The outsourcing world has reached new heights as more and more tech companies from the US regularly outsource IT projects and hire remote developers. This is due to how outsourcing, which was once considered a novel approach to corporate tasks, has now transformed into an entire industry; this is evident by the statistic that global outsourcing is estimated to reach a staggering value of $731 billion by 2023.
The IT and software development sector has been highly involved with the outsourcing industry, as almost 72% of the global outsourcing contract value is due to IT services. Judging from this, it’s no surprise that out of the $92.5 billion worth of outsourcing contracts in the world, IT services amount to $66.5 billion.
In terms of outsourcing development projects, tech companies have prominently started to favor Nearshore and Offshore development due to the massive benefits they provide. But what are Nearshore and Offshore development? We’re here to answer this question so you can make the best choice for your outsourcing needs.
Nearshore Software Development
Nearshore development is an outsourcing technique where companies look to outsource their software development projects to teams based in regions or countries that are adjacent and geographically near their own. For example, a tech company in the US can thus outsource development projects to remote development teams that reside in Latin American countries such as Mexico, Argentina, or Brazil through nearshore development.
Nearshore Software Development Benefits
Improves Company Efficiency
The overall efficiency of tech companies is enhanced massively through nearshore development as they can focus on more pressing matters within the business. This form of outsourcing can grant tech companies the time and resources needed to streamline their internal operations. The need for optimization within tech businesses has grown to such an extent that it has been considered the prime reason for the subsequent growth of the global IT outsourcing market in 2022.
Greater Access and Control
In nearshore development, the tech company gains the advantage of being geographically near the remote teams to which they have outsourced the development projects. This means it’s fairly easier to communicate and connect with these teams, allowing them to control and instruct these times promptly.
This greater level of accessibility can be fueled by either communication technologies or by taking a short flight for a face-to-face meeting.
Communication and understanding are vital factors that influence collaboration between tech companies and remote teams. Nearshore development ensures that the remote teams collaborating with tech companies share similar cultures and languages.
This diminishes any linguistic barriers and results in a clear understanding and communication of directions, allowing project objectives to be recognized and achieved by the team.
Offshore Software Development
The concept of offshore development is what tech companies generally refer to as outsourcing in a global context. It’s clear from this fact that offshore development refers to when tech companies outsource their software development projects to remote teams located in far-off regions and countries as opposed to the neighboring regions and countries in the case of nearshore development.
This form of outsourcing provides relevant benefits and allows tech companies to connect and collaborate with distant remote teams through communication technology and remote management tools.
Offshore Software Development Benefits
Global Talent Pool
Offshore software development enables tech companies to access an extensive pool of talent which means a greater number of options to choose from, which can mean selecting the best remote development team from the bunch.
The global talent pool also comprises highly experienced remote development teams that can meet the custom needs of tech companies more appropriately due to their enhanced understanding and problem-solving abilities.
Offshore software development involves tech companies hiring experienced remote teams and employees that can provide a greater level of insight regarding software development projects.
This means that these remote teams can bring about enhancements in the final software products mainly due to how they’re able to think and work independently with the use of relevant development tools and skills, as well as how they can provide suitable changes and logical solutions. This enhances the quality and increases the speed at which goals are achieved.
With the help of offshore software development, tech companies can connect with remote teams worldwide. These remote teams act as extensions of these tech businesses, which effectively widens the network of the business on an international scale.
This enables tech companies to grow in terms of business opportunities and brand awareness and also improves the collaborative ability of the companies, which can ensue in similar offshore software development outsourcing events in the future.
Which One to Choose?
With such benefits, the task of selecting either one of these remote outsourcing methods can become quite challenging. On the surface, they both may be quite intriguing for tech companies, but taking a closer look, we can say that offshore software development is comparatively more effective for a number of viable reasons. To better understand this selection of ours, the comparative benefits achieved through offshore software development are listed as follows.
- A much wider selection of talent can be gained from the global talent pool rather than just the talent pools of neighboring regions.
- Offshore software development is cost-effective as remote software development teams in areas such as Europe can prove less costly compared to remote teams in areas close to the US.
- With offshore software development, the remote teams gained can bring about a greater level of diversity to tech companies, resulting in innovative and creative minds linking together to improve software development projects.
With a clear understanding of offshore and nearshore software development, tech companies can take advantage of their distinct benefits to maintain their profitability and success. In the time being, both these approaches of remote outsourcing are being adopted by tech companies at a rapid rate.
Companies will often take the aid of remote staffing agencies to facilitate software development outsourcing; an agency that shines above the rest in this domain is Aspired.