Let’s start with the numbers outlining outsourcing statistics. What do they say?
As reported by Statista, the global outsourcing market was worth $92.5 billion in 2019. Statistics show that, in fact, the market size of the outsourcing industry in the US in 2020 is $132.9 billion and it is going to grow by 1.6% the same year.
What does that number tell us? It tells us that this is a monster industry and that companies are not scared to move projects and of course entire departments to other countries.
Finding quality professionals in some of the most advanced countries isn’t easy and that pleasure comes at a price. This is the reason why outsourcing of software development is growing and will continue to do so.
For any IT business that has finally decided to go down the IT outsourcing route, the next question that pops up is whether one should go for Nearshore, Offshore or Onshore Software development. While there are many options to consider, quality versus cost is the most viable calculation in the process of elimination and it would be remiss of me to say it isn’t the most important.
But what else should one consider as a possible swing factor when considering Nearshore, Offshore and Onshore options. Let’s look at a few game changing factors before diving into what each of these actual means and then look at a few of the main advantages each offers.
Project Efficiency – On time and on budget service. Would you order a product on Amazon without reading the reviews? Websites with reviews and testimonials on developers are more appealing to the clients. A simple click and search could mean the difference between getting a project finished on time or not. It goes without saying, any project is as good as it’s skilled workers. And in IT, there is nowhere to hide. To find out more about a possible hires coding ability, make sure you check websites like LinkedIn and GitHub to verify profiles.
Even though North Macedonia is a small country with a population of only 2 million you can find a lot of talented and motivated professionals here. As a country located in the heart of the Balkan peninsula, North Macedonia benefits from a strategic geographical position at the crossroads of two main European transport corridors linking Central Europe to the Aegean and the Black Sea.The country has two airports, one in Skopje and other in Ohrid, and it is a 2-hour flight away from most of the European cities. Furthermore, Skopje is just a 2-hour drive from Thessaloniki, which is the main port hub for the Balkans and Southeast Europe and connects Europe with Asia and China.
The number of new startups in 2017 alone is 6.321 and the number of IT companies operating in Macedonia in 2017 was 801. Numbers show that the country possesses motivated and talented professionals who are not afraid to explore, take risks and work hard.
Getting back to basics, lets considering Nearshore, Offshore and Onshore outsourcing. Which one works best for you, what do these terms actually mean, and what are some of the main advantages each offers.
Nearshore Outsourcing 101
As the name suggests, in simple terms, nearshore means outsourcing to a location not too far from your current location. This may be, for example, a neighboring country or a location not considered too far away. For example, it’s not unpopular for businesses across Europe to outsource to North Macedonia.
Communication – The close proximity means that travelling for face to face meetings isn’t a problem and of course arranging video meetings are easy as time zones are no more than a couple hours apart. You’d expect a language not to be an issue and especially for UK companies nearshoring outsourcing in Europe, English shouldn’t be an issue, and so miscommunication is not a problem
Work ethics – With nearshoring, you would imagine that your neighbouring countries have a not too dissimilar work ethic. Culturally you should be on the same page and you should not have many problems getting your project desires across.
Value for Money – I’ll use Switzerland to North Macedonia example once more for value for money. The difference between wages between programmers in these two countries is vast. Nearshore outsourcing opens up the door to such a wide array of talented, highly skilled developers, much like in your own country at much lower costs.
Offshore Outsourcing 101
At the other end of the scales, offshore outsourcing means you go one step more and look at possibilities much further away in different continents. For this example, we could have a company in the Switzerland outsourcing to India.
Communication – One of the biggest drawbacks of offshore outsourcing is the communication. You could be facing a long-haul flight at great expense and having a video meeting would mean one party being up extremely early or very late. There may be only a general knowledge or understanding of English, but if it isn’t proficient, you could find delays creeping in as work needs to be tweaked, redone or adjusted because of miscommunication.
Work ethics – You’ll have access to a massive pool of skilled programmers. Of course, a little more research is needed but using the right tools, you can find some really exception employees.
Value for Money – Offshore outsourcing gives you the chance to really hunt around for the biggest cost reductions and financial saving.
Onshore Outsourcing 101
Onshore basically means on the same shore so this would be outsourcing domestically. This may mean people could be working in the same country or even in the same city.
Communication – it couldn’t be easier. Time zones match, languages match and even the city could match. A face to face meeting could be no longer than a taxi ride away. Interviewing becomes an easy process, and this could be done by you in person.
Work ethics – It’s like for like here. You know what to expect from the developers you work with. It makes for a smooth transition across the board.
Value for Money – You wouldn’t actually make any savings in term of hiring staff, which is a main reason for outsourcing, but that closeness does makes other areas much smoother.
The Bottom Line
The world is getting smaller and the implementation of video conferences is getting better as the general direction of things tends to be a remote IT world. It also tells us that outsourcing cost reduction is a must, and it should be considered a business growth tool in a way. More and more household companies have already started outsourcing and moving further and further afield in search of that fabled quality to price ratio.
If you are on the outsourcing fence, just remember this. There will be a re-adjustment in the not too distant future, as IT incomes in less developed countries continue to spike. For now, there is a large price gap that calls out for businesses to take advantage of it. Which type of Nearshore, Offshore or Onshore software development operates is the only issue you should consider best for you.