Comparing Onshore, Offshore, Nearshore, and Hybrid Outsourcing

So you’ve decided to outsource your software development. Great choice! When it comes to building or upgrading software for your company, nothing is more important than having the right resources and personnel for the job. Outsourced development gives you just that and lets you retain budget and hiring flexibility.

There are four different approaches to outsourced software development: nearshore, offshore, onshore, and the hybrid model.

Below, we break down the key differences and advantages to each so you can confidently choose the right approach for your needs.

Onshore, offshore, nearshore, and hybrid: What’s the difference?

Before we get into the advantages of each outsourcing option, let’s first cover what they mean:

• Onshore means outsourcing development to a partner in your same country.
• Offshore is when you hire a development partner from another country with a very different time zone.
• Nearshore is similar to offshore, with the key difference being that your outsourcing partner resides in a neighboring country with the same or similar time zone.
• Hybrid outsourcing marries onshore and offshore by managing development locally but contracting off- or nearshore developers for the bulk of the work.

Now that we’ve better defined your choices, let’s look at some key advantages of each.

Advantages of Onshore Development

1. Communication. The most obvious advantage to onshore development partners is communication. Working with developers who speak English as their native language enables more efficient conversations.
2. Time Zone. In addition to the obvious advantage of smoother communication, onshoring partners you with developers in your same time zone. This is especially meaningful when frequent back-and-forth collaboration is needed on a project.
3. Cultural Norms. Onshore outsourcing simplifies the alignment of cultural work norms and enhances contextual understanding of some client products.

Advantages of Offshore Development

1. Rates. Favorable rates remain the biggest reason U.S. companies turn to offshore development, where rates remain significantly lower than those in the States.
2. Talent Pool. Tapping into the global talent pool allows you to shop for the best rates and find a partner with experience in your industry or the specific technology your business needs.
3. Long-term Maintenance. Hiring in-house devs to maintain software falls outside the budget for most companies. Outsourcing regular app maintenance offshore means your software stays up-to-date without overpaying.

Advantages of Nearshore Development

1. Time Zone. Nearshore development mirrors US time zones, making communication and collaboration in real-time easier.
2. Better Rates. High-quality near-shore developers are available at lower rates than in the US.
3. Travel. While more difficult than doing a site visit to an onshore partner, visiting the home country of your nearshore development team is less complicated than traveling to Asia or Eastern Europe.

The Hybrid Model

For companies wanting the best of two worlds, the hybrid approach exists, combining onshore management with off- or nearshore developers. What does the hybrid model do for businesses looking to outsource development?

1. Ensures Top Quality. The hybrid model capitalizes on global offshore development talent, sourcing specialized devs depending on project requirements and having local tech experts vet each to ensure the highest level of quality.
2. Cuts Communication Barriers. Instead of communicating with developers on the other side of the world, the hybrid model brings daily communication closer to home by managing projects from the States. This means you still get the most competitive offshore rates, without stressing about things getting lost in translation or falling off the radar between time zones.
3. Offers Flexibility. Whether you’re building a complex, proprietary application from scratch, updating your business’s software, or contracting help with long-term maintenance of existing apps, hybrid outsourcing gives you flexibility in team composition and sizing to fit your needs and budget.
4. Builds Relationships. Local project management means a local point of contact for in-person meetings or site visits; both of which are important for fostering trust and understanding between you and your business’s outsourced tech arm.

Which option is right for you?

Choosing the right ‘shore’ depends entirely on your unique software needs. For some, onshore development might be the perfect fit; while for others, nearshoring is ideal. Use this article as a jumping-off point for determining which option best fits your business. As you have additional questions or are looking for more resources, reach out to us. We’re here to help.

About Tech9

Tech9 believes in happy software experiences. We want you to find the perfect development partner, whether that be us or another company better suited to your needs. To learn more about how Tech9 helps our clients to ‘Tech Happily’, visit our #TechHappily page.

Tech9 employs over 100 top tier software developers from the United States, Eastern Europe, Central America, and India; distinguishing itself from other software companies by:

1. Curating top development talent in multiple countries
2. Building and retaining high-performing remote teams
3. Delivering cost-effective quality
4. Creating long-term successful partnerships with clients

Tech9 successfully delivers “Cloud-9” level happiness to every client. You’ll be happy with the development experience, happy with the quality, and happy with the positive impact on your business. That’s #TechHappily.