More and more companies around the world are facing a lot of challenges during their growth and development. In these difficult moments, they are bound to make big decisions, such as how much to invest in developing certain projects.
A company’s financial priorities can determine whether those projects can be done by hiring an in-house team. Most of them will find this rather difficult and time-consuming. Costs aside, the whole process of finding, hiring and training the right people can take months. Plus, there’s always a risk of a bad person-organisation fit that resets the whole process.
Luckily, outsourcing IT services gives you the option to balance costs and quality in order to achieve your goals. We will take a closer look at what outsourcing means, its benefits and risks. Additionally, we'll explore nearshoring and offshoring in the software development industry and help you understand what's best for your company.
Outsourcing is the action or the decision to employ another company to develop or take on specific projects or tasks. For example, a healthcare provider needs to build a medical records tool. They could hire an entire development team, but this means allocating more time and money just for this project.
Instead, they decide to work with a software development company that already has experience creating digital healthcare solutions.
Outsourcing benefits include:
Of course, outsourcing can also have some downsides:
Another great advantage is that the IT partner can be located anywhere in the world and still do the job. Sure, you can outsource operations in the same country, also known as onshoring. Based on the provider's location outsourcing can also be divided into offshoring and nearshoring.
Offshoring is when a business outsources in another country, usually overseas. For instance, a company from Europe or the United States partners with a software development provider in India, China or The Philippines.
There are a fair amount of reasons why a company might decide to offshore projects:
There are also some potential risks involved with offshoring:
Oftentimes outsourcing is conflated with offshoring in today's complex and global labour market. However, it's not the only option that companies have. Nearshore software development is just as attractive and has the same or even more benefits.
Nearshore software development is the practice of outsourcing in neighbouring countries. Popular examples include Western and Eastern European partnerships, such as Germany and Romania.
In choosing so, they are still getting better prices than in their own country. But they're benefiting from a skilled talent pool with a similar culture.
Here are the main advantages of nearshoring:
And here are a few cons to consider:
In choosing so, nearshoring IT services means getting better prices than in your own country. But you’re also more likely to benefit from a skilled talent pool with a similar culture.
All in all, both outsourcing types solve the IT skills shortage problem. So, choosing between offshoring and nearshoring can be hard even if outsourcing is right for you.
Everyone wants a faster time-to-market, a great product and stellar collaboration. In reality, incompatibility will waste your time, resources and money, even moreso than choosing nearshoring over offshoring and vice versa.
Offshore and nearshore are relative. At Qubiz, we've worked with both Western European and US companies, which means that we don't like to have a label. However, here is a quick comparison to help you make the best decision for your situation.
With its vibrant Western-influenced culture, proximity to Western Europe and highly skilled specialists, Romania is one of the top destinations for nearshoring. However, it's also quickly advancing in the offshoring world, enjoying great collaborations with countries such as the US.
Qubiz is a one-stop-shop technology partner located in Romania. We cover the whole application lifecycle, including functional design and consulting, software architecture design, UX/UI design, software development, QA, and maintenance.
With more than 15 years of experience and many more successful collaborations, we have what it takes to support business transformation and continuity.
Learn more about what we do and how to contact us!