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USA, Austin

Yevhen Piotrovskyi
CTO, Co-Founder
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18 March 2020
8 min to read

Everything You Need to Know about Nearshore Outsourcing

Yevhen Piotrovskyi
CTO and Founder at Yojji | Web and Mobile Development

Let us guess. You have been wondering why a big number of countries prefer to search for IT services in other countries. Is that so? What is more, some opt for hiring tech specialists on other continents. Why? The answer is quite 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 exactly the case when nearshore outsourcing is the best option. In this article, we are going to give an insight into this type of outsourcing and describe what benefits it gives.

What is the Definition of Nearshore Outsourcing?

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 you want to shift some part of work that can’t be done in-house to a team from abroad. At the same time, you look for a way to cut costs, but don’t want to deal with time-zone offsets. In this case, you might look for talent in neighboring countries like Ukraine.

Nearshore vs Onshore vs Offshore: Is There a Difference?

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

If you aren’t a fan of long definitions, the following three sentences will describe you 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.

In case you feel like you need a more detailed explanation, keep reading.

Onshore outsourcing stands for a model of outsourcing which 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 isn’t as cost-saving as the two other models. As a rule, client-countries are developed countries, which means prices for professional developers’ work are quite high.

Being the most popular outsourcing model, offshoring means 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 the vast talent pool and low hourly rates. This enables clients to hire top IT specialists (developers, engineers, designers) and save money at the same time. The time-zone differences can be a problem and a solution. Of course, a big difference in time may cause problems with the 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’d like to add that this model puts the main focus on a nearby location of potential employees. The small 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 completely depends on you and your needs. If you are tight on a budget, offshore outsourcing seems to be the most logical solution. Although you will need to pay closer attention to the work processes and check if everything is done in accordance with your objectives, this approach is the most cost-effective.

In case 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

The Advantages of Nearshore Outsourcing

Let’s have a closer look at what benefits nearshore software development offers and how they can be used by your company.

  1. You spend less time on flights. Want it or not, but it is necessary to interact with your team face to face every now and then. Needless to say that an 8+ hour flight isn’t on your to-do list on a daily basis. 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 get rid of the time-zone issues which 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 hence they don’t suffer from time differences and can communicate during normal working hours.

  3. Fewer or no cultural and language differences. It goes without saying that the level of communication efficiency depends on such things as a language and a cultural background. The fewer differences there are, the better. Your staff and your nearshore outsourcing company’s employees probably know English on a high level, however, if you all speak the same language or the languages which are similar to one another, all the work will be done faster. The good examples will be 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 which one doesn’t celebrate.

  4. Cost-effectiveness. Even though nearshore software development might be less cost-saving than with 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 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, the level of developers’ training and experience should be taken into account before making a decision. There is no right or wrong way here, 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.

Truth to be told, there is a big number of reliable IT services vendors out there to choose from. Ukraine definitely 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 in particular as an option when choosing a country for outsourcing.

And the best part is, you can enjoy the benefits that nearshore outsourcing gives 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.

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NL, Amsterdam

Ildar Kulmuhametov
CEO, Co-Founder

USA, Austin

Yevhen Piotrovskyi
CTO, Co-Founder