What is Near Shoring? How does this compare to offshoring
and onshoring, and what are the key benefits for enterprise software
development?
If your business doesn't have Amazon resources, it's hard to
keep up with new technologies.
Growing your pool of technical talent, especially software
developers, is not an easy task, especially if your business needs the same
experience as Amazon peers in your industry! This is where outsourcing plays a
key role and where software development services can come in handy.
So what is nearshoring? Is this the same as onshoring or
offshoring? Let's figure it out.
Nearshoring versus onshoring and offshoring
How is onshoring different from onshoring and offshoring?
All three are different outsourcing models.
Outsourcing occurs when, by agreement, a third party agrees
to provide services to a company. For example, your company might outsource the
entire IT department or just some of the tasks.
Outsourcing often involves the transfer of personnel from a
company to a company that is currently providing services.
Geographic proximity
The main difference between the three types of outsourcing,
i.e. onshoring, onshoring and outsourcing, lies in the geographic proximity of
the client and the supplier.
Coastal outsourcing involves hiring a provider physically
located in a neighboring country or in the same time zone.
Outsourcing refers to the use of outsourcing service
providers within the same country.
Offshoring is more like non-offshoring; the provider is not
located in the same country as your client.
Why Nearshoring?
Now let's take an expression at the pros and cons of
nearshoring.
1. Close geographical distance
Compared to offshoring, the near time zone improves
communication during the working day. When an emergency arises or a critical
upgrade is needed, close and onshoring provides the assurance that key
personnel will be available during normal business hours.
Offshoring service providers will offer coverage 24 hours a
day, 7 days a week, but this will cost more. In addition, high-level management
will be unavailable in the near future. For example, for software development:
scheduling an appointment to resolve a problem in real time leads to faster
detection and removal of blockers during the development process.
2. Reduced operating costs.
Partnering with a coastal provider reduces the cost of
typical resources associated with providing onshore or in-house services.
However, there is a trade-off as the services are provided
in different locations or in different countries. It requires a strict SLA
(Service Level Agreement) to minimize potential misunderstandings and rework,
and reduce development overhead.
3. Wide range of talents
One of the reasons for outsourcing is the lack of technical
talent. According to Korn Ferry, 85 million jobs will remain unfilled by 2030
due to a shortage of skilled workers.
With outsourcing, personnel problems are no longer a problem
for clients. For example, the nearest service provider must ensure that the
services are provided to the client in accordance with the outsourcing
agreement, regardless of any staffing problems they may face.
4. A unified cultural approach
Cultural proximity makes it easier for both parties to find
common ground and promotes more fruitful cooperation, so this is a good reason
to choose a supplier in the same country or in a neighboring one.
Choose a provider
The easiest way to choose an outsourcing service provider is
to hire a business process management consultant. Your consultant will conduct
an initial business analysis, write the scope of work and costs for services
and finance.
In addition, they can invite experts to advise on IT security
and, in particular, cybersecurity, legal and regulatory requirements. ISO 9001:
2015 and ISO 27001: 2013 certifications are considered the global standard in
the IT industry.
Key findings
Doing everything in-house is no longer profitable and can
deter mature companies from expanding and growing.
Outsourcing can be a competitive advantage, and there are
many options from onshoring, near-field and offshoring.
For software development or big data management, Nearshoring
can provide the best of both worlds with cheaper costs and real-time data
exchange, minimizing delays during the software development cycle, and fast
fixes.
Get expert help in choosing an outsourcing service provider.
