Offshore vs onshore QA testing: How to choose the best option for your business

The choice between onshore and offshore software testing strategies depends on many things: your goals, resources, and even the company’s culture. So this choice should be navigated by a comprehensive guide.

In early 2023, Indeed conducted a survey and found that 83% of hiring managers in tech companies admit the talent shortage. Therefore, it’s nothing groundbreaking that the outsourcing market will thrive like never before, with an average of 8.8% growth year over year.

And this is where the offshore-onshore dilemma comes into play. Some may say that onshore is more reliable. And they might be right. To an extent. Because in the US, it’s very challenging to find an appropriate specialist with not-so-soaring compensation expectations. That’s why offshore seems like a very interesting and profitable solution in this case.

Among the offshore destinations, Ukraine has emerged as a frontrunner in the QA testing arena. With a strong pool of IT talent, a vibrant technology ecosystem, and competitive pricing, Ukraine offers an attractive proposition for businesses seeking high-quality offshore QA teams at a fraction of the cost of onshore alternatives.

Despite the ongoing war in Ukraine, the country's IT sector has demonstrated remarkable resilience. According to a report by TechUkraine, the country's IT exports grew by 16% in 2022, reaching a record high of USD 3.74 billion. This resilience bears witness to the adaptability and resourcefulness of the Ukrainian IT workforce, which has found innovative ways to continue operating despite the challenges.

A comparison point for QA: Offshore vs onshore QA testing

Quality assurance (QA) in software development is the gatekeeper, ensuring a product's reliability and functionality. The importance of QA is starkly illustrated by a notable case — Samsung reportedly “lost” customers’ data due to software vulnerabilities. The most interesting thing is that this breach lasted for a year.

And you can only guess how it tarnished the brand's reputation and eroded user trust. This real-life scenario underscores the critical role QA plays in mitigating risks and ensuring a seamless user experience.

Onshore & offshore choice

The choice between onshore and offshore software testing services is pivotal. Onshore QA, where testing is conducted within the same geographical location as the development team, offers advantages such as proximity, real-time communication, and cultural alignment. However, these perks come at a cost, often higher due to local labor rates.

Contrastingly, offshore QA, outsourcing testing to a different geographic region, introduces cost efficiency as a prominent advantage. Countries like Ukraine have emerged as attractive offshore QA destinations, delivering high-quality testing services at a fraction of the cost. Despite geopolitical challenges, Ukraine's tech talent remains robust, providing a compelling proposition for businesses seeking cost-effective QA solutions.

The decision between onshore and offshore software QA testing hinges on various factors. Project complexity, budget constraints, and the need for continuous communication all play roles in shaping the optimal choice. While onshore testing ensures immediate access to the QA team and fosters real-time collaboration, offshore testing offers cost savings without sacrificing quality.

What is onshore outsourcing in software testing?

Onshore software testing is the practice of delegating testing activities to a service provider within the same geographical location as the hiring company. In the context of the United States or the United Kingdom, onshore testing involves collaborating with testing teams or service providers situated within the domestic borders of these countries.

Examples of onshore software testing

Hiring a dedicated onshore QA team: Simply put, you can hire a dedicated onshore QA team to work in-house or at a nearby location. This approach allows you direct control over the testing process and facilitates seamless communication with the development team.

Engaging an onshore QA consulting firm: Companies like yours can collaborate with onshore QA consulting firms to gain access to specialized expertise in niche areas of testing, such as performance testing, security testing, and mobile testing. Especially useful when you need high-skilled specialists with in-depth expertise in a particular testing area.

Partnering with onshore QA managed service providers: This is a partnership with onshore QA managed service providers to outsource their entire testing process, including test planning, test execution, and defect management. It's like buying a franchise: you buy not only the product or service but also the processes that are immediately set up.

Why you may want to choose onshore outsourcing

Companies in the US and UK often pick other companies’ brains due to the high costs of onshore cooperation. But there are some reasons why US/UK companies still may onshore their testing.

Real-time collaboration: Onshore outsourcing facilitates immediate access to the testing team, promoting real-time collaboration. This is particularly advantageous for projects requiring constant communication and quick turnaround times.

