6 hardest offshore software development challenges and how to solve them

12 min read
June 10, 2024

Offshore software development can be a great choice for your business.

But, it isn’t easy by any means.

Poor communication, cultural differences, time zone differences, and many other factors can derail and make collaboration with offshore companies and teams difficult.

Here, we’ll cover the 6 hardest offshore software development challenges you might face and how you can solve them.

Let’s dive in!

What is offshore software development?

First, let’s cover the basics – what is offshore software development?

Offshore software development is when you outsource development to a company or team in a different country – specifically one that’s geographically far away from you.

It’s a very popular outsourcing model and some of the biggest companies in the market outsource development offshore.

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And there’s a good reason for that.

Offshore software development comes with a lot of benefits, like:

  • Lower development costs
  • No administration overhead
  • Easy scalability
  • Getting access to a large talent pool

Of course, lower costs are the main reason why offshore development is so popular.

That’s because labor costs are lower in much of the world, especially compared to North America and Western Europe.

Here’s a comparison of the average software engineer salaries in the U.S. and select Central and Eastern European countries:

Average software developer salaries in Eastern Europe

So, it’s no surprise these countries are some of the most popular offshore development destinations.

And the best part?

When you outsource to Europe, you get access to highly-skilled engineers with top-notch technical and English skills.

However, offshore software development isn’t always sunshine and rainbows and sometimes getting it right can be very challenging.

But, that’s why we’re here – next, we’ll discuss the main challenges you might face and give you tips on how to deal with them.

6 offshore software development challenges

Now, we’ll cover the top 6 offshore software development challenges (and how to solve them) in more detail.

Poor communication

Poor communication can kill your project before it even gets off the ground.

And that’s especially true when you offshore development.

If you have poor communication with your offshore team, you run the risk of unnecessary delays and errors – and that can cost you a lot of money.

On top of that, you won’t be able to get the most out of the team’s expertise and experience.

Here’s DECODE co-founder and CEO, Marko Strizic, sharing his take on how clear and open communication benefits you during development:

Communication in software development is like the mortar holding bricks together in a building – without it, it falls apart.

So, what’s the best way to ensure good communication with your offshore development team?

The key is using both asynchronous and synchronous communication methods with the team.

Here’s when you should use each method:

When to use asynchronous vs synchronous communication in remote teams

You need to address any potential communication barriers before the team starts working on your project.

Make sure you have clear and easy to understand communication guidelines in place and that the team can come to you if they have any questions.

This way, you’ll start your project off on the right foot.

The problems poor communication creates

  • Project delays – poor communication often leads to misunderstandings about requirements and timelines, which can significantly delay and disrupt your project
  • Increased costs – miscommunication about requirements can mean that your team builds the wrong features and fixing that will increase your development costs
  • Low team morale – consistent communication issues will frustrate your offshore team, which will result in low team morale and decreased productivity

How to solve those problems

  • Establish clear communication protocols – you should have clear guidelines in place on how and when to communicate with your offshore team before you start working with them
  • Have regular check-ins – make sure to schedule daily or weekly meetings to make sure everyone is on the same page and your project stays on track
  • Encourage open communication – you should create an environment where members of your offshore team feel comfortable sharing their thoughts and asking questions, which will prevent misunderstandings

Lack of agility

Agile methodologies are the gold standard in modern software development.

They work, too – Agile projects are on average 28% more successful than projects that use traditional development methodologies.

A huge reason for that are the 4 core Agile values, outlined in the Agile Manifesto:

4 Agile values

Agile methodologies like Scrum or Kanban emphasize collaboration and iterative development.

And they can be challenging to pull off when working with a remote offshore team.

However, challenging doesn’t mean it’s impossible.

You’ll need to adapt your Agile methodology of choice to working with a remote team on the other side of the world.

But, the pay off in the end is worth it.

