Offshore vs. Nearshore Outsourcing: What's Best for Your Business?
In our latest article, we compared the three types of outsourcing and uncovered the benefits of each one of them.
Although the relatively low costs of outsourced software development attract many product owners, they often find it hard to distinguish between the different types of outsourcing. What is the difference between the three outsourcing types, and which one is better for your business? Read on to find out!
Offshore vs. onshore vs. nearshore outsourcing
Let’s start by clarifying the definition of outsourcing. Outsourcing means hiring external talent for your business needs, such as freelancers, consultants, or augmented teams. Outsourcing software development is a proven, cost-effective approach for any organization trying to remain competitive.
Consider a corporation based in the United States. The cost of providing a ready-to-use software product requires not just the employment of skilled engineers but also the renting and setting up of workspaces. All of this requires a sizable budget, which the organization can hardly generate.
At first glance, onshore software development seems a viable option, but it comes at a price. Relatively high labor costs and a limited candidate pool are the two main disadvantages of hiring IT experts in the West. According to the US Bureau of Labor Statistics, demand for software engineers is about to rise by 26% by 2029, with 310,000 new jobs generated within the following decade. For the past years, companies in the United States and Western Europe have trouble filling their onsite vacancies.
Many companies are attracted to offshore development because it helps them to scale without sacrificing quality. Developers from Asia, Eastern Europe, and Latin America demonstrate competence, commitment, and enthusiasm about all things technical. Another benefit of recruiting remote development teams is their low wages: the average software developer from Ukraine receives ten times less than his peers in the United States.
Nearshore outsourcing is the middle ground between offshore and onshore development. Since the team is located in a neighboring country with a compatible time zone, you can get optimal communication and face-to-face meetings while saving development costs. Compared to hiring onshore or in-house developers, both offshore and nearshore outsourcing provide tangible benefits for business.
Benefits of offshore development
As your business grows, you may consider building your digital presence or refreshing existing digital products. Setting up an in-house software development team is a resource-consuming process, and lack of industry experience doesn’t make it any better. That’s when offshore software solutions come into play.
By partnering with remote development teams, you expand your business with skilled employees geographically distant from your company headquarters. And you get some profound benefits, too.
Access to a large talent pool
Offshore development offers an extensive pool of professionals in every category: any technology, any framework, and any experience. Free from all the headaches of the employee-hiring process, you can simply approve the candidates you prefer and concentrate on business.
Lower development costs
When you choose to develop your software offshore, you can reduce project spending by 60%. Too good to be true? Nope! Offshore teams don’t ask for health insurance benefits and do not need the client’s infrastructure, not mentioning the difference in salaries in your favor.
Faster product scaling
Well-established work processes allow offshore companies to cut down the time to market without affecting product quality. No onboarding needed: offshore teams immediately ramp up your project and start delivering within two or three weeks.
Focus on core expertise
Hiring offshore development experts will be your best shot If software development is not your company’s niche. Merging industry focus with end-to-end experience, external teams build solutions that perfectly fit the market and users’ needs.
Is nearshore outsourcing better for your business?
The benefits of nearshore outsourcing outweigh other approaches: nearshore outsourcing adds more value through the geographic proximity of your remote development team. With a dedicated team within arm’s reach, you ensure smooth communication with your on-site experts.
Nearshore software development eliminates cultural differences that can affect communication: remote teams adopt the customer’s cultural approach and seamlessly integrate with internal resources. To sum up, nearshore outsourcing enables effective cross-team collaboration and better control over the development process.
Ukraine is one of the top nearshore development destinations for customers from Western Europe. It was named the most successful outsourcing destination in 2017 by the Global Sourcing Association in the UK. Time zone overlaps, English fluency, and similar working culture of dedicated development teams in Ukraine ensure fruitful collaboration and fast project delivery.
Hiring developers in Ukraine is right for you if you’re looking for:
- Highly skilled professionals with appropriate university education.
- Developers with experience of working on international projects.
- Fully dedicated and strongly motivated team members.
- Low labor costs combined with a high code quality.
- Experts that follow the industry standards and latest tech advancements.
- Relatively low taxes and support from the government.
- European values and cultural awareness.
The first step to thriving outsourcing partnerships is narrowing down your talent hunt. It's essential to partner with someone who offers the best value for your company, regardless of which country you select for outsourcing software development services. Sometimes it’s less about the cost or geographical proximity and more about determination and efficient work processes.
Dedicated development teams in Ukraine offer consistent communication and streamlined management regardless of your geographical proximity. Read more about the benefits of hiring dedicated development teams here. And if you’re eager to know more about software outsourcing, check out this article.
Blackthorn Vision provides full-range outsourcing for your business, including hiring the best IT talent, managing development teams, and supporting effective work communication. Kick-start your project with us now and get ready to level up your business!