With the rapid transition to remote work, many companies have started to explore outsourcing parts of their software development to 3rd party teams. Although outsourcing can be extremely beneficial to many companies, finding the right IT partner remains a big challenge. The majority of companies look towards two types of IT partners: nearshore IT partners and offshore IT partners. Selecting the right type of partner will have a tremendous impact on the quality of product development.
What is nearshore IT?
Nearshore IT is outsourcing IT projects to countries within the same region as the parent company. Companies have preferred using nearshore IT companies to reduce costs while maintaining a similar quality of product development. For example, a company in the U.S. outsourcing to a company in Mexico would be an example of nearshore IT.
Benefits of nearshore IT teams:
Time zones: One of the key value propositions of nearshore IT is the similar time zones between the American company and the nearshore company. Nearshore IT companies are usually located within the same time zone (give or take a few hours) as the parent company. This allows project coordination, meetings, and other work activities to go smoothly and during normal work periods.
Cost savings: Nearshore IT companies can perform the IT operations at the quality of American teams without the same costs. Companies located in the U.S. have much higher overhead such as salaries and other resources. Nearshore companies pass on the cost savings to the U.S. team that they work with.
Language barrier: Communication is not an issue when working with a nearshore IT team, nearshore teams speak fluent English. Many nearshore IT companies have an American headquarters location and companies can visit them if needed. When completing time-intensive projects, having a language barrier is simply not an option for most companies.
Nearshore IT vs Offshore IT:
The main alternative to nearshore IT teams is using offshore IT teams. Offshore IT teams are often located very far from the headquarters of the company outsourcing the services. Some of the main differences between nearshore and offshore IT development include:
Cost: Offshore IT companies are located all over the world, and many are in 3rd world countries. This results in offshore IT companies offering services at very low rates. Nearshore IT teams are cheaper than U.S. based companies, but not as cheap as offshore IT companies.
Quality of work: Generally, nearshore IT teams have a much higher quality of work. They have experienced IT staff that have worked with U.S. based companies for years. Offshore IT teams may require you to do revisions on some projects due to differences in quality of development.
Ease of collaboration: Nearshore IT teams are much easier to work with because they are in the same time zone and can speak English well. It may take 12-24 hours for offshore IT teams to respond to a request from a company and this doesn’t account for any language barriers.
To learn more about how nearshore IT teams can help meet your business goals, talk to an expert here.