About Onshore, Offshore, and Nearshore Software Outsourcing


Having spent over two decades partnering with and delivering Business Process Outsourcing solutions to Fortune 500 clients, John possesses an in-depth understanding of this intricate process. His comprehensive approach incorporates an exhaustive assessment of outsourcing requirements, precise vendor sourcing, and a robust program management strategy. Success in outsourcing isn’t a matter of chance, but rather the result of a meticulously defined process, a formula that Fortune 500 companies have diligently honed over time. This rigor is a significant factor in the rarity of failures within these industry titans’ outsourced programs.

Thanks to being located in similar time zones, it’s easier to maintain communication between the internal and external teams. The most significant advantage of offshore outsourcing is cost savings. The biggest advantage of offshore outsourcing is that it reduces costs and increases operational efficiency. The second-biggest advantage is that you can access a much larger talent pool than you could find locally.

Offshore, Nearshore, Onshore. What’s the difference?

These factors probably all contribute to a great command of English among Poles. We should also remember about some famous Polish minds in the tech world, who are working for the leading US companies. For example; Nathan Blecharczyk, the Chief Security Officer for AirBnB; Leonard Bosack, the co-founder of Cisco; or Piotr Szulczewski, the co-founder and CEO of the Wish platform. Agree who will be a contact person on your and the external company’s side. Both sides need to confirm acceptance procedures, paths and working methods. Then you can always refer to the agreed arrangements at later stages of the project in case one side doesn’t stick to them.

Although essential for growth and development, these tasks may also incur added costs and take the time for higher-value, core business activities. You have probably come across the terms offshore, nearshore, and onshore outsourcing. Same timezone and similar culture and mindset is probably the biggest advantage of nearshore outsourcing. Spanish is a common second language in the United States, just as English is a common second language in Latin America.

Talent availability

✔ You might be losing 1% to 2.5% of revenue in the time it takes you to hire an in-house worker. ✔ The total cost of hiring a new employee in-house can cost from $4,000 up to $8,000, according to official sources. To learn more about nearshore, read our blog What is a Nearshore Company? Outsourcing, like any other business decision, comes with its bag of benefits and drawbacks. In this section, let’s highlight the parameters on which the derived benefits greatly offset its perceived drawbacks. How to choose a contact center that is fully efficient and aligns with their goals.

  • To carry out research you can use a report prepared by EF, in which you can find the countries with the best English language skills.
  • The development of IT outsourcing is a result of a growing demand for IT services and a talent shortage.
  • This is only one example of the ways that benign differences that both parties hold in good faith can become challenging.
  • Understanding the difference between onshore, nearshore, and offshore outsourcing is the first step in determining the best course of action for a corporation.
  • As companies within the same border, a contractor’s employees across departments, such as sales, marketing, or customer service, are fluent in the native language.

The direct labor costs of offshore locations can be much less thanonshore locations. Other aspects,such as travel costs, can be efficiently managed by the companies to improve the bottom line. However, some companies may consider near shore options due to other benefits, such as similar culture and easier travel to near shore locations.

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Our catalog contains everything you need to build and scale a high-performing agile development team. Thus, the foreign collaborators are working on their client’s site up to 20-25% of their project time. After all, it only takes you a couple of hours to travel from Bratislava to Vienna, whereas Wroclaw is just 3 hours away from Berlin.

Offshore, Nearshore and Onshore

Onshore outsourcing is when you hire services to assist your company from within the same country. Offshore outsourcing involves sending IT-related work to a company in a foreign country, offering cost savings. It involves hiring an external service provider, located in the same country as the company, to provide IT-related work, remotely or on-site. Oil is found below the surface of earth built sometimes the location is also under water.

Nearshore Outsourcing

The disadvantages of outsourcing software-oriented projects may not be immediately apparent. Many wouldn’t imagine that distance is an obstacle for software development, for instance. However, differences in culture, language and time zones each bring their own challenges to operational efficiency. Onshore firms tend to be more efficient in requirements collection and definition due to a lack of language and cultural barriers.

Offshore, Nearshore and Onshore

For example, if you’re in the United States, Nearshore might mean hiring developers in Canada or Mexico. Since it’s a region close to your home country, it’s easy to get to and from. Nearshoring comes from the business term “offshoring.” The word https://www.globalcloudteam.com/ relatively follows a similar concept of external hiring in a closer location. Specifically, nearshoring is hiring people within the same geographical region. Both countries generally share the same time zones or have minimal time differences.

Onshore vs. Nearshore vs. Offshore Outsourcing: What are the Differences?

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 software development onshore. This option can help you maintain or grow your reputation in that country or exploit a stable local economy. The main advantage of onshore outsourcing is that you can take advantage of local talent, and analyzing your customers’ needs can lead to a better understanding.

Cost – if you expect some savings, you should incorporate employees’ benefits, insurance, and travel allowance to the chosen countries. Moreover, Nearshore Data Capture can be extremely helpful when companies deal with highly variable documents or when the results of automated methods still need to be handled manually. What the Kardashians can teach your FI about fintech partners to identify niche markets.

Favorable time zones

According to a Statista report, this sector generated revenue of $66.5 bn globally in 2019 alone. This shows how huge the market is and that tech companies are not afraid of moving some responsibilities to other countries. Although the quality of work still depends on the company, Onshore Data Capture are generally very good.