Nearshore versus offshore software development 

Software Development

3 min read

Outsourcing custom software development is standard practice across all industries. Whenever a business is looking for a software development partner, the first consideration is whether to choose offshore or nearshore software developers. Both options have pros and cons, so it is worth thinking carefully about your needs and budget before making a decision. Let’s take a closer look at each of the options, and their potential advantages and disadvantages. 

Nearshore software development pros 

Nearshore software development is the practice of choosing a developer located in the same or similar time zone as the client. The benefits of this option are: 

  • Cost efficiency: While the labor costs involved with nearshoring are sometimes higher than those associated with farshoring, these are often mitigated by reductions in other areas, such as travel expenses. 
  • Operational efficiency: Shorter distances between the client and the software contractor make a more efficient and collaborative working environment.  In conclusion, cutting down communication obstacles  prevents missing deadlines, budget excesses, and other complications 
  • Effective communication: Working with nearshore teams means you don’t have to wait for hours before receiving a response to a query; or wake up at 1 in the morning to attend a Teams meeting. Workflows are more streamlined, faster, and more efficient. 
  • More influence and control: Shared borders, common language and closer time zones make nearshoring much easier to manage. You can maintain full control of the project with many of the same benefits of onshoring, but at a lower cost. 

Nearshore software development cons

There are two significant cons to think about when considering nearshore software development. Firstly, although the costs are lower than they would be if you chose onshore vendors, they are likely to be significantly higher than those presented by offshore service providers. You need to ensure that your chosen partner will offer sufficient benefits in other areas to justify the higher price. Good work quality and the improved efficiency of offshore work can easily justify these costs, if you choose the right vendor. 

Secondly, when looking for nearshore partners, you will find that your choices are somewhat limited compared to offshore. With a smaller talent pool, you may have some difficulties finding available professionals for your project. 

Offshore software development pros

If you choose offshore software development partners, you have access to the following benefits: 

  • Cost savings: Service providers in destinations such as India, Russia, Ukraine, China, or the Philippines can offer their services at a much lower rate than those located in the Americas. This is often the biggest consideration for U.S. companies that are budget conscious. 
  • Global talent pool: Looking offshore opens you up to a vast talent pool of software developers from all over the world.  
  • Rotating shifts: Offshore developers can work whenever their clients need them to. Most importantly, you can have the benefit of knowing that your software project is advancing while you sleep.  

Offshore software development cons 

Despite all these benefits, offshore development comes with a few potential drawbacks. While the time zone differences offer the flexibility and rotating shifts mentioned above, they can also be a barrier to efficient development and delivery. Ten to fourteen hours’ time differences affect the frequency and quality of meetings and can affect the quality of project deliverables.  

Speaking of quality, given the distance, it is more difficult to assess and verify the capability of service providers. You could very easily select a development partner based on low rates and a good sales pitch, only to find that their team is inexperienced and their processes suboptimal. Cultural barriers can also make it more challenging to drive a project forward at a satisfactory pace, jeopardizing both quality and delivery times. You would also have to take high travel costs into account. You may need to take fifteen hours flights to see your software vendor, meaning high costs and increased downtime. Since you will want to keep such trips to a minimum, face-to-face communication will be scarce, and there will be less of a personal touch. 

Giga IT is a reputable and experienced provider of nearshore custom software development for U.S. businesses. Contact us to see how we can partner with you on an efficient and successful software development project. 


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