Nearshoring vs Offshoring vs Onshoring: What's the Best Option for IT?
So you’re planning a new project and need a team to turn your idea into a competitive digital product. Unfortunately, your in-house developers are too busy with current tasks, or perhaps their expertise is not sufficient to create what you want.
What’s your solution? You guessed it right—it is outsourcing.
Outsourcing is one of the quickest ways to find experienced specialists and bridge the talent gap. Many digital companies prefer this option over building in-house teams, as it is way cheaper and eliminates recruiting challenges. No wonder the global market of outsourced services has reached the 92.5 billion dollar mark and continues to grow.
There are three models you can opt for when outsourcing: offshoring, nearshoring, and onshoring. If you’ve never outsourced a project before, you must be wondering which model to choose and why. That’s exactly what this article is going to help you with.
In the following paragraphs, AnyforSoft compares nearshoring vs offshoring and onshoring, describes their differences, and reveals the pros and cons of each option so that you can make the right decision.
Enjoy!
What is offshoring?
Offshoring is an outsourcing model in which you hire a third-party company from a distant country, commonly one that is located on another continent. For example, if you’re in the US, hiring a development team from Ukraine would be offshoring.
Offshoring is quite popular among IT companies as it enables them to dramatically reduce expenses by outsourcing projects to places where labor is much cheaper. Besides cost efficiency, this model offers a large talent pool: you can choose any country that has talented specialists with the industry-specific expertise required for your project. By the way, you can find out the most popular outsourcing destinations in the IT industry by checking out this article.
As for the downsides, offshoring implies working in different time zones: your team will likely be working while you’re asleep, and vice versa, which will hinder communication. In addition to that, business meetings will become an issue—to meet your teammates in person, you will have to pay through the nose for flying tickets. Last but not least, let’s not forget about language barriers and cultural differences, which may also negatively affect business processes.
Pros and cons of offshoring
Pros:
The cheapest option of the three. Good for companies with low budgets.
Unlimited talent pool. Instead of sticking to neighboring countries, you are free to choose any place with the best quality-price ratio.
Cons:
Different time zones hinder communication.
Business meetings become an issue due to high travel costs.
Language barriers and cultural differences may negatively affect software development processes.
