What is Nearshore Outsourcing? Everything you need to know.

Let us guess. You have been wondering why many countries prefer to search for IT services in other countries. Is that so? What is more, some opt to hire tech specialists on different continents. Why? The answer is entirely predictable. Every company wants to get affordable services of the highest quality. The thing is, such services sometimes can't be found in the native country of a company. Due to this, the only way to get needed help is to hire experienced staff from abroad.

However, things like time-zone problems, different management approaches, cultural inconsistencies, and so on can stand in the way of productivity and harm business. That's precisely the case when nearshore outsourcing is the best option. In this article, we will give an insight into this type of outsourcing and describe what benefits it provides.

What is the Definition of Nearshore Outsourcing?

As for the definition of the term, nearshore outsourcing (in other words, nearshoring) is a process of delegating some IT-related work, like mobile application development, to companies that are located in nearby countries.

Let's say you live in Germany and want to shift some part of work that can't be done in-house to a team from abroad. At the same time, you are looking for a way to cut costs but want to avoid dealing with time-zone offsets. In this case, look for talent in neighboring countries like Ukraine.

Nearshore vs Onshore vs Offshore: Is There a Difference?

Before you choose and go with nearshoring, it is highly recommended to compare this approach with offshore and onshore outsourcing to get a complete picture of their differences.

If you aren't a fan of long definitions, the following three sentences will describe the differences between onshore vs offshore vs nearshore outsourcing.

Nearshore outsourcing means that you live in the USA and hire a team from Mexico.

Offshore outsourcing means that you live in the USA and hire a team from Ukraine.

Onshore outsourcing means that you live in the USA and hire a team from the USA as well.

If you need a more detailed explanation, keep reading.

Onshore outsourcing stands for a model of outsourcing that enables companies to hire third-party organizations to work on particular tasks. The external personnel is from the same country or region. The advantages of this approach are clear:

• both a client and a hired team speak the same language;

• the same time zone;

• Young specialists receive working opportunities, which means the growth of a home country's economy.

As for the disadvantages, this model is less cost-saving than the other models. As a rule, client countries are developed countries, which means prices for professional developers' work are pretty high.

Being the most popular outsourcing model, offshoring suggests that you delegate work tasks to foreign companies that are usually located in distant parts of the world. Thanks to this model, it is easy to cut costs and optimize workflows. There are quite a few countries, like Ukraine, with a vast talent pool and low hourly rates. This approach lets clients hire top IT specialists (developers, engineers, designers) and save money simultaneously. The time-zone differences can be a problem and a solution. Of course, a big difference in time may cause issues with workflow coordination, but it is also possible to take advantage of it and set up round-the-clock work.

To find a nearshore outsourcing definition, scroll up a bit. We want to add that this model puts the main focus on a nearby location of potential employees. The slight difference in time and the opportunity to hire experienced developers at a lower price make nearshoring such a popular choice.

Which one to choose?

It entirely depends on you and your needs. If you are tight on a budget, offshore outsourcing is the most logical solution. Although you will need to pay closer attention to the work processes and check if everything is done following your objectives, this approach is the most cost-effective.

If you are ready to pay high wages to professional developers from your home country, onshore outsourcing is the way to go.

But if you look for a way to save money and hire a team of first-class specialists from nearby areas, nothing can beat nearshore outsourcing. You will get more engagement with the process, faster addressing whatever issues might occur, and more control of your project.

The Advantages of Nearshore Outsourcing

Let's look closer at what benefits nearshore software development offers and how your company can use them.

1. You spend less time on flights. Want it or not, but it is necessary to interact with your team face-to-face now and then. An 8+ hour flight isn't on your to-do list daily. Since nearshoring means your team lives in nearby countries, the chances of long traveling are minor.

2. No need to deal with time-zone differences. By hiring a nearshore development center, you eliminate the time-zone issues that can stand in the way of efficient communication. As a rule, a client company and a services vendor live in the same or near time zone, so they don't suffer from time differences and can communicate during regular working hours.

3. Fewer or no cultural and language differences. The level of communication efficiency depends on such things as language and cultural background. The fewer differences there are, the better. Your staff and your nearshore outsourcing company's employees presumably know English at a high level, but if you all speak the same language or languages similar to one another, all the work will be done faster. Good examples are Russian-Ukrainian and Polish-Ukrainian language groups. The same thing concerns cultural similarities. No one wants to put off a release date just because a partnering company has days off due to national holidays that one doesn't celebrate.

4. Cost-effectiveness. Even though nearshore software development might be less cost-saving than offshoring, it still saves lots of money for a client. Not only do you pay lower wages, but you also save a substantial part of your budget on traveling to neighboring countries.

It should be noted that these are just a few main advantages of nearshore outsourcing; there are a lot more of them.

Things to Take into Account when Choosing to Nearshore IT Services

As with onshore and offshore outsourcing models, hiring a nearshore outsourcing company can work to your advantage, but only under one condition. It is necessary to weigh all the pros and cons and do thorough research before employing external personnel to augment your in-house team. Things like a company's location, its country's economics and laws, and the level of developers' training and experience should be taken into account before making a decision. There is no right or wrong way here, and everything depends on your business objectives, the amount of money you can spend on a project, and your overall vision of further cooperation with a team you'd like to hire.

There is a large number of reliable IT services vendors out there to choose from. Ukraine stands out among them. Thanks to the wide talent pool, the ability to create high-quality IT products, and low labor costs, Ukraine remains one of the most popular destinations for outsourcing. That is why we highly recommend you consider Eastern Europe and Ukraine as options when choosing a country for outsourcing.

The best part is you can enjoy the benefits of nearshore outsourcing by opting for professional help provided by Yojji. We offer a whole spectrum of IT services and build high-quality, cutting-edge solutions at affordable prices.