Cultural compatibility: Shared cultural nuances between the hiring company and the onshore testing team contribute to seamless integration. A common cultural background often leads to better communication, understanding, and teamwork.

Regulatory compliance: For industries with stringent regulatory requirements, onshore outsourcing ensures that testing practices align with local regulations. This is crucial in sectors such as finance, healthcare, and government.

Intellectual property protection: Onshore outsourcing provides an added layer of confidence in intellectual property protection. Companies may find assurance in the legal frameworks and intellectual property laws of their home country.

Quality control: Closer proximity enables stringent quality control measures. Companies can exercise direct oversight, ensuring that testing practices adhere to the highest standards.

While onshore outsourcing may come with a higher price tag (but sometimes it’s even cheaper), the benefits in terms of communication, cultural alignment, and regulatory compliance can often outweigh the cost considerations.

Hidden considerations for onshore outsourcing

Cost considerations: There is no strict opinion about price. Onshore can be more expensive, and offshore outsourcing can also be more expensive. It depends, though. But anyway, the overall cost savings (when onshore) may be offset by factors such as reduced travel expenses, improved communication efficiency, and reduced risk of delays.

Talent availability: The availability of skilled QA professionals can vary depending on the location. Companies may need to invest in training and development to ensure their onshore QA team has the necessary expertise.

Cultural differences: Despite sharing the same country, there may be subtle cultural differences between the client company and the onshore QA provider. Companies should be mindful of these differences and foster a culture of mutual respect and understanding. There was a case when people from different countries had absolutely diametric understanding of the same process.

Integration with existing processes: Integrating the onshore QA team into the company's existing development and testing processes may require additional effort and coordination. Companies should establish clear communication channels and define roles and responsibilities to ensure seamless integration.

Cons of onshore outsourcing

While onshore outsourcing presents numerous advantages, it is not immune to drawbacks. Understanding these challenges is crucial for CEOs and CTOs when making informed decisions about their testing strategies.

5 most common cons of onshore test outsourcing

Higher costs: Onshore outsourcing, often synonymous with higher labor costs, can strain budgetary considerations. This financial burden may pose challenges for companies looking to optimize testing expenses.

Limited scalability: Onshore testing teams, bound by local talent availability, might face limitations in scalability. Rapidly expanding projects may find it challenging to secure the necessary testing resources promptly.

Talent shortages: 64% of IT C-suite states that it’s challenging to find appropriate tech talent in the US right now. Certain niche skills or expertise may be scarce within a specific geographical location. Companies requiring specialized testing knowledge might encounter difficulties in finding suitable talent domestically.

Time zone constraints: While onshore outsourcing minimizes time zone differences, it doesn't eliminate them entirely. Companies operating across diverse time zones may still face challenges in maintaining seamless communication and workflow. That’s why a separate kind of outsourcing, nearshore, appeared.

Competition for talent: In regions with vibrant tech ecosystems, there's fierce competition for skilled testing professionals. This competition can result in increased recruitment efforts and potential delays in assembling the desired testing team.

Less apparent cons

Limited diversity in skill sets: The employment portal SCIKEY Market Network conducted research and found that about 70% of US managers believe there is a skill gap between their talents’ skills and the skills they truly need. Onshore outsourcing might inadvertently limit exposure to a diverse range of testing methodologies and practices. This lack of diversity can hinder innovation and stifle the introduction of cutting-edge testing techniques. And it’s not a word about Poles, Ukrainian, or Indian specialists that are gaining ground at the moment. It’s about looking out for real go-getters worldwide.

Dependency on local economic stability: Onshore outsourcing ties the testing strategy to the economic stability of the home country. Adverse economic conditions, such as recessions or downturns, can affect the availability and affordability of testing resources. For this reason, the already mentioned Ukrainian tech industry encountered an export decrease — the war in the country had an effect, obviously.

Potential for knowledge silos: In onshore outsourcing, there's a risk of developing knowledge silos within the local tech community. This insular knowledge-sharing environment may hinder the influx of fresh perspectives and best practices from the global testing community. Something similar to the first point under this subtitle, but still.

