the world. However, every geographic location has its strengths and weaknesses. 

While communication may be easier with an American firm, it may be expensive. Or while time zone issues may make coordinate difficult with Indian firms, they are relatively cheaper and readily available.

It all comes down to 2 things:

1. What is your budget?
2. What are your preferences and priorities?


 The following table lays out the average price ranges in various pricing zones and developer tiers.

Pricing zones are geographical zones that represent countries with different developer prices. The differential is primarily due to different cost of living in countries.

Pricing tiers represent the nature of a service provider in each zone. Higher tiers correspond to experience with larger companies (like Fortune 1000) and demonstrated experience with security and compliance.


Now, why pay a higher price for certain geographies when you can get the stuff in Zone 3 for much less?

You pay higher prices for certain “comforts”. If you are resource constrained, then you need to think about the trade offs between the costs and the “comforts”. Lets analyze these comforts:

1. Time Zones

For US clients, it’s relatively easier to communicate with developers in North or South America, as the time zone difference is limited. While at times, a 24-hour work day (you work during the day and the developer works at night) can make things productive when you’re working with countries in Zone 3 like India, its difficult to realize the true benefits and get the best practices down.

2. Design Collaboration

Design requires a lot of communication and it’s often useful to sit down together and discuss the nuances. Further, since design is culturally subjective (something that looks good in India, may not necessarily look good in the US), It can become a little difficult to collaborate on design. So, if the product is design heavy, it may make sense to go with a local team. That said, if a provider in Zone 3 has a great design portfolio that you like, the above generalization, of course, does not hold true. Portfolio trumps geography!

3. Cultural Fit

A local company may be reading the same news channels, may be following the same bands etc. Hence, culturally, they may be the better fit. You can have drinks with them, invite them to the office etc. If you prefer that, a local team might be a better choice.

 4. Compliance Issues

At times, some federal/government apps need developers to be security compliant or some banking or healthcare apps need regulatory certifications. You may not have a choice then, but to go with local service providers.

As you can see, deciding where to outsource your software development to is based on several factors, each of which must be considered carefully before making a final choice. If you’d like more great advice on all things related to outsourcing, download our free ebook Outsourcing 101. This software development guide has tons of outsourcing tips that will steer you in the right direction.

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