The problems a lack of agility creates

  • Inflexible development processes – without agility, your development processes will become inflexible which will slow down development and increase costs
  • Missed opportunities – Agile methodologies emphasize flexibility and quick adjustments based on changing requirements or market conditions, without agility you might miss crucial opportunities
  • Slow response to issues – a lack of agility means that problems and bugs aren’t addressed quickly, which can erode customer trust and satisfaction

How to solve those problems

  • Adapt Agile practices to remote teams – you should modify the Agile practices you use to accommodate different time zones and work environments – tools like Jira and Trello will help you do that
  • Do regular retrospectives – make sure to hold regular retrospective meetings to continuously evaluate and improve your processes
  • Provide training – you should provide training on Agile principles and practices for all team members to ensure everyone’s on the same page and knows what to expect

Low quality standards

Low quality standards are a major challenge when it comes to offshore software development, especially if you pick the wrong company to partner with.

And they can cost you a lot of money – poor software quality costs U.S. companies $2.42 trillion every year.

Also, the longer you wait to fix issues with your product, the more expensive they are to fix.

Fixing a bug after your product is already launched can be up to a 100 times more expensive than addressing at the start of development:

Cost of bugs

So, you need to have rigorous quality assurance (QA) standards in place and clearly communicate them to the offshore team you hire.

This way, they’ll know what to expect and you’ll ensure your product meets quality standards.

And that’s key to a successful partnership.

The problems low quality standards create

  • Product failure – low quality standards lead to a product that crashes, has lots of bugs, and doesn’t meet user expectations
  • Higher maintenance costs – low-quality code requires extensive maintenance and rewriting, which can significantly increase maintenance costs
  • Customer dissatisfaction – your users expect to use reliable software and a poorly-made, buggy product will frustrate them and cause them to stop using it

How to solve those problems

  • Have rigorous testing protocols in place – if you have rigorous testing protocols in place, you’ll ensure your product meets quality standards before you release it
  • Do regular code reviews – regular code reviews will help you catch any issues early and help you maintain high code quality
  • Set clear quality standards – you should define clear quality standards for code, testing, and documentation and communicate them to your offshore team so they know how they’re expected to work

Significant time zone differences

Significant time zone differences can be a huge problem when working with an offshore software development team.

Let’s say you’re based in New York and you hire an offshore team from India.

The team will be 9 hours and 30 minutes ahead of you, so coordinating with them can be difficult.

Time zones

You might only get an overlap of only a couple of hours per day, so collaborating with the team in real time might be limited.

And if you’re not careful, this can lead to development bottlenecks and unnecessary delays.

That’s why you need to account for time zone differences from the start and discuss mitigation strategies with your offshore team.

For example, you should make sure that key meetings, like daily stand-ups or sprint planning meetings, happen during overlapping hours.

This way, you’ll minimize the impact time zone differences have on your project.

The problems significant time zone differences create

  • Delayed decision-making – time zone differences, i.e. if your offshore team isn’t available at the same time as your in-house team, can delay decision-making which can result in missed deadlines and unnecessary project delays
  • Bottlenecks – if your offshore team is in a wildly different time zone you might get bottlenecks in your workflow, especially for tasks that need collaboration and coordination with your in-house team
  • Limited collaboration – if your offshore team has minimal overlapping hours with you, direct collaboration and communication can be severely limited and much more difficult

How to solve those problems

  • Rotate meeting times – rotating meeting times will ensure your offshore team isn’t unfairly disadvantaged compared to your in-house team
  • Document everything – detailed and regularly updated documentation will keep your offshore team in the loop, regardless of their working hours
  • Encourage flexible working hours – flexible working hours can increase the overlap your offshore team has with your in-house team, which will improve communication and collaboration

Remote teams that are hard to manage

Managing a remote offshore software development team isn’t an easy task.

Geographic distance, cultural differences, and a lack of face-to-face interaction can make coordination and management difficult.

This can have severe consequences, from lower productivity all the way to high team turnover.

And it can even totally derail your project.

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One way you can mitigate this problem is by using project management tools like:

Also, you should set clear expectations from the start.

This way, you’ll have an easier time tracking your offshore team’s progress and they’ll have a better understanding of your project’s goals.

And that’s the recipe for successful collaboration.

