- On April 5, 2017
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If you are looking to add experienced developers to your team, you’ve probably already noticed the lack of talent here in the U.S. It’s not that the U.S. doesn’t have any highly skilled developers. We just don’t have enough. Rest assured that you are not the only one who is struggling with this challenge. Venture capitalist Marc Andreessen recently told the New Yorker, “Our companies are dying for talent. They’re like lying on the beach gasping because they can’t get enough talented people in for these jobs.”
Instead of waiting for the right developer to pop out of nowhere, there are other options to consider before wasting too much time, money, and nerves on the recruiting process. Of course, I’m talking about outsourcing, but you’ve got more than one option when it comes to outsourcing, and each one has its benefits and drawbacks depending on what you need.
Just like when you’re looking for the right developer, before you hire an outsourcing services company, determine your priorities first. What are you looking for? The best developers? The best price? The least hassle? More security? Or a mix of everything?
Whether the company you choose can meet your expectations depends to some degree on their location. So, the question is, should you choose an onshore, offshore, or nearshore company? And is there maybe another option besides these three that fits your needs even better?
The following are some of the benefits of onshore, offshore, and nearshore outsourcing:
Onshore outsourcing is the closest outsourcing to home because you are working with a company that is located in your home country. The advantage of onshore outsourcing is that you’re working with a highly skilled American team in your own country, but this option comes with a high price tag (hourly rates of far more than $100 are common). Onshore teams simply cannot compete with the prices of offshore and nearshore companies.
Another drawback of onshore outsourcing besides its price is that onshore companies often don’t have the right talent available right away simply because they can’t afford to maintain any unoccupied workers. So when you hire an onshore company, you need take into account the time the company requires to hire and train the talent you need.
Offshoring usually refers to working with teams in far-away countries such as India, China, or Ukraine. While the cost of working with offshore companies cannot be beaten (the hourly rate is often as low as $20), there are some drawbacks that one should consider.
Working with a team that is on the other side of the globe in a completely different time zone makes communication a lot more difficult, and we all know that communication is key for high-quality, cost and time-efficient work. Being twelve hours apart simply complicates any type of communication.
Also, longer waiting times and miscommunication because of language barriers and cultural differences can easily end up raising the costs again, and this doesn’t include the stress you had to go through in the process. But ultimately, if the lowest hourly rate is your priority, offshore outsourcing is most likely your best option.
Nearshoring works just like offshoring except that your business pairs with workers in similar time zones, which makes communication much more of a breeze. Even onsite visits can happen faster and more frequently. Plus, compared to onshore outsourcing, nearshore still offers some cost savings.
However, in the end nearshore cannot compete with the hourly rates of offshore companies (nearshore rates usually tend to be somewhere around $40/hour), but the convenience of being in the same or a similar time zone and having shorter travel times for onsite visits not only decreases costs but also stress for you and your company.
Comparative Aspects of Onshore, Offshore and Near Shore Outsourcing:
One of the most important reasons for companies to consider outsourcing all or someof their operations to other companies is cost savings. The direct labor costs of offshore locations can be much less thanonshore locations. Other aspects,such as travel costs, can be efficiently managed by the companies to improve the bottom line. However, some companies may consider near shore options due to other benefits, such as similar culture and easier travel to near shore locations. But with depreciation of currencies in some offshore countries, companies are largely considering offshore outsourcing.
2.Speed of Execution:
The speed of execution depends upon the complexity of the campaign and the firm handling the outsourcing project.The availability of resources and the ability to define requirements clearly are also two key dimensions that can affect the speed of execution. Due to lower direct labor costs, offshore firms have greater flexibility in piling on resources in advance of a project, and in beginning implementation more quickly than an onshore firm; onshore firms cannot afford to maintain idle resources and they must hire and train agents for new project implementation. Onshore firms tend to be more efficient in requirements collection and definition due to a lack of language and cultural barriers. Offshore firms can also handle requirements communication, but they must work to overcome language and culture barriers.
