Outsourcing: Onshore? Nearshore? or Offshore? Still Unsure?
So you have read our blog “Why Outsource” and have decided it is the right choice for you, but now you are faced with another big question.
Do we outsource onshore? Nearshore? Or Offshore?
The main drivers for outsourcing are productivity, labour, cost, revenue growth and risk management so we need to look at these when making our decision on where to go.
Outsourcing “Onshore” is when you give the contract to a company within your own country. Being able to work closely with your team is essential for a productive outsourcing project, so being close geographically has its advantages. Being in the same time zone makes communication that bit easier, and working onshore means you are less likely to have project management difficulties due to cultural differences. It is vital to have a shared understanding of the project for it to succeed and when you are working closely together with a clearly defined plan it is easier to achieve this.
Outsourcing “NearShore” is when you give the contract to a nearby country. For the UK this could be elsewhere in Europe, for the USA it could be somewhere in South America.It gives you some of the same benefits you get from Onshore, like being in similar time zones but sometimes you can still have languages barriers.
Being in close proximity also means that travel between the companies is quicker and cheaper than it would be between offshore companies, which enable you to be closely involved with the project.
To outsource “Offshore” means the contract is award to a company even further away in countries such as India.
This is often seen as an attractive option as the costs seem cheaper, however this can sometimes be a false economy. The time difference can also frustratingly hinder communications. If a Skype conference is needed, often it will have to be outside of office hours for you one of you.
Sometimes cultural differences and contrasting workplaces can cause project management difficulties, but having some cultural awareness can minimise this issue. It is important to remember this is a two way street and you need to make an effort to understand their culture, as well as them understanding yours.
So, how do you decide? First you should look at your project.
The more complicated it is, the more beneficial it is to remain closer to home. Communication is helped by modern techniques such as Skype and video conferencing, but the language barrier can cause issues when dealing with complicated plans.
Offshore is seen as being more risky and complex, and is often picked on price but as we all know, cheaper is not always the best choice.
Offshore companies tend to have greater flexibility with applying resources to a project quickly; this is due to their low labour costs. This means they can get the ball rolling quickly, whereas onshore companies take a bit longer to get to work on a project. This is because they hire teams for specific new projects, which actually means can create more targeted and efficient teams.
We (Headforwards)are a software outsourcing company based in the UK so we are normally referred to as an onshore company, however we have worked with people in Europe and as far afield as Japan.
This global experience has enabled us to craft a firm understanding of outsourcing, including the potential pit falls. Our industry knowledge helps us to forge excellent client communication skills and is enabling us to continue to deliver effective software, efficiently.
If you would like to know more about the work we do, and if we could help you please contact us.