Outsourcing or nearshoring is, for the vast majority of companies, a more than strategic decision which implies the incorporation of an external supplier to their value chain. Utilizing nearshore is a smart and common solution for entrepreneurs, startups, small businesses, and global corporations to reduce costs and improve company efficiency.
The delegation of competences allows organizations to improve their performance by focusing their efforts on the activities of their core business. In the specific case of software and application development, it means leaving the design, conceptualization, implementation and maintenance of specific technological solutions in the hands of others.
Several years ago, software development languages evolved to give way to increasingly complex methodologies. To cover these job needs, quite a few companies are opting to provide development services to others, that is, third parties. Citing information from State of Software Development, 4 years ago 52.5% of the companies that were surveyed confirmed that they had already contracted software projects with external parties.
Thus, there are different types of outsourcing depending on where the service provider is located. Although there is no one option that may be suitable, it is important to know the advantages and disadvantages of each of them. We define them below to help you make the decision that best suits the needs of your project.
Nearshore: means that you delegate software development or certain tasks to companies located in geographical proximity to your country. When we talk about nearshore hiring, the time difference between your company and the third party should be 1 to 3 hours.
Offshore: would involve partnering with an American or Asian company
Onshore: would mean hiring a national software development company.
But here we will focus more on nearshore software development. Let’s start with the nearshoring advantages:
It has great potential and can be an outlet for various companies. So it’s time to describe the benefits of nearshore software outsourcing.
It is no secret that companies apply outsourcing methods to reduce expenses. Plus, you don’t have to hire developers, pay salaries, rent an office, and provide employees with hardware and software. Due to the fact that common outsourcing countries are developing countries, prices can be significantly lower than in developed countries.
But nearshore software development also has some disadvantages as well. No business solutions is perfect and without complication. It all depends on your company’s goals, budget, employees, industry niche, and capabilities.
All the negatives of offshore aside, it still offers the lowest rates. Depending on your location, you can still find affordable options that can match the price of an average, but this will be more of an exception than a rule. Therefore, if there are no cheap providers in your region, you should consider hiring a software development company abroad.
Sure, any country has its software development companies, but the quality offered by no- name companies will be quite different from well-known outsourcing destinations like Ukraine or India.
To conclude, we can say that looking for a nearshore team allows you to broaden the horizon of possibilities, so that it is easier to find well-qualified teams. In addition, it supposes a reduction of business costs in comparison with a national supplier. Nearshoring is the smart solution your company needs to incorporate in its overall strategy.