Nearshore vs Offshore: Which One is Best for Software Development Beyond 2020?

Introduction to Nearshore vs Offshore Software Development?

Outsourcing is a business model that involves the hiring of a company by another company for jobs that its in-house resources either don’t have the time for or aren’t competent enough to do. Outsourcing especially works wonders for businesses that have limited resources to work with.

However, it can also prove quite useful for established businesses that just want their work done by experts without spending too much money.

In essence, outsourcing is a task delegation at scale. There are primarily three different types of outsourcing, namely onshore outsourcing, offshore outsourcing, and nearshore outsourcing. However, we will only focus on nearshore and offshore outsourcing in this post.

For businesses to do well in this competitive world, they should always be willing to innovate. Making the right decisions is a part of the process. So if you want software made, you need to first put together a list of things that you would want the software to do.

Also, decide the objectives clearly so that you don’t miss out on anything while communicating it to your potential outsourcing partner. Only after you have put the pros and cons of nearshore software development and offshore software development against each and have found a clear winner should you go ahead with your search for the right company.

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To begin with, let us tell you that whether you hire nearshore or offshore software development company, you will be handing over the task to an external entity. How much you want your in-house resources to get involved in this is also a call that you will take.

So offshore outsourcing involves hiring a company that is located miles apart from you – more than 4 time zones to be precise. On the other hand, nearshore outsourcing involves working with a company that is located in one of your neighbouring countries.

Why should look for an outsourcing partner in the first place?

Why do we have these different outsourcing models to choose from? We all know that most software development projects stop before they even begin because of the limited spending power of companies. The cost of software development varies from one location to another.

The US and Canada top the list. European countries come next. Developing countries like India and the Philippines are way down this list. In some cases, companies in these developing countries are ready to work for half or even lower price of what companies in the developed countries would charge.

Here’s how it happens. Suppose you are a company in the UK that is looking for a software development company to build you a product but you don’t have too much money for this project.

You can either negotiate the price with one of the local companies or outsource the project to a company based in India or the Philippines. Another option is to look for software development companies in your neighbouring countries.

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So as you can see, there are several options in front of you. With outsourcing, you have access to global talent. You can find people who you think are right for your project from your own country, your neighbouring country, or a country in a far-off continent. Let us now discuss a few factors that can impact your decision.

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Important factors to consider when choosing an outsourcing type

  • Every company that is looking to outsource its software development project would look for skilled labour. Why would you invest so much money on something that doesn’t help you achieve your business goals? You may not always find such talent in your country or one of the neighbouring ones as well. This is where offshore outsourcing comes into play. Offshoring gives you the opportunity to choose from a global pool of talent.
  • The software development process is iterative in nature. This makes communication an integral part of that process. And we are not living in an era where we have to physically meet with people to discuss things. Technology has brought the world closer. We can now discuss anything related to the project with people sitting miles away from us. So if you are not satisfied with the services offered by your local companies, you can choose either a nearshore development company or offshore development company without worrying about communication lapses.
  • Cost is the biggest deciding factor. If the local software development rates are beyond your budget, you look at outsourcing as an alternative. In most cases, there won’t be much difference in the cost of development in your country and your neighbouring ones. So choosing a nearshore development company is out of the question. The best thing to do here is to hire an offshore development company. The cost of software development in developing countries is much lower than what it is developed countries.
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Outsourcing is a very good way of getting high-quality software built by expert developers. Choosing the right type would require you to dive deeper into what benefits each type offers.

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