IT-Outsourcing (Onshore, Nearshore, Offshore)

What is meant by onshore, nearshore and offshore. Advantages and disadvantages briefly explained

Everyone has heard of offshore outsourcing, but what does it really mean? And why should you care about it?

In recent years, the trend in the software industry has been toward offshore outsourcing. There are many reasons for this. Starting from lower labor wages, a lack of capacity in the own country and industry or the lack of knowhow, can be a reason for a company to decide to outsource development services.

Overview

What is Offshore-Outsourcing?

Offshore outsourcing is a process in which a company outsources part of its activities to other countries. Especially in the area of software development, this is very easy nowadays.

Partial projects or even entire IT projects are outsourced to countries such as India, Ukraine or even Russia. These countries often have

cheap manpower
a good infrastructure
English speaking contact persons
good academic education

However, the trend is slowly shifