Onshore, Offshore and Nearshore Outsourcing, What Are the Differences?

Software development today comes in different shapes and sizes.

16:40 18 September 2019

There are many different languages to implement in a development strategy as well as different types of software ranging from installed client software to mobile apps and SaaS.

Companies also have options in terms of working with on-site onshore software development, and remote offshore software outsourcing development teams. They can outsource development to companies or individual developers in different regions of the world instead of just relying on local talent.

By hiring in-house they get the benefit of having developers right inside the company collaborating in real time. However, often great talent cannot be found only locally. Sometimes, a company exists or wants to open a branch in a region with a low population or a low development talent pool. Other times, the local talent pool is not attracted to the company or the region.

To gain such talent a company can look beyond their geographical zone. This way they are not stuck or tied to the development pool of their area or have to worry about competitors poaching talent.

The nice thing about outsourcing development is that it doesn’t have to be in a far-away region of the world with a time and language barrier. It can be nearby. This is where the difference between offshore and nearshore development comes in. Let's take a look at the three outsourcing models companies have today.

Onshore Software Development

Onshore development is when companies hire development talent in-house. Developers work inside the company’s headquarters, branch offices or remotely, but in the same geographical vicinity as the company’s location.

The benefits of this approach is generally a non-existent communications barrier in terms of collaboration on projects and company meetings. Since there is no time or travel barrier, meetings can be done anytime.

Offshore Software Development

This development model takes place when companies hire outsourced labor to countries from far regions of the world. An example would be a company based in California hiring development from China or India. The developers in these far-away regions may work on completely different time zones and in different languages. They also have their own work culture that differs from yours.

Benefits come in the form of lower costs and the ability to hire many developers at once to help overall productivity and drive software onto the market faster. Communications, time zone barriers and cultural differences are some of the downsides.

Nearshore Software Development

Nearshore development refers to companies finding development talent that is not far from their geographical headquarters. It could be a country next door or in a similar time zone. The same California company mentioned in the offshore example, would hire development from Mexico for a nearshore option. This form of development takes the best of both worlds and offers companies a great way to expand their development scope.

Developers in such proximity will work generally within a similar schedule, thus they can come to meetings remotely or within a travel distance. Collaboration is also easier because of the similar work time schedule and less of a language barrier. Communication barriers are generally minor and culture should be less of an issue.

Conclusion

There are reasons to choose each of these three software development options. There are drawbacks and benefits to each. Outsourcing is something companies should consider if they haven’t already and nearshore provides a perfect bridge to get started without the worry of barriers.

The key is finding the right talent for the job and a good management structure. This can, in turn, offer greater scalability in development and productivity as a whole.