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Understanding Offshoring and Nearshoring

Before making a decision, it’s essential for U.S. businesses to comprehend the distinctions between offshoring and nearshoring. Explore the nuances of outsourcing work to distant countries, such as India and Japan (Offshore Software Development), versus choosing nearby countries like Mexico and Puerto Rico (Nearshore Software Development) with a specific emphasis on how these models align with U.S. business requirements.

The pros and cons of outsourcing models

We’ve talked about nearshoring before, but how different is it from offshoring? Between both, which would better suit your IT projects, Offshoring vs Nearshoring? Learn more before choosing the right outsourcing model for your development services.

Outsourcing has been a great growth opportunity for businesses for a few decades now. Seeking to cut costs, large manufacturing companies have been moving operations offshore since the early 1970s. Later on, with the arrival of the internet and tech companies, industries searched for companies overseas with the intent of outsourcing projects and the desire to expand their teams.

Offshore Software Development is the process of outsourcing work to distant countries. Some offshoring options would be countries like India and Japan. Nearshore Software Development is the process of outsourcing work to close-by countries, examples of this being: Mexico and Puerto Rico.

Adapting to Change: Outsourcing in the Era of COVID

Once COVID-19 hit in 2020, industries were impacted by unprecedented obstacles and had to figure out a way to work around them. Everything was hurt, from supply chains to companies’ workflow. The companies best equipped continued on their path towards digital transformation, whereas those not equipped, struggled to keep up. But, prepared and unprepared industries alike were able to turn to outsourcing for a range of things. For example, some searched for the right provider to manufacture their projects.

Nowadays, businesses everywhere continue to evolve by partnering with development teams located outside the U.S., but they are increasingly looking for better ways to outsource. Enter: nearshoring.

Benefits of neashoring

There are additional benefits to outsourcing with nearshore providers versus outsourcing with offshoring providers. U.S. companies search for the right outsourcing partner for potential cost savings. This is one of the main reasons to do so. Nearshoring provides the attractive prices that are also available when offshoring, but they have the advantage of being in a similar time zone which makes for better collaboration. There are additional benefits to outsourcing with nearshore providers versus outsourcing with offshoring providersU.S. companies search for the right outsourcing partner for potential cost savings. This is one of the main reasons to do so. Nearshoring provides the attractive prices that are also available when offshoring, but they have the advantage of being in a similar time zone which makes for better collaboration.

While both Offshoring vs Nearshoring teams are used to remote work, the nearshore teams’ ability to work during similar hours as your team facilitates real-time communication across groups. This means that any issues that arise may be addressed immediately.

Additionally, nearshore developers can help address the labor shortage by expanding your team with skilled teammates that are ready to go and are experts in the methodologies and workflows you’re already familiar with. Unlike offshore teams, the cultural barriers tend to be few when partnering with a nearshore team and this allows for better and easier collaboration and communication. Nearshore developers are proficient in the English language, and up to date on U.S. current events and pop culture.

Ready to take a decision?

Unsure which outsourcing model is the right fit? Consider your company goals and narrow down which model would better support your companies’ journey toward digital transformation. Partnering with the right shore development team can reduce and eliminate many challenges that have arisen in the wake of the COVID-19 crisis.

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