How Onshoring IT Speeds Up Time to Market

March 01, 2018
In the book Competing Against Time, authors George Stalk, Jr., and Thomas M. Hout argue that the speed of bringing a product to market is one of your company’s largest competitive advantages. “In the electronics industry, introducing a product nine to 12 months late can cost it 50 percent of its potential revenues,” they claim, based on data from major electronics brands. 

Long development times can also expose your company to risks of changing market demands and consumer preferences—in some cases, making your new product obsolete the moment it has launched.

Unfortunately, many development teams are still behind the curve when it comes to timely launches. A study from the Standish Group found that as of 2012, 74 percent of studied digital projects faced time overruns.

Why are so many development teams struggling to meet deadlines, and how can you ensure that your team can meet your target timeframes?

Waterfall v. Agile

One key culprit is whether the development team uses the Waterfall or the Agile project management framework.

If the company specializes in Waterfall, this means that the entire project is scoped out in detail from start to finish, with each stage outlined in great detail. This allows for teams to work largely independently—a perfect option for remote teams based overseas, who won’t be collaborating closely with your company. 

The downside is that when the product is completed, there can be snags along the way that impact the build quality. That means potential for significant rework—which leads to the project going over time and over budget.

When a development team uses the Agile method, however, they work in a heavily iterative process that involves a series of timed (generally two-week) “sprints,” during which a specific set of product features will be built. After each sprint is completed, the dev team will regroup with the product team to evaluate progress and decide on next steps. If a certain feature isn’t working as intended or is likely to take a significant amount of additional time, it can be dropped from the list, rather than lead to launch delays. The product and development teams have a transparent process that enables them to problem-solve together, and maintain a clear view of any bumps in the road ahead. When the initial feature list is complete, the product will be ready to launch—with no surprises that your company wasn’t already aware of.

Where overseas teams can fall short

While some overseas dev teams use an Agile framework, many are still based around a more rigid Waterfall process that can easily allow for communication errors that lead to a subpar final product. Because such dev teams typically work in opposite time zones and members of the technical team may have limited English language skills, it can be difficult to coordinate regular audio and video meetings to address and resolve issues as they arise.

In contrast, most U.S.-based development teams are well-versed in the Agile process, and have the structure in place to work collaboratively. While they may operate in a smaller city to conserve budget related to office and salary expenses, they are likely to be in the same or a similar time zone to your in-house team, making it simple to set up real-time meetings on a regular basis to review and discuss questions and next steps.

Research backs up the difference in quality: A 2016 Forrester survey found that two-thirds of respondents said that the quality of work is higher using onshore or nearshore firms, compared to offshore firms. 

The financial and competitive impact of offshore development

In fact, of the Forrester respondents, two-thirds of those who’d previously used offshore providers said that they were planning to shift the work back to onshore and nearshore providers. 

One of the prime factors? Late projects, which 40 percent of these respondents cited as a reason for the shift. Poor quality (31 percent), poor communication (36 percent), and difficulty managing across time zones (29 percent) were also leading concerns.

Project delays can have a major negative financial impact. Of the survey respondents, 38 percent said delays led to lost revenue and profits; 28 percent cited higher total cost of ownership; and 21 percent mentioned lower average purchase volume.

Additionally, being too slow to launch a product means losing a competitive advantage: 25 percent of respondents lost market share, and 23 percent lost customers to competitors as a result of the delays.

Onshoring for faster time-to-market and overall process improvement

If you’re considering the pros and cons of offshoring a digital transformation product, look beyond the quoted price. While you may see a lower number on the surface, it’s important to measure the potential impact of a project that goes beyond its quoted time frame—resulting in a difficult process that involves more of your team’s resources than anticipated, additional budget for rework, and ultimately, a loss of competitive advantage.

Today’s leading companies need to be fast, nimble, and able to quickly bring new products to market to remain on the cutting edge in their industry. In order to do this well, it’s essential to choose the right partner—and more often than not, that means staying close to home with an onshore development team.

Learn more about how to tap into the talents of agile software engineering teams in the American Heartland in our free ebook, Accelerated Innovation.  
 agile, dev, development, onshoring, velocity