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August 22, 2019

Defining Onshore, Nearshore & Offshore Software Development

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Software development today is one of the highest-paid and sought-after positions. LinkedIn, for instance, lists software development related to its top two most desired positions. Companies ranging from startups to major enterprises like Apple and Google regularly compete for the top talent and even poach developers from competitors. However, because of the globalized world of today, workforces are no longer tied to a company’s headquarters. Companies can hire software developers from all over the world and remote teams to alleviate costs and find top talent.

This is where different outsourcing options — including offshore development,  onshore development, and nearshore development — come in. Each has its benefits and drawbacks. 

Onshore Development

Onshore development refers to companies hiring developers or teams located within the same geographical region or country and time zone. Think of posting an ad in your local paper or on LinkedIn looking for developers that will be working in your in-house office. It could also be someone tapping into your company meetings remotely, but who lives in the same time zone and country as you. 

Offshore Development

Offshore development refers to hiring developers in far regions of the world located in different time zones. This form of recruitment deals with more inexpensive costs, but often also language barriers, cultural barriers and weak collaboration due to schedules differing by time zones.

Nearshore Development

Nearshore development refers to companies outsourcing development to nearby geographical zones, such as countries within your continent, and closer or same time zones. An example of this would be a company headquartered in West Coast U.S. while its developers are working remotely from Canada or Mexico. 

Outsourcing Models in Detail

For startups and companies on a tight budget, offshore development makes the most sense. This is particularly the case if the company either has no office and operates remotely or if it has less of a formal structure where meetings and in-person collaboration are less common. By hiring staff from abroad, companies can find talent that may be missing from their area of operation. They can outsource their workloads to overseas developers while their workforce focuses on other tasks in-house. Think of it this way: the startup can focus on the key aspects of the program and offload some work to remote teams in their time zones while they come back to work next morning to see it completed. 

Hiring onshore developers may make the most sense for larger companies and enterprises that rely on many in-house meetings. Such enterprises often need every step of a project discussed in-house or at least collaboratively and approved before going forward. In this case, onshore development makes the most sense because everyone can quickly come to a meeting or at least log in remotely without the hassle of a team member being asleep during such times. It also eliminates the drawbacks of potential language or cultural barriers.

To get the benefits of both of the above-mentioned paradigms, consider nearshore development. This method relies on outsourcing workers in a similar geographical time zone, thus collaboration and communication become easier. It implies shorter travel spans for meetings if they need to be conducted in-house and efficient collaboration.

The combination of effective remote collaboration with cost savings are major reasons for choosing nearshore development. If your company relies on collaborative software such as Google’s G-Suite then working within the same timezone is a major plus. Oftentimes, there is also a lack of talent within a company’s geographical region or city and the real talent may be available abroad without having to hire full-time in-house employees. 

Conclusion

Each outsourcing method has its benefits and drawbacks. However, nearshore development can be a great place to start. It allows companies to be efficient at various organizational levels. Finding the right talent locally is often tough. 

Today’s workforces are becoming global in nature and teams are collaborating from across the world on a wide array of projects. However, some companies have more efficient practices and teams that can collaborate, communicate and work together more effectively than others. It is wise knowing the type of company you are running inside and out in order to choose the right approach for your needs.


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Malcom is a tech expert specializing in the software outsourcing industry. He has access to the latest market news and has a keen eye for innovation and what's next for technology businesses.

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