Nearshore Vs Offshore Outsourcing

You have options when it comes to outsourcing software development projects. The term “nearshoring” means working with a team in a nearby country rather than the other side of the world. Countries in Latin America such as Mexico, Costa Rica, and Colombia are prime examples of places that are typically used for nearshore outsourcing. In contrast, “offshoring” describes working with countries across the ocean – such as India, Ukraine, and China. In this article, we’ll take a look at nearshore vs offshore outsourcing so you can better understand the pros and cons of each software development outsourcing model.

Nearshore vs Offshore Outsourcing: What are the differences?

The most striking difference between the two software development outsourcing models is the higher level of collaboration enabled by Nearshoring – you share similar workday hours and time zones as your outsourced team members. Close proximity to nearshore countries like Costa Rica makes travel easy for in-person meetings – another real advantage of nearshore outsourcing. A good nearshore development partner will also deliver the English fluency and cultural affinity that enable a great working relationship with your U.S.-based staff.

In contrast, offshore outsourcing can be characterized by poor and ineffective communication due to long travel distances and extreme time zone differences. Who wants to be on work calls at 11 p.m.?  Who wants to wait a day for an answer to a quick question? Time zone differences are a major hurdle for collaborative, Agile software development.  Poor English fluency and cultural differences can compound a frustrating experience.  Sometimes things get lost in translation. Can you relate?

So why do people choose to offshore software development? The biggest driver for offshore outsourcing is typically lower hourly rates. The cons of offshoring, however, are significant, often requiring increased administration attention and longer cycle times.  

Why choose a Nearshore vs an Offshore Solution?

There are some projects that lend themselves to the low-cost offshore alternative. These include maintenance tasks and very well defined waterfall projects. Offshore Agile development, on the other hand, is considerably more challenging – if not impossible to accomplish.  

Find out how nearshoring can help you extend your software development capacity, increase project velocity, and accomplish real Agile development within your budget.  Download “The Nearshore Solution Infographic” to dive into the advantages and disadvantages of different outsourcing alternatives.  

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