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Onshore, Nearshore and Offshore Development: What do each term mean?
Generally speaking, outsourcing falls into three categories: onshore, nearshore and offshore. Here's a breakdown of what each of these software development services entails.
Land Development
Onshore development is a form of outsourcing where both partners work in the same country. A company based in Chicago, for example, might outsource its software development needs to a vendor based in San Francisco. Through this model, partners can communicate in real time and even meet in person if the project requires it.
Development near the coast
Nearshore development means that a company outsources software development to a nearby country or country with a similar time zone. For example, a company in the United States might turn to a supplier in Latin American countries like Argentina or Mexico, while a company in Germany might turn to a supplier in Ukraine. One benefit is that nearshore partners tend to be culturally compatible. They are also typically cheaper than onshore suppliers.
Offshore development
In the case of offshore development, the partners are geographically distant – in some cases, on the other side of the world. For example, a company in the United States might work with a team in India or China. In general, this is typically the least expensive and probably the most well-known outsourcing model.
Best Practices for Offshore Development
Set goals
Companies should outline their objectives for the partnership, identifying what they hope to achieve from the agreement. These may include requirements for a specific project, a deadline for completion, special features the software must have, and quality measures.
Check references
Review your partners' portfolios and reviews on platforms like Clutch, Glassdoor, and social media. You can also ask for references from previous clients. Organizations should pay attention to specialization in their industry, niche, and experience level.
Establish collaboration
Use communication tools like Slack, WhatsApp and Skype. It's a best practice to define in advance the frequency of check-ins and the times they will occur. Organizations can also use project management tools like Jira and Monday to track progress.
Take security measures
To prevent security and data breaches, organizations must take steps to protect their information. These steps may include giving third-party vendors access to only the data they truly need, as well as having the partner sign a confidentiality agreement.
Why Companies Choose Offshore Software Outsourcing
Offshore software development companies offer many benefits to companies across all industries.
#1 Specialization and Experience
If a company needs a developer with a specific set of skills, it can be difficult to find a supplier nearby. Using an offshore model gives the company access to talent around the world, including suppliers located in distant countries. Some foreign countries have emerged as high-quality suppliers, including India, Argentina, Mexico, China, the Philippines and Ukraine.
#2 Cost-benefit
Offshore software development is typically the cheapest outsourcing model when a company is based in North America or Western Europe. Onshore is usually the more expensive option in this case, and nearshore usually falls somewhere in between. This is because offshore suppliers are typically in countries with developing economies.
#3: Faster time to market
A dedicated team will generally complete a project in a shorter period of time than an in-house team because they will not be working with additional business priorities and tasks. The advantages of this include staying ahead of the competition and ensuring the software is timely.
#4 Risk Mitigation
In an offshore partnership, both the client and the supplier bear the burden of any risks associated with the project. Both parties have an interest in the performance of the end result, the money you make and your overall quality. This often means faster completion times and higher quality products.
