Nearshore vs Offshore: Which Software Development Strategy Makes Better Sense?
Software development is so prevalent that it seems like a simple enough task to the layman. However, the truth is far more complicated than one would imagine, owing to the many choices it involves. Companies must decide the OS platform, the language they will use, and so much more before they can even get started on the development project. And amid this sea of choices is a question that confounds companies to significant extents: Which outsourcing strategy should one opt for? But worry not, for here’s a guide that seeks to ease that choice for you.
When it comes to outsourcing, confusion often arises between two options: Nearshore and Offshore. Let’s start with the basics: Nearshore refers to when a company outsources a development project to a service provider located in a neighboring country. Whereas offshore is when a development project is outsourced to the vendor located in a country that is an entirely different time zone. Once again, all of this may seem pretty much similar concepts to the same, but when you delve deeper, you realize there are some compelling differences between both types of outsourcing. And each of these differences is powerful enough to decide the fate of the endeavor. Now, let’s take a look at some of these differentiating factors.
1. Development cost: Easily among the most significant factors, the price of a development project plays a vital role in the decision. And it tends to vary from region to region; say, in North America, the going rate for such an endeavor typically ranges between $50/hour to $200/hour, whereas in Asia, it is somewhere between $15/hour to $100/hour. Based on that and the company’s location, offshore development is generally the more affordable choice.
2. Ease of communication: Development is a complicated endeavor, which means seamless communication is fundamental to its success. Now, with offshore development, in-person interaction is rare; but, that is made up of via a plethora of communication tools, such as that for video calls, conferencing, and more. On the other hand, with nearshore development, it can be easier to sit down for meetings in person regularly, if at all.
3. Access to expertise: The entire basis of outsourcing is accessing knowledge, which may not be available in one’s domestic market. Outsourcing allows companies to find and select just the kind of skill that they deem necessary for their software development project, while also checking any other boxes they may have on their list, including budget. Nearshoring also offers a scope of finding better talent; the range is immensely widened with offshore outsourcing.
There’s a reason why more and more businesses are seeking software company partnership, including all of the things and factors discussed above. What makes the phenomenon of outsourcing an even more preferable choice is that it stands to benefit small scale companies as well as it can help organizations operating at a much larger scale. But before you jump on the outsourcing bandwagon, we recommend a careful analysis of the project’s requirements and that of the business.
