Software Outsourcing - Nearshore Software, Just Right!
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Typically, software outsourcing is a subject on which we spend a significant amount of time with our customers.
A interesting conversation that we have is around the notion of where software outsourcing should take place - whether it should take place onshore, nearshore, or offshore - and where it should take place.
Specifically, we define onshore as occurring inside the same area, nearshore as occurring within the same continent, and offshore as occurring somewhere else.
Onshore is a fantastic solution because it gives you the opportunity to constantly work with a squad that is physically close to you, who are hired in your timezone, and who can communicate and relate to you simply and seamlessly.
Bringing your teams together in person to discuss organizational needs and ensure that everyone understands the scope of the project is also far more convenient.
The difficulty is that the pricing structure in which they operate is identical to or almost identical to the price structure in which your company works, and as a result, you are unable to take advantage of the possibly reduced cost structures connected with other locations.
Offshore work might be difficult, but when done right, it has several advantages.
The most significant of the benefits is likely to be your fee structure.
Offshoring is often hampered by management concerns, which are mostly based on communication issues.
However, another difficulty that is largely overlooked is the possibility for related risk when offshoring.
Based on talks we've had with a large number of clients about their unique software outsourcing in India, for example, it seems that there is a substantial turnover of people in that country.
This turnover, along with insufficient levels of security, might pose a threat to your IP.
Nearshore software outsourcing is an ideal complement since it allows you to benefit from lower prices (albeit not as low as offshore), but with the advantages of a nearby physical location, easy contact, and the same time zone as offshore software outsourcing.
Where should you direct your software outsourcing efforts?
- To begin, think about the nature of the task - the more complicated and / or "fuzzy" the job, the closer you want the team to be in terms of overall proximity.
- Consider nearshore or onshore development if you're producing something new that will evolve from the initial needs, or if you need the software team to have a deep understanding for the organization so that they can model all of your operations accurately for the firm's benefit.
- If your firm is engaged in large-scale, securely specified software development, offshore development may help to keep costs down for the organization.
- Consider the company's total size and reputation as a result of this consideration.
- In many situations, larger organizations such as IBM, Google, and Microsoft are able to keep their employees in India far better than smaller ones.
- Finally, determine the real cost of outsourcing the software development project to another country.
- Offshore software development, as opposed to Nearshore software development or Onshore software development outsourcing, tends to have large hidden costs associated with properly managing the crews in order to get a high-quality outcome.
- Finally, I once attempted to estimate the cost of a software outsourcing project using onshore, nearshore, and offshore organizations.
- Although the onshore and nearshore teams utilized employees who were two times the price of offshore teams, they also provided a fixed rate cost on the task that was approximately half the amount of hours spent in comparison to offshore teams.
- Due to these considerations, the overall cost was roughly same onshore or offshore, and the potential danger looked to be lower.