What is the difference between Offshoring and Nearshoring
Both are offspring of outsourcing which is a business practice whereas a company hires a third party to perform certain business processes for them.
The terms are self-explanatory, offshoring is choosing a third party who is geographically far away from the company, often in different time zones, nearshoring implies hiring third parties who are in a nearby country to develop projects.
Advantages of Nearshoring
In recent years nearshoring has become a more prevalent option especially for information technology (IT) projects, because of the many advantages it offers which include:
Outsourcing projects to nearby countries means, there is little or no difference in time zones, this makes communication easier and diminishes response delays.
The country where you decide to outsource your business processes might not be an English-speaking country, but, the closer it is, the greater the chances that there will be little to no language barrier. As an example, in countries like Costa Rica most IT engineers, and developers are bilingual essentially eliminating any language barrier that is a common drawback of offshoring.
Reduced Cultural Gap
The further away a country is the more likely it is that their culture and customs are significantly different to what the hiring company is used to, to overcome this a learning curve must be implemented, this may slow down the project and create unnecessary confusion and conflict. Nearshoring virtually eliminates this cultural gap, which in turn improves project management efforts.
While costs could be higher than those associated with offshoring, companies can still save a considerable amount of money and substantial gains on other fronts. And the cost of nearshoring is sure to be lower than the investment required to build an in-house team.
Faster Problem Solving
Because both the in-house team and the nearshore team are working in the same or very similar time zones, response times improve, and issues can be resolved faster and more efficiently.
Quality of Work
One of the main reasons why companies are shying away from offshoring is because of the quality of work most were receiving.
Aside from the problems caused by being in different time zones, language and cultural barriers, a lot of the staff working on projects simply did not have the necessary qualifications, this created distractions, delays and compromised the integrity of the projects.
Nearshoring IT projects to Costa Rica where the education system is one of the best in Latin America means it is extremely unlikely that a reputable company will hire someone who does not possess the necessary skill sets.
Over the last decade, Costa Rica has become a hub for IT solutions for companies in the United States, Canada, and even the United Kingdom. Companies like Softon ITG have been providing web development, App development, and staff augmentation services for more than 10 years, making them one of the premium providers of IT solutions in the country.