Nearshore, Onshore OR Offshore services?
By: Hexis Technology Hub
Tags: Benefits, Information Technology, Outsourcing, Offshore Development, Nearshore

In the business world it is possible to see an urgent need for digital implementation and evolution, which makes major investment decisions more complex. Addressing the IT world in particular, there is a pressure on these organizations to access the best profiles and talent, with an exponential increase in demand for high quality software engineers, surpassing the current market supply.

Due to this incessant demand, there was the need to create and develop different software development solutions, which allow organizations of any kind of industry, access to the technological innovation needed for their products/services. But what will be the best solution for your company? Outsourcing, Offshore or Nearshore ?

Companies tend to prefer the Nearshore model because it is a new, high impact approach to remote software development. Our experience here at Hexis Technology Hub as a partner is that we can offer the best talent combined with a visible reduction in fixed costs.

But let’s go by parts:

What is the difference between Offshore, Onshore and Nearshore in IT outsourcing?

In the difficulty of a recruitment process for a developer, there are other options to consider to build a software development team. Time wasted, too much money invested, or accumulated stress will not be a problem if you choose to outsource software development. There are different models, each with its own benefits and downsides:

Onshore outsourcing: practice of hiring services to help your company from the same country. Onshore outsourcing is the model that will be closest to your headquarters, bringing advantages of short distance travel and working with a qualified software engineer in your own country. However, this option will bring higher cost ranges due to the common unavailability of profiles and high maintenance when these developers do not have projects assigned.

practice of hiring services to help your company from the same country. Onshore outsourcing is the model that will be closest to your headquarters, bringing advantages of short distance travel and working with a qualified software engineer in your own country. However, this option will bring higher cost ranges due to the common unavailability of profiles and high maintenance when these developers do not have projects assigned. Offshore outsourcing: practice of contracting services located anywhere in the world, usually referring to countries like India, China, Ukraine or Poland. Although the cost of work is low, there are some drawbacks such as different time zones and language barriers that make communication extremely difficult, and cultural differences can easily increase costs. In practice, there may also be problems with trade laws, intellectual property and data protection due to differences in management and country policy. However, if reduced costs are the company’s immediate priority, this model may be the best option.

What is Nearshore Outsourcing?

By definition, Nearshore Outsourcing is the practice of service/product development by experts in similar time zones and geographic proximity. The Nearshore model provides cost-effective access to the most advanced and modern technologies as well as the agility to increase software production capabilities while maintaining or even reducing business costs. With effective communication, daily meetings, more frequent visits to the remote teams and access to cost-effective rate cards, organizations have the opportunity to solve their IT problems.

For our European clients, the benefits of Nearshore compared to Offshoring is the close relationship between their country and Portugal, as for example clients from the UK choose Portugal (GMT+0) due to the same time zone and cultural compatibility.

Is Nearshore a way to outsource software development?

In a way, yes, but the model offers more than just outsourcing. IT outsourcing is the use of external service providers to effectively deliver business processes, application services and IT infrastructure solutions. The benefits of Nearshoring go far beyond technology outsourcing: we help clients develop the right strategies and vision, structure the best possible contracts, and manage business for sustainable win-win relationships with external vendors.

Nearshoring can enable companies to reduce costs, accelerate time to market, and take advantage of external expertise, assets and/or intellectual property.

Which companies use the Nearshore model?

Hexis, from Lisbon, has helped clients across Europe to solve their complex digital problems by taking on the full technological side of their projects and delivering custom software solutions. Recently, we have had the opportunity to:

Partnering with global FMCG brands based in Germany, in order to get a vision of their customers’ behavior and add a competitive advantage to their products with IoT, Big Data and AI ;

based in Germany, in order to get a vision of their customers’ behavior and add a competitive advantage to their products with ; We support British Fintech and Blockchain companies with applications and MVPs in the gaming, retail and education markets

companies with applications and in the gaming, retail and education markets Partnerships with dedicated team extensions remotely controlled by the client, working with internal developers, with vision aligned and commitment to project and client objectives, such as online retail giants, in order to enable regular software innovation.

remotely controlled by the client, working with internal developers, with vision aligned and commitment to project and client objectives, such as online retail giants, in order to enable regular software innovation. Providing advice, with new perspectives and ideas to our clients, such as start-ups from all kinds of industries, to incubate new ideas in our technology center that drive digital disruption for market change and transformation.

But does traditional offshoring lead to cheaper and faster software?

We know that the offshore model can be an attractive option due to the low cost, scalability of the teams with flexibility that can generate benefits to the end customer. However, the main problem with most offshore IT is the low commitment and lack of motivation of staff: with a high turnover, the exit of staff from projects leads to team instability and loss of knowledge and work already done. The compound effect of these issues has a negative impact on projects in terms of time and money.

However, as a Portuguese company, Hexis is culturally aligned with our European clients, ensuring high quality software from autonomous and reliable teams. We address all the shortcomings of the traditional offshore IT outsourcing model, and share the same time zone that supports regular communication and relationship with our clients. They have full confidence in our work and gaining their trust is the key to our relationships.

Conclusion

Nearshore development offers a mix of onshore and offshore benefits: it lowers fixed costs while still providing you with some of the advantages of onshore outsourcing, such as regular communication during working hours. In price, rates cards tend to be higher than offshore rates, but you will save money again through more efficient communication and lower travel costs.

However, before you begin to consider hiring a software development company, you must first determine your priorities: high quality profiles, the best price, more cultural security, or a mix of everything?

At the end, we can ensure that at Hexis we not only facilitate a rapid and sustainable increase in the scale of the engineering teams but also ensure a knowledge management team that guarantees the security of our clients’ intellectual property.