3.Quality and Expertise:
At most contact center locations, whether onshore, offshore or near shore, there is an abundance of high quality professionals with domain-specific expertise. While language and cultural barriers can impact the quality of service provided, this gap can be closed through specialization and quality control.
Every outsourcing project faces execution risk. This risk is increased when projects are outsourced to near shore or offshore locations. However, execution risks can be mitigated and greatly reduced through both a risk management plan, and an effective management plan.
Businesses contemplating outsourcing their project to onshore, near shore, or offshore firms must make a decision after comparing all of the benefits offered. The choice made by the businesses will depend completely upon their own unique needs and goals.
Offshore Development vs Onshore Development:
Companies both big small such as multi-national companies, start-ups and even local businesses are looking into what the offshore development business model offers. Offshore development was only something that large global companies engaged in many years ago due to the geographical and language challenges that existed. Today, these are both not a factor as the communication and transparency challenge are both negated due to the technology that has come into everyday life. First, let’s discuss what exactly is offshore development as well as what why it has become such as a popular as well as viable option for many companies across the world.
1.Offshore Development Model:
Offshore development means the process of outsourcing your development needs such as web, mobile or even custom software development to countries such as India, the Philippines, Ukraine and so on. The reason why people look at offshore web or software development is mainly the cost-savings that is had, the time that can be saved as well as to minimize internal overhead or costs. The offshore model has been around for a long while but with world becoming more global and technology making it easier than ever before to communicate to anyone no matter where they are located, the demands for offshore development have increased substantially due to how easy it has become.
The offshore model is used for multiple things not only offshore software or offshore web development such as customer service, data-entry, cold-calling along with many more BPO or KPO processes. The main reason is that a person in India or any other developing country will cost significantly less when compared to the US, UK or Australia for example to name a few Western countries. The bottom line is that if you are able to find a good offshore development partner, you can really save yourself time, money, HR headaches and other operational expenses. The key is to find a good offshore partner who has the experience, expertise and technical skills to accomplish what you need whether that maybe be a simple website or even a run a fully operating customer service center.
2.The Onshore Model:
The onshore model is when the work whether that be web development, software development or anything else is not outsourced or offshored to another country. It is done locally in your country by the people that live within it. For example, if you need a website developed, you would get it done by a web development agency within your country such as the US, Europe or Australia. The benefits are obvious such as they will understand the local culture, communication will not be a problem as well as it will be easy to explain to them what you need comparatively to someone outside your country. Lastly, they will not be any time difference compared to an offshore development partner in some cases.
Cost is the main difference between the onshore and offshore development model. The cost will be much more to hire a local development person in the US, UK or Australia for example when compared to hiring someone in a developing nation such as India, the Philippines or Ukraine for example. An onshore development partner will also be able to provide you other local expertise that an offshore development partner will not be able to. What makes business sense for you is ultimately your decision.
Which One Is Better?
The magic question of which one is better really depends on what type of work, what type of budget and who you actually choose to work with. Just because you work with an onshore or local partner doesn’t mean that you will be happier or your experience will be better by any means. If money is no issue and you have a true need for someone to understand your local culture, then the onshore development model is what you need to choose to go with. If you don’t have a huge budget and are looking for something that does not require local expertise, then the offshore development model is what you should go with.
Offshore development can really save you time, money and much more when it comes to getting what you want done easier than you imagined. The key is to find an offshore development company that knows what they are doing and has done what you need in the past or at least has the complete expertise to deliver what you are looking for. Finding a suitable partner is by no means an easy task but if you take the necessary steps to find a suitable offshore company, then you can really get a lot accomplished.
For example, if you are located in the US and work with an offshore development company in India, you can get work done while you sleep due to the time difference which can work towards your advantage. Choosing to work with or not to work with an offshore development partner or an onshore development partner is really a case by case decision which needs to be carefully evaluated. If you are able to find a suitable and experienced offshore development partner, you can get a lot accomplished without breaking the bank.
If you are looking for an experienced, trusted and affordable offshore development company, please feel free to reach out to the team at Mind Digital for any of your development needs you have, big or small.