Overemphasis on communication: While proximity aids communication, it can also lead to an overemphasis on frequent, sometimes unnecessary, interactions. This emphasis may divert focus from the actual testing work, impacting productivity.

As CEOs and CTOs navigate the landscape of onshore outsourcing, recognizing both the common and nuanced cons is paramount. A holistic understanding empowers decision-makers to mitigate challenges effectively, ensuring a strategic and well-informed approach to software testing.

What is software development offshore?

This approach has gained significant traction in recent years due to its potential to reduce costs, access a global pool of talent, and leverage specialized expertise.

In offshore software development, the client company provides the service provider with project specifications, requirements, and deliverables. The service provider then manages the entire development process, from designing and coding the software to testing and deploying the final product. Simply put, the contractor elaborates on the requirements from the customer, makes up a solution architecture (or just a plan for future development), and develops the solution itself — in other words, ensures a ready-to-use tech solution, lock, stock, and barrel.

Offshore outsourcing can be a strategic decision for companies seeking to:

Outsource to countries besides the US: It is worth it

When it comes to outsourcing software development or testing to countries beyond the US, particularly in regions like Ukraine, several compelling leg-ups emerge since offshore QA expertise proved its effectiveness.

Cost efficiency: Outsourcing to countries with a lower cost of living, like Ukraine or Poland, allows companies to access top-tier talent at a fraction of the cost compared to onshore options. This applies to annual leave, retainer costs, and the most obvious — recruitment costs. Such an efficiency extends across various aspects, from development to quality assurance.

Global talent pool: Offshore outsourcing broadens the talent pool, enabling access to a diverse range of skills and expertise. Ukraine, specifically, boasts a thriving IT community with a rich reservoir of experienced professionals proficient in the latest technologies. By the way, many Ukrainian IT companies have set up offices in Poland and neighboring countries so that they can minimize the impact of war and energy risks.

Time zone advantage: Leveraging time zone differences strategically can result in a continuous workflow. In simple terms, while the US sleeps, teams in countries like Ukraine continue progress, leading to accelerated project timelines and faster time-to-market. That’s why outsourcing to several companies in different time zones is gaining ground.

Scalability: Offshore outsourcing provides scalability options by allowing companies to quickly scale up or down based on project requirements. This flexibility is particularly beneficial for dynamic projects with evolving needs. Need to finish the project faster? Not a problem. Need a special skill set? This is quite possible — you bet.

Cultural alignment: Many offshore companies, including Ukraine, prioritize building strong relationships and establishing a collaborative culture. This cultural fit facilitates smooth communication, improving the overall project experience. By the way, according to the English Proficiency Index, Ukrainians have a not-bad level of English communication skills.

Cons of offshore outsourcing

As you already understand, offshore outsourcing offers substantial advantages. But we don’t want to hide the elephant in the room, so we admit — offshore outsourcing comes with its set of challenges.

Communication hurdles: Not every company is ready to provide a dedicated team that will work US/UK hours. Time zone differences can result in overlapping work hours but may also introduce communication challenges. However, implementing robust communication channels, regular updates, and leveraging project management tools can alleviate this concern.

Potential quality concerns: Maintaining consistent quality can be a challenge when working with teams in different geographical locations.

Data security risks: Offshore outsourcing involves sharing sensitive project data across borders, raising concerns about data security. For this reason, you definitely need robust security protocols, including encryption and secure communication channels.

Cultural and language differences: Diverse cultural and linguistic backgrounds can lead to misunderstandings and misinterpretations. Well, outsourcing to Germany or even the Netherlands is not so sweet since the costs are much higher and may not be worth their high-profile English proficiency.

Dependency on service providers: Relying heavily on external service providers may lead to dependency issues. Maintaining a balance between in-house capabilities and outsourced functions is essential for retaining control and strategic decision-making.

Strategies to mitigate offshore outsourcing challenges

Establish clear communication protocols: Define clear communication protocols, including preferred communication channels (Slack, Signal, custom messenger, etc.), meeting schedules, and documentation practices.

