Should You Choose Offshore vs. Nearshore Outsourcing?

Whether it’s to build a website or a mobile app, many businesses find themselves realizing that hiring a local software development team just isn’t within their budget. As a secondary option, many companies will opt to hire an offshore software development teams instead, while others will choose to go with nearshore teams.

But what’s the difference between offshore vs. nearshore outsourcing? And is one option better than the other? While one can’t really say that an offshore or nearshore team is inherently better than the other, some software projects are certainly a better fit for each type of team.

Let’s take some time to explore your options, so you can choose if offshore vs. nearshore outsourcing is better for you.

Defining Offshore vs. Nearshore Outsourcing

Before breaking down the benefits and drawbacks of both types of outsourcing, let’s define these two terms.

When most think of outsourcing, they are thinking of offshore outsourcing. Offshore outsourcing can be defined as when you hire a team that’s overseas from your company to provide you with a specific service or product. For instance, if you’re located in the U.S., you may hire a software development team from India.

Not all outsourcing occurs overseas, however. For example, nearshore outsourcing can be defined as when you hire a team from a neighboring country to provide you with a specific service or product. Again, if you’re in the U.S., an example of this may be hiring a software development team from Canada.

Now, let’s weigh the benefits and drawbacks of these two types of teams:

The Drawbacks of Offshore Outsourcing

  • Language & timezone barriers - The most notable drawbacks of working with an offshore team are the differences in language and timezones. Even with a diligent team, these two factors immediately put you at greater risk for miscommunication, which can result in other project-related issues.

  • Differences in processes/culture - In addition, differences in culture can present issues in terms of how the development process of your software project is approached. American culture values more stringent processes, while many cultures on the other side of the globe take a more lax view. This can result in missed deadlines or issues with quality. 

  • Lower quality results - Along with less well-defined processes often comes poorer results. With quality assurance not always built into their processes, your final software product is less likely to meet your expectations. 

Find out how to avoid 6 Offshore Software Development Risks.  

The Drawbacks of Nearshore Outsourcing

  • Almost as costly as onshoring - Many businesses choose to outsource for the cost-savings, but nearshoring is often not as cost effective as you’d think. For instance, the costs of hiring a Canadian vs. a U.S. team often rival each other.  

  • Cultural differences are still possible - Cultural differences aren’t strictly a risk you can encounter when you hire an offshore team. Even if your team speaks the same language as you, cultural differences, from holidays to cultural mores, can present disruptions to the development of your project.

  • More limited talent pool - Searching for software developers in the U.S., for instance, can be a challenge, as there is such a high demand for tech skills but not enough talent. Unfortunately, many nearshore countries have a similar tech shortage, limiting your options for who you can hire. 

The Benefits of Nearshore Outsourcing

  • Same first language & timezone - While this is not always the case, there’s a chance you and your nearshore team will speak the same first language. Better yet, they may even be in the same timezone as you. 

  • Processes more similar to yours - Although cultural differences are likely to still arise, in many cases, the processes of a nearshore team are more likely to be similar to yours. This creates greater similarities in your expectations.

  • Higher quality - Depending on which country you are nearshore outsourcing to, there’s a good chance that your nearshore team will provide a higher quality product than most offshore teams will. 

The Benefits of Offshore Outsourcing

  • A larger talent pool to pull from - If you merely look at nearshore, or even onshore teams, you run the risk of greatly limiting your options. Instead, you can choose from talent anywhere in the world.

  • Focus on your business, while your team works away - When your team is overseas, they will most likely work on your software project while you sleep. That means you’ll experience fewer disruptions during your waking hours, giving you more time to focus on your business.

    As an added bonus, you’ll wake up to further progress on your project!

  • The ultimate cost-savings - We’ve saved the best for the last: When it comes to offshore outsourcing, you’ll have the highest likelihood of getting more for less. With hourly development rates a mere fraction of those in the U.S., you can maximize your budget, big or small.

Is Offshore vs. Nearshore Outsourcing Better for You?

After taking a look at the benefits and drawbacks of offshore and nearshore outsourcing, it’s time for you to decide which option is best for your project. 

Let’s review the main takeaways: While nearshoring is more likely to provide you with higher quality software development, the cost-savings isn’t always as significant as one might think. In contrast, offshoring has the potential to present greater risks, but it can also present you with significantly greater cost-savings. As such, you’ll win and lose some regardless of if you choose offshore vs. nearshore outsourcing. 

But what if you want both? Thankfully, there’s another option. Here at ClikGlobal, we bring together U.S. and offshore team members to provide you with the quality yet cost-effective software development services. 

To get your hands on the best of both worlds, get in touch with us today.