In case you didn’t get the memo, software development outsourcing is pretty much the best thing since sliced bread. You get to work with highly qualified engineers from across the globe and create outstanding products at a fraction of the cost of hiring inhouse staff.
However, to get the most out of your extended development team and avoid common pitfalls, you want to outsource the right way. Among other things, that includes identifying the most appropriate outsourcing model for your business needs.
A financially driven reason for outsourcing is that it can turn fixed costs into variable costs. While you can delegate your software development to a service provider locally, hiring a foreign contractor is usually more cost-effective. And if you are considering venturing abroad, you have a choice to make. Should you go for offshore or nearshore outsourcing?
What Is the Difference Between Nearshoring and Offshoring?
What Is Nearshore Software Outsourcing?
Nearshore outsourcing is a software product development model where some or all of the work is delegated to remote teams based in a nearby country and in a similar time zone. This approach combines cost-effectiveness and shorter travel time with the additional benefits of cultural and geographic proximity.
What Is Offshore Software Outsourcing?
Offshore outsourcing delegates the software development process to a foreign contractor company in much the same way as nearshore outsourcing. Unlike a nearshore team, though, offshore engineers are based on another continent. Popular offshore destinations include Latin America, India, Ukraine, and China.
This model can be more cost-effective than nearshore outsourcing in terms of developer hourly rates. On the other hand, however, offshore development presents business owners and project managers with unique operational challenges. These are due to the longer travel times, considerable time difference, and the unavoidable cultural and language barriers.
3 Advantages of Nearshore Development
1. High-Quality Software That Doesn’t Cost the Earth
A nearshore software development team is significantly cheaper than inhouse engineers. Not only do you save on salaries and hourly rates, but you also don’t need to worry about renting and maintaining an office space — to say nothing of recruiting, onboarding, and training full-time developers.
What’s more, in this case, affordability does not come at the price of quality. The difference in the cost of living can be substantial even in neighboring countries, allowing you to assemble a brilliant extended development team without your business going bust.
2. Larger Talent Pool
Sometimes, the person you are looking to hire — the perfect fit for the job — happens to live on the other side of the border. Here is where nearshoring comes in. With this outsourcing model, you can take your pick from a truly international selection of quality software professionals.
Crucially, you only get to work with partners based in nearby countries that you understand. From the local digital industry and national regulatory framework to the academic and professional qualifications of job applicants, chances are you won’t have a hard time getting up to speed with things. This is not always the case with far-off countries half a world away.
3. Clear Communication
The cultural and geographic proximity of your extended development team also makes for more efficient communication.
Your messages will not get lost in translation, and you won’t have to stay up until the wee hours waiting for an urgent response from your colleague who is just waking up thousands of miles away. Most nearshore operations are based no farther than three time zones from the main office.
What’s more, the shorter travel time between your headquarters and your extended team means that you can hold frequent physical meetings and events. That improves collaboration, boosts team spirit, and fosters a real sense of belonging to the corporate culture.
2 Hidden Costs of Offshore Outsourcing
There’s No Such Thing as a Free Lunch
The hourly rate of offshore workers may be hard to beat, but it comes with drawbacks that could cost you a lot in the long term. After you factor in the exorbitant travel expenses and loss of productivity due to the large distances and time difference, the cost reduction might not be quite what you had in mind.
Poor Communication
When it comes to software development, cultural differences matter a lot more than you’d think. Language barriers and different work ethics can lead to serious miscommunication between team members. And when you throw a time difference of up to 12 hours into the mix, you might as well start sending your emails to your offshore team via pigeons.
Nearshore vs. Offshore Software Outsourcing: Which One Is Better for You?
It’s important to note that neither offshore nor nearshore development can offer a perfect solution to your outsourcing needs. Both models have their advantages and drawbacks, and which one would work best for your depends mainly on your budget and your project type.
Offshore outsourcing can be a great and cost-effective solution for smaller or one-off projects, as well as for business with a limited budget for technical staff augmentation. In contrast, nearshore outsourcing generally works better when you are looking to develop close, long-term collaboration on more complex projects.
Not Sure Where to Find a Reliable Outsourcing Partner?
Zartis Has Your Back.
In addition to software development and IT recruitment, Zartis specializes in assembling high-performing remote development teams from scratch.
Our software development centers in Spain and Poland serve clients in Denmark, Germany, Ireland, Spain, the UK, and the United States.
For further details on our nearshoring services and how we can:
- Address your unique needs
- Improve your project management
- Get your software project up and running in no time
… simply drop us a line. Our outsourcing experts will be in touch shortly.
Be sure to take action now. According to a recent survey by Whitelane Research, 74% of European tech companies reported that they planned to outsource IT services at the same rate or more in the near future. Remote work is here to stay. You want to get ahead of the competition while you still can.
Want to Learn More About Nearshoring?
Check out our related posts:
