Mythbusters: Debunking the Top 8 Misconceptions about Offshore Development

Did you know? The software development sector is witnessing transformative changes. An astounding 80% of the world’s top 500 companies have embraced offshore development, seamlessly integrating these teams into their software operations. This strategic decision not only offers cost savings and scalability but also grants access to a diverse and vast talent pool from around the globe.

offshore development myth

Yet, in the face of these advantages, some companies remain on the fence. Their reluctance is often fueled by misconceptions and myths in software engineering, many of which are based on isolated negative experiences.

In this article, we’ll clear up the most common misunderstandings and highlight the real benefits of working with offshore software development teams. Read on.

The Myths about Offshore Software Development

Here are some common misconceptions about offshore development and the facts:

Myth #1: Offshore software development doesn’t work

Many believe that offshore software development is bound to fail due to geographical and cultural barriers between the client and the offshore team. This skepticism is fueled by perceived obstacles like the lack of in-person meetings, challenges with time zones, and inexperience in managing offshore collaborations.

Fact: When approached with care and precision, software development offshore teams can be exceptionally effective. The key to a project’s success hinges on clear expectations, meticulous definitions of requirements, and strong communication pathways. Above all, collaborating with a seasoned partner can smooth out potential wrinkles and elevate the project’s outcome.

For example, at Newxel, we go beyond just technical prowess when selecting developers. We carefully vet each candidate for both their technical expertise and their cultural fit with the client’s organization, ensuring they’re genuinely committed to the project at hand.

When it comes to setting up and overseeing offshore developers, our team takes the lead. We assist with recruitment and offer comprehensive administrative support tailored to the client’s needs. Moreover, we’re well-versed in utilizing top-tier tools for managing offshore teams successfully.

Myth #2: Unqualified offshore software developers

A prevalent misconception suggests that offshoring dilutes the quality of the end product because of potentially unqualified developers. It’s easy to see where this concern comes from. With clients and developers separated by borders, the absence of in-person interactions can amplify doubts about the developers’ technical proficiency and their ability to produce top-tier software.

Fact: While such concerns have a basis, they often arise from collaborations with a less reputable third-party outsourcing partner.

In contrast, many offshore development companies often adhere to strict quality control measures, employ contemporary development methodologies, and engage highly skilled professionals to deliver exceptional software solutions. This is largely because the client is usually involved in the process right from the outset.

For example, at our firm, we conduct a thorough assessment of potential team members, examining their past projects, reviews, and skillsets. After narrowing down our list, the client takes the lead. They oversee the technical interviews and make the final decisions, ensuring that only the most competent and seasoned developers contribute to the project. This diligent approach guarantees a high-quality end product.

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Myth #3: Offshore = outsourcing

Another widespread misconception is that offshoring is equivalent to outsourcing. This confusion often stems from unclear terminology. Some clients mistakenly think that offshoring means relinquishing full control and direction of a project, much like traditional outsourcing.

Fact: Outsourcing and offshoring are not the same.

Offshore software development refers to partnering with teams or individual developers based in another country to undertake software development projects. This strategy often aims to tap into specialized expertise available overseas.

On the other hand, outsourcing encompasses a wider scope, where various business processes or tasks are delegated to third-party entities. This can occur domestically or internationally.

While offshoring does shift certain operations to another region, it doesn’t mean clients lose their grip on the project. At Newxel, our methodology empowers clients with full control. They dictate tasks, set workflows, and oversee the entire software development life cycle (SDLC). Our primary responsibility is establishing the offshore development center (ODC), offering administrative support, and assisting whenever needed.

Myth #4: Offshore development is expensive

Many small businesses and budding startups operate under the impression that offshore software development is a luxury reserved for larger companies with deep pockets. This misconception often arises from the perceived high costs associated with communication, travel, and logistics.

Fact: Contrary to popular belief, offshore outsourcing software development can actually be cost-effective. One of the main reasons for this is the difference in labor costs between countries. Offshore destinations often offer competitive rates compared to onshore development, allowing businesses to achieve significant cost savings. Moreover, offshore software development companies leverage economies of scale, resulting in reduced overhead costs for their clients. Additionally, advancements in technology have made communication and collaboration seamless, minimizing the impact of distance.

It’s well known that Eastern Europe, especially Ukraine, is a preferred destination for top-quality software development. The situation in this country, including the war, has led Ukrainian developers to handle projects at lower rates than usual in order to sustain the industry.

Finally, when you collaborate with a reputable offshore IT staffing agency like Newxel, you can rest assured that we’ll identify the most cost-effective location to hire from without compromising on product quality.

This table can help you compare the rates of average software developers in a few countries.

offshore developers salaries

Source: Arc Dev.

Myth #5: Hidden costs

Some people are concerned that using an offshore software development center comes with hidden costs beyond the initial budget, such as unexpected expenses related to software testing, marketing, infrastructural services, administration, and so on.

Fact: While some organizations may have had negative experiences with offshoring software development, these instances don’t represent the entire industry. The perception of hidden costs often emerges due to inadequate project management, miscommunication, or poor vendor selection.

