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Nearshore vs Offshore vs Onshore: What Is The Difference?

By March 22, 2020August 26th, 2020One Comment

Offshore software development teams can be found abroad, usually on the other side of an ocean. With the help of technology, they are able to work remotely and virtually to help you build your product at a fraction of the cost of their onshore counterparts. Ukraine, India, China and Southeast Asia like Vietnam, Thailand are some of the most popular countries to find qualified developers for your project.

Many companies find that outsourcing software development offers more benefits than hiring developers in-house. When researching a place to outsource, there are basically three types of IT outsourcing to consider: nearshore, onshore or offshore? So, which is the right shore call center outsourcing for your business?

what is the difference between nearshore onshore offshore agiletechAccording to Statista, the market size of the outsourcing industry has been outstretched from $45.6 B in 2000 to $85.6 B in 2018. At the same time, the global IT outsourcing market earned $85.6 billion, which is a sure sign of steady positive growth in the industry.

Onshore, nearshore or offshore: Unsure?

There are pros and cons to all of them. And it’s essential to define which model of IT outsourcing that fits your company best. As of now, let me explain what they are:

  • Onshore means that outsourcing software development locates in the same country or region.
  • Offshore indicates that the company you hired is in another country with a different time zone.
  • Nearshore refers to your outsourcing partner in a neighboring country which is a short distance away.

The beauty of software development is that. There is no need for an in-house team unless you want to. Instead, you can look both near and far outsourcing countries for your ideal dedicated team.

Outsourcing software development happens at any time in any place! Whether you are looking for nearshore, offshore, onshore, first you need to weigh advantages of each.

type of outsourcing model onshore offshore nearshore agiletechThis is why we write this article – to embrace all the difference between offshore, nearshore and onshore software development.

Through the post, AgileTech hopes to provide a big picture scene for you to easily choose your right model of IT outsourcing. And, also give you some insights that will help you find the right software development company!

Onshore Software Development

Onshore is often known as local outsourcing. In this kind of software development service, a company has the opportunity to focus on its core capabilities. While values are ensured, the required work is still completed in a connected way.

There’s nothing wrong with wanting a dedicated team speaking the same language. Onshore outsourcing has some benefits:

  • No concerns about language barriers or cultural difference
  • Timezones should be the same, if not, closely aligned
  • Easier to communicate, have a meeting or conduct training
  • An onshore development team is potentially accessible

However, if you choose outsourcing to reduce the development budget, hiring onshore company maybe is not a good choice. In some case, it would probably cost a lot more than offshoring or nearshoring to do the same work.

Nearshore Outsourcing

Nearshore software development team gaps the space between onshore and offshore. Nearshoring is where the team would be located close to yours, perhaps border your country. In circumstances, nearshore outsourcing should be the perfect balance between the benefits of offshore and onshore.

If you choose a nearshore company, the available pool of talent is expanded and labor costs can be significantly reduced. In addition, there are more advantages to nearshore:

  • Time zone differences are reduced
  • Less expensive labor than onshore
  • Some cultural differences but not of significance
  • Being more able to visit, resulting in a more effective working relationship

Offshore Development Center: What you need to know?

Offshore software development is located in another country, including the other side of the globe. An offshore development centre can yield a successful business where quality technology is at a far lower cost. From offshoring, both partners benefit. But it could be positive and negative.

Advantages of Offshore Software Development

Some potential benefits of an offshore software development team:

  • The project accesses a global pool of talent
  • Hiring a highly expert team at lower costs
  • Dedicated IT team can handle your technology to a wider range of service
  • If you find the right offshore company, you assure to work with experienced software developers that are capable to deliver strict deadlines

Disadvantages of Offshore Software Development

Opposite, there are some risks if you outsource. While planning to hire a dedicated team, you need to take care of:

  • Significant time-zone difference which may become a bottleneck
  • Sometimes losing control over your critical activity
  • The working culture in an offshore country can be different
  • May be not easy to visit an offshore production team

Attitudes toward hierarchy, scheduling, responsibility are just some of the areas where offshoring can be disparate as well. Nevertheless, all these disadvantages can be reduced by avoiding some common contract loopholes in software outsourcing.

The Rise of Dedicated Team Outsourcing

By offshoring software development, the business owner has more time to focus on generating income and business growth. This concept of outsourcing model is especially ideal for the company in which IT is not the core business. Instead of spending time on software development, you can free up your resources and put the effort into the right place.

dedicated team model software development agiletech

Dedicated Team Model for Outsourced Projects by Clutch

The dedicated team model provides a combination of high-skilled employees and low-cost software development. It is quite beneficial for the long-term project requiring a continuous workload.

Like everything else, this model has its pros and cons. And you should consider both before making a decision. Thus, dedicated team outsourcing is suitable for long-term projects with a constant workload.

Who may need to hire a remote software developer? Actually, there are no limitations. A dedicated software development team can be the companion for both startups and large companies.

For example, a startup can speed up its project process while hiring an outsourcing partner. Additionally, they will cut costs on labor and infrastructure. Besides, a market-leading company can be able to focus on more important tasks without the need to form an entire department.

In other words, if you’re interested in building a successful offshore dedicated center or outsourcing project, you should take a look at our articles here:

So, Which Is The Best For You?

Which sore is right for your business? Onshore vs Nearshore vs Offshore? Does the distance matter? In the end, outsourcing software development will be profitable for many startups and companies worldwide. Location is an important factor.

But don’t let it take over the value your ideas deserve. Nearshore, onshore or offshore – no solution is superior to others.

Nearshore software development offers closer time zones and culture to your local area. It also makes communication and time management easier while fast-tracking your project to success. While onshore is a great option for businesses that don’t want to have their own offices.

Last but not least, offshore developers of the dedicated team deliver you quality software products at an affordable price. To make it work, you should be in touch with your dedicated team and stay on the same page at the end.

In our experience, there are advantages and disadvantages to 3 types of software development services. It all depends on what a company wants and what to achieve.

Don’t forget to communicate with your team! Weekly demo, daily reports, along with an adequate level of English are important things for successful outsourcing.

About AgileTech

By providing multiple needs and services, AgileTech is here to ensure your technology project as a successful element of your omni-channel strategy.

We have expert Project Managers along with excellent teams who have delivered the best products to customers in more than 10 countries, namely the U.S, U.K, Germany, France, and Singapore.

As a leading mobile development company in Vietnam, we have huge experiences in many fields including e-commerce, car-sharing platform, health care, Livestream and many more.

Our dedicated software development team is ready for your custom requirements. You can contact us at contact@agiletech.vn or via (+84) 936 281 059 for more information.

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