Invest in training and development: Provide training and development opportunities for both onshore and offshore teams to ensure alignment on project goals, methodologies, and quality standards. Yeah, this way, you increase costs, but at the end of the day, you may have a profit since the long-run effects will compensate these expenses.

Implement effective project management: Employ robust project management tools and processes to track progress, manage risks, and maintain visibility into the development process.

Conduct due diligence: Thoroughly vet offshore partners, assessing their technical capabilities, project management practices, and security measures.

Establish legal contracts: Clearly define the scope of work, deliverables, intellectual property rights, and dispute resolution mechanisms in legal contracts.

Comparative analysis: Onshore vs. offshore outsourcing

Illustrative comparison

Choosing between onshore and offshore outsourcing involves weighing various factors. For instance, consider the cost implications. Onshore outsourcing often entails higher labor costs, while offshore outsourcing, especially in countries like Ukraine, offers cost-effective solutions without compromising quality. It may seem strange and unlikely that large multinational companies offshore software testing to small regions like Poland or Ukraine. But think about it, that's why they are big companies with huge revenues, they know how to allocate resources properly.

DeviQA earned the privilege to work with one of such big companies — Abbott Laboratories, a multinational and global healthcare and research company.

The project details:

One of the most in-demand medical device functions is glucose monitoring. The FreeStyle Libre system by Abbott is one of the most prominent solutions in the healthcare market. The main system’s advantage that sets it out in the crowd is the LibreView platform, which is a secure cloud-based system for managing diabetes. LibreView offers clear-cut reports from compatible FreeStyle glucose monitoring devices. This way, it’s much easier for healthcare professionals to take care of patients and for patients to be aware of their health.

DeviQA’s contribution:

DeviQA’s most valuable contribution, in general, is skyrocketing LibreView release time without harming quality. 19 QA engineers teamed up and reduced smoke testing time from 7 days to 1 day and decreased the time needed for individual country testing by over 85%.

One of the solutions was the automation of the regression testing. They automated 1700 tests supporting multiple web browsers. Their keyword-driven methodology emphasizes performance and flexibility, allowing team members to easily understand and customize tests.

DeviQA team not only completed the task in an impressively short time period but also freed Abbott's manual QA team, allowing them to focus on new features and improved test coverage. All these actions yielded higher user satisfaction.

This example could seem like showing off. But let’s face it, no one on the entire internet won’t set out their tools for the plot. And if we can help a solid company to become even more successful, why can’t we lead them through all the considerations then? If you agree, let’s proceed.

Choosing between onshore and offshore

When deciding between onshore and offshore software development and testing services, businesses should consider their unique needs and priorities. Onshore outsourcing may be preferable for projects demanding immediate and direct communication, while offshore outsourcing, with its cost-effective solutions and access to a global talent pool, may be suitable for projects with scalability and cost-efficiency requirements.

Ukraine, renowned for its vibrant IT community, offers a compelling offshore outsourcing option. With a rich pool of skilled professionals, cost-effective solutions, and a cultural affinity for collaboration, Ukraine stands out as a strategic choice for businesses seeking global talent without compromising on quality.

To sum it up

While onshore QA testing outsourcing offers direct control, cultural familiarity, and easier communication, offshore QA facility provides cost savings, access to a global talent pool, and the potential for rapid scalability.

Offshore testing outsourcing has gained significant traction in recent years, with countries like Ukraine and Poland emerging as leading destinations due to their high-profile QA mastery, competitive pricing, and strong cultural alignment with Western business practices.

According to a study by ISQ, software defects cost the U.S. economy an estimated USD 2.41 trillion annually in productivity losses, rework, and lost business opportunities. By rigorously testing software throughout the development lifecycle, companies can identify and rectify defects early on, preventing costly delays, reputational damage, and customer dissatisfaction.

Offshore testing outsourcing, when implemented strategically, can empower businesses to optimize their testing processes, reduce costs, and enhance software quality, ensuring the delivery of reliable and bug-free products that meet the highest standards of performance and usability.