Onshore, Nearshore, Offshore: Evaluating the Impact of Distance

To get valuable insight, you must sometimes go a long way. When you outsource business processes or web development, you don’t go the distance in millimeters, centimeters, miles, or kilometers. Instead, you make every effort to achieve your objectives. Directly or indirectly, the route you travel is proportional to the number and perceived importance of your objectives. So, before deciding whether to use outsourcing or offshore, company management teams carefully weigh their goals on the following points:

  • expenses;
  • skillset;
  • manageability;
  • cultural similarities;
  • an easy flow of information.

After settling on a goal, it’s time to investigate how that goal relates to potential outsourcing or offshore strategies. Only then can you find your own right distance.

Offshore Outsourcing

Getting services in the same country is usually appealing because it makes people feel more at ease. It’s not that every dog is a lion at home, but having everything in the same place means you don’t have to take long, uncomfortable, and expensive trips to check on progress or business processes on-site.

The attitude and language problems are other important reasons why local outsourcing is the top choice for businesses. Most of the time, miscommunication and cognitive conflict make it hard for people to understand each other. Some business owners see this opinion as a guarantee that working with an overseas team will fail since culture and language differences will only make things worse.

Even though local outsourcing services are easy to handle and don’t cost much to visit in person, their prices are often more than $100 per hour. Even if the price fits your company’s budget, it’s likely you won’t be able to find the skills you need because the market is so tight. It makes sense to do some research on your country’s core competencies first and decide if you can wait until your onshore supplier hires or trains the specialists you need. It’s very expensive for onshore companies to keep specialists like programmers on staff who aren’t being used.

Nearshore Outsourcing

Nearshoring, which is shifting to a nearby site in the same time zone, is much cheaper and still allows facility trips to be made in less time. Since nearshore outsourcing means hiring businesses from close by, cultural differences aren’t much of a problem, and language barriers aren’t a big deal either.

Nearshoring has a lot in common with onshoring, both in terms of its strong points and its weak points. There may be times when you need knowledge in a certain area. When saving money is one of the most important things to do, the comfort and ease of pairing with culturally similar teams that are close by go way down.

Offshore Outsourcing

When it comes to both knowledge and price, it’s hard to beat the overseas outsourcing approach. India and the Philippines, two popular outsourcing places in Europe and Asia, have been getting experience, knowledge, and skills by working on the outside market for a few decades. Because of this, it makes sense that overseas teams have a large group of talent that can fill all the market areas that need to be filled. Cost savings are also a big plus, and hourly rates as low as $20 give foreign sites a clear competitive edge.

If you look closely, you can find the fly in the ointment. Traveling long distances to handle or watch solution development on-site or waiting for a long time for a response from someone on the other end is stressful enough for a customer, let alone cultural differences and misunderstandings, which make working together even harder.

On the other hand, software development and business process outsourcing companies that work in overseas markets have known for a long time that possible customers are afraid of offshore outsourcing and have been doing a good job of getting rid of those fears. Europe and its overseas buyers have the same Western way of thinking, and more and more experts speak English well. You wonder how? Well, open some countries’ borders to the rest of the world. Others put a lot of money into schooling. Ukraine is a great example of this because it has made English the main subject in all secondary schools and teaches it in colleges and universities.

Which side is your best choice and which plan will get your company to the top quickly relies on your goals and resources. So, decide what’s most important, get the tools you need, and go for it! Have a nice and successful trip!