The problems hard to manage remote teams create

  • Low productivity – remote offshore teams may feel disengaged and disconnected, which reduces their productivity and enthusiasm for your project
  • Lack of accountability – without effective management, remote teams will lack accountability which can lead to missed deadlines and poor team performance
  • High turnover – if they’re not adequately supported and managed, remote teams might have a poor work-life balance and suffer from burnout which will result in high employee turnover

How to solve those problems

  • Set clear expectations – you need to set clear expectations when it comes to your offshore team’s roles, responsibilities, and deliverables so managing them is easier
  • 1 team, 1 project model – make sure the team you hire works on a 1 team, 1 project model so they’re fully dedicated to your project
  • Have regular check-ins with your offshore team – regular check-ins with the team will allow you to monitor their progress and keep them aligned with your project’s goals

Cultural differences

Offshoring development often means working with people from different cultures.

Issues like different communication styles and potential language barriers can make effective collaboration difficult.

And it can have a huge impact on your project.

Around 60% of all outsourced projects fail because of poor cultural compatibility, so bridging the cultural gap is essential.

60% of outsourced projects fail because of bad cultural compatibility

But, if you hire the right vendor, this won’t be an issue – they’ll already have a lot of experience working with clients from different countries.

Still, it’s a good idea to adapt your communication style to your offshore team’s preferences.

For example, if they’re from a country with a less assertive communication style, you need to be mindful of that when giving and receiving feedback.

This, along with an inclusive environment, will help you easily manage cultural differences.

The problems cultural differences create

  • Reduced team cohesion – a lack of mutual understanding because of cultural barriers can make effective collaboration and building trust difficult
  • Frustration and low morale – unresolved cultural issues can lead to frustration and low morale in your offshore team, which can decrease productivity and increase turnover
  • Misunderstanding and conflicts – cultural differences can lead to misunderstandings and conflicts, which will prevent effective collaboration and teamwork

How to solve those problems

  • Adapt your communication style – when you talk to your offshore team, make sure to adjust your communication style to suit their cultural preferences
  • Create an inclusive environment – an inclusive work environment where everyone feels valued, regardless of background, will help you better manage cultural differences
  • Implement a buddy system – a buddy system, where each member of your offshore team is paired with someone from your in-house team during onboarding, will help you bridge the cultural gap

Offshore software development challenges: FAQs

Alongside offshoring, there are 2 other outsourcing models out there – onshoring and nearshoring.

The main difference between the 3 is geography:

  • Offshoring – outsourcing to a country that’s geographically far away from you
  • Nearshoring – outsourcing to a neighboring country (3 hours or less time difference)
  • Onshoring – outsourcing to a company in the same country

Whether or not either of these models is superior is based on your specific needs – there’s no universal answer to that question.

But, if you’re working on a tight budget, offshoring is usually the cheapest option.

You should choose Croatia – and not just because DECODE is based here.

Here’s why Croatia is a top choice for offshoring software development:

  • Top-notch modern infrastructure
  • A highly-skilled workforce
  • Strong government support
  • Economic stability
  • Competitive hourly rates
  • Very high English proficiency

To pick the right offshore software development company, you need to:

  • Clearly define your goals and requirements
  • Read their case studies
  • Check their reviews
  • Review their development process
  • Evaluate their tech stack
  • Review their pricing

Need an offshore development partner?

Are you looking to offshore development but are struggling to find a partner that’s the right fit?

You’re in the right place.

We can help you with anything you need, from simple updates to building your product from scratch.

If you want to learn more, check out how we work and feel free to get in touch with us – we’ll set up a quick call to discuss your needs in more detail.

Written by

Ante Baus


Ante is a true expert. Another graduate from the Faculty of Electrical Engineering and Computing, he’s been a DECODEr from the very beginning. Ante is an experienced software engineer with an admirably wide knowledge of tech. But his superpower lies in iOS development, having gained valuable experience on projects in the fintech and telco industries. Ante is a man of many hobbies, but his top three are fishing, hunting, and again, fishing. He is also the state champ in curling, and represents Croatia on the national team. Impressive, right?

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