Over the last few years the web and mobile development market has become saturated with offshore freelancers, digital companies, ‘do it yourself” websites and online templates, at ridiculously low prices.

Don’t get me wrong, we love competition, it drives us to excel further with our services and products. But due to the recession, many clients have been pushed to make their digital choice based on tighter budgets. Rates have become, more than ever, the number one reason to win, or not win, a project.

There is a common perception that through outsourcing your development project to the above type of supplier, that you’ll save money based on labor arbitrage. However, the fact is, there is no such thing as “labor arbitrage” in this business and the amount of risk is 50% higher than hiring a well-known but more expensive agency locally.

How do you compete against offshore companies?

At Digital Evolution Lab we’ve spent the last 12 months analysing the competition from both ends of the spectrum to understand what you do and don’t get offshore developers compared to the UK.

This table displays the “average” cost per day and per developer for each country/area.
Yes, many overseas companies/freelancers charge as little as £10 per hour.
Have you ever asked yourself the following questions?

  1. Who is going to be in charge of your development project?
  2. How truly skilful are these developers?
  3. Do you get senior or junior developers?
  4. How easy is it to communicate and exchange information?
  5. How much of your time do you need to invest to get offshore teams up to speed?
  6. How often do you need to monitor their work to avoid wasting weeks of development?

Here a quick list of PROS and CONS we have identified in the market:

  • No issue in communication
  • Great infrastructure
  • Great man power and skills set
  • No Time zone difference
  • Higher costs p/developer
  • Acceptable English level in some countries
  • Time Zone difference: 5/9 hours
  • Poor infrastructure
  • Lack of skills
  • High costs per developer
  • No issue in communication
  • Great infrastructure
  • Great man power and skills set
  • Time Zone difference: 5/9 hours
  • Exchange Rate p/hour could rise dramatically and be very costly for UK clients
  • Time Zone difference: 2/5 hours
  • Good infrastructure
  • Great man power and skills set
  • Language barrier slows down dev process
  • Lack in development process
  • Low cost
  • Large man power with different skills
  • Time Zone difference: 10/12 hours
  • Language barrier slows down dev process
  • Poor infrastructure
  • Low cost
  • Good infrastructure
  • Time Zone difference: 10/12 hours
  • Language barrier  – English level really poor
  • Lack of experience
  • Lack of skills
  • Acceptable English level
  • Extremely Low cost
  • Time Zone difference: 10/12 hours
  • Lack of experience
  • Poor infrastructure
What are the common CONS from this list?

  • Distance (Time Zone)
  • English Language
  • Infrastructure

A recent study cites that more than 70% of customers complain that offshore costs are higher than what was initially estimated and that 8 out of 10 developers don’t deliver what was promised.

Many of our clients have come back from their offshore experience complaining about quality, professionalism and most of all, reliability. We’ve heard toe-curling tales of severe impact on projects.

In the development business we say: “If you think it’s expensive to hire a professional, wait until you hire an amateur”.

That is not to say that similar things can’t happen with the company next door. But by looking offshore, the risk/reward ratio is not in your favour.
So this begs the question, how do we keep our prices down without affecting quality, or, under-selling our services?
Thanks to extensive market research at Digital Evolution Lab we’ve been able to shape high quality services and products within what we consider an extremely competitive rate for the UK market.

Our clients have responded well to the new structure – if you want to learn more, get in touch …

We’d also love to hear your experience in this area. Let us know your best / worse development experience and how you solved it.