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Nearshore vs Offshore Software Development: Differences, Pros and Cons

Hiring software developers with experienced talent is close to impossible, thus companies are resorting to offshore and nearshore software outsourcing. Courtesy Photo/Twitter

Hiring software developers with experienced talent is close to impossible, thus companies are resorting to offshore and nearshore software outsourcing. Courtesy Photo/Twitter

If your company has recently tried to hire software developers, you probably know this firsthand – finding experienced talent is close to impossible. You are not alone. American companies are struggling to find the right people to fill key positions for their IT teams. The reason? A talent shortage that’s sweeping the nation and got them resorting to offshore and nearshore software outsourcing.

The situation is far from an exaggeration. According to a recent report, the U.S. is short by around 470,000 professionals with the proper software development skills. This paints a scenario in which companies are trying to fish the right candidates from an ever-shallower pool. In fact, this has become so problematic that business executives believe the shortage is the top emerging risk.

So, how can you find the right people to help you with your development? Well, you can turn to a solution that’s growing with each passing month — outsourcing software development. The practice isn’t exactly new. But the context is so dire that companies are using it increasingly. It has grown so much that the global outsourcing market rose to 85.6 billion U.S. dollars by the end of 2018.

Since it’s an interesting alternative to fill talent gaps, you should seriously consider it to help your company. Where should you start? Understanding the differences between the two biggest existing outsourcing models: nearshore software outsourcing and offshore software development.

Let’s review their strengths and shortcomings so you can see which one suits you the most.

Nearshore Development
Companies offering nearshore development services share the same time zone or have a close one to that of your company’s city. The key to these companies is their proximity in the whole sense of the word. They have very similar working hours and they are close to your headquarters.

Typically, US companies collaborate with partners based in Latin America. Countries like Mexico, Argentina and Colombia all have thriving nearshore development companies that are both close to the United States and share almost identical time zones with it. This is a big differentiator from offshore companies, which are usually far from your country and have wildly different hours (think of India as the archetypical example for offshoring countries).

Working along with these companies can bring key benefits to your software development, namely:

Of course, there are some downsides when working with nearshore developers. Probably the most common one is that the costs to hire companies from Latin America is slightly higher than the ones that come when working with offshore outsourcing partners from countries like India or Ukraine. And though considering the viability of an option based on cost alone isn’t something advisable, it’s certainly a factor to take into account.

Offshore development
You can surely understand what’s offshore software development by what we said up to this point. Basically, these are third-party companies based on countries that are geographically far from your home country. As mentioned above, India is the first option that comes to mind though it isn’t the only one (Ukraine, Russia and most of Eastern Europe are known for offering this kind of services).

Offshore companies are perhaps the most well-known alternative when outsourcing simply because they’ve been doing so for a considerable amount of time now.

The reason? The 3 main benefits we can associate with them:

Though all of these benefits have their appeal, there are some cons you should consider before outsourcing to an offshore company. One of the most notorious ones is the language barrier. India, for instance, isn’t known for its English skills, which might give you communication issues and mismatched expectations. Additionally, the difference in time zones makes it almost impossible for you to meet in real time — and that’s without mentioning that face-to-face meetings are almost out of the question.

Offshore or Nearshore Development – which ones the best?
The answer to this kind of questions is always the same – it depends on the project at hand and your own personal requirements. That’s why you need to outline your needs in detail before making a commitment to an outsourcing partner.

Certain factors you should keep in mind when preparing this outline include:

Of course, there are other aspects at play when making a decision. The company’s reputation and previous work are things you need to know before choosing the right partner for you. There’s also the matter of quality. Companies have come to expect a certain quality threshold as the bare minimum for their projects, something that not all companies are capable of delivering.

Offshore and nearshore software outsourcing are the alternatives you were looking for to overcome the talent shortage currently experienced in the US. Both of them have their pros and cons, but there’s a reason why they are stronger than ever: they can work with a multitude of projects with great results. Keep that in mind when you find yet another roadblock in your next IT recruitment process.

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