At Newxel, we uphold a culture of transparency and openness. Right from the outset, we assess the client’s project requirements to understand its exact scope, allowing us to provide a clear financial outlook. This includes developer fees and the commission for our services to the client. Moreover, we offer the client the choice to eventually acquire the entire team we’ve assembled for them after a specific period of collaboration. This way, the client can cease payments to us as a service provider.

Additionally, we emphasize clear project scoping and effective project management to prevent scope creep, which stands as one of the primary culprits behind budget overruns.

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Myth #6: Software development offshore is a liability

Another widespread misconception is that opting for software development abroad could potentially become a liability. Clients are worried that they will be compelled to hire a certain number of developers, meet certain obligations, and maybe get into contracts that they cannot get out of.

Fact: While it is true that working with a remote team introduces certain challenges, these can be effectively managed with proper planning and execution. For example, the client and staffing partner should establish a robust contractual framework that clearly outlines project scope, deliverables, timelines, quality standards, size of the offshore team, and required tech stack.

Here at Newxel, we don’t impose any mandates on clients to hire more staff than they actually require or to assume any unnecessary obligations. Whether a client seeks to onboard merely 2 professionals or as many as 20, we ensure to identify and provide the best-suited experts without exceeding their specified number.

In the event that a client wishes to expand their team down the line, we’re more than capable of accommodating their needs. And should any of the hired developers not successfully complete the trial period, we offer a free replacement without any additional demands.

Myth #7: Information leak and privacy concerns

Another one of the common offshore software engineering myths is the concern regarding information leaks and privacy. Some believe that outsourcing development tasks to offshore teams may lead to a breach of sensitive data. There is also the fear that the developers hired by the vendor can migrate between projects, share information, and even steal the client’s intellectual property entirely, creating a similar product from scratch for the competition.

Fact: To begin with, offshore software development services accord high priority to data security and privacy as integral facets of their services. They ensure that all specialists enter into various types of non-disclosure agreements to safeguard sensitive information. This is a core part of the industry’s best practices.

At the same time, a reliable IT staffing agency will work with the client to implement robust offshore data security, including strict access controls, encryption protocols, and secure communication channels, to safeguard their clients’ information.

We take things a step further here at Newxel. We do not reassign developers from one project to another. Additionally, the non-disclosure agreement remains binding on all our developers. They understand the legal consequences of divulging confidential information.

Even after a project concludes or if a client decides to discontinue the services of a developer, those developers depart from Newxel, but the non-disclosure agreement remains enforceable.

We have your security at heart and will do everything to ensure that your intellectual property and product are safe.

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Myth #8: Offshore – only about developers

This article will not be complete without addressing the misconception that offshoring is solely focused on developers. This misconception fails to acknowledge the wide range of services and expertise that an offshore software development company offers.

Fact: While developers indeed play a pivotal role in this work model, offshore teams typically consist of professionals from diverse domains. These encompass project managers, business analysts, quality assurance engineers, and UI/UX designers.

Here at Newxel, we boast a successful track record in assembling self-sufficient project teams. These teams encompass not only developers but also QA specialists, DevOps engineers, designers, project managers, and other experts. Together, they collaborate to deliver comprehensive solutions meticulously tailored to meet the client’s specific requirements.

Here at Newxel, our expertise spans domains like the gaming industry, blockchain, cybersecurity, artificial intelligence and machine learning, IT governance, and many more. This means we can successfully hire top-tier specialists within these industries.

This breadth of expertise ensures that our offshore teams can effectively address complex business challenges and deliver top-notch software solutions of the highest quality.


As the offshore model becomes more popular, misconceptions and misunderstandings about them are also on the rise. It is important to dispel these myths so that businesses can harness the potential benefits of ODCs such as cost savings, access to a larger talent pool, and increased scalability. Also, adopting the offshore model as a viable strategy can empower businesses to effectively attain their software development objectives and remain competitive in an ever-evolving digital landscape.

If you’re interested in building a team of offshore software developers in countries like Ukraine, Poland, Romania, Bulgaria, Portugal, or any other country where we can assemble a qualified team within 3 – 5 weeks, we encourage you to reach out. Our experienced senior executives will promptly get in touch with you.

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What are the benefits of outsourcing my software development project to an offshore team?
Outsourcing software development to an offshore team offers several benefits. Firstly, it allows access to a larger talent pool, enabling businesses to choose from a wider range of skilled professionals. Additionally, offshore teams often have lower labor costs, resulting in potential cost savings. Time differences can also be advantageous, as offshore teams can work on projects while the local team is offline, effectively extending work hours.
Is developing software offshore more expensive than using a local team?
No. This approach can be more cost-effective compared to using a local team. While hourly rates may vary, offshore teams often have lower labor costs due to differences in wages and living standards between countries.
How can businesses tell what is true and what is a myth when it comes to offshore developers?
To differentiate between facts and myths, rely on objective data from trustworthy sources like industry reports, case studies, and client feedback. Direct communication with people who have used the method can also provide valuable insights.
What should I look for when choosing a dependable offshore partner?
When selecting an offshore project partner, evaluate their expertise in the desired technology and domain. Check their track record in similar projects, and assess communication capabilities, transparency, and responsiveness.
Who holds ownership of the source code created by the offshore team?
The source code is typically owned by the client or the owner of the project, however, there may be other terms outlined in the contractual agreement between the parties involved that cover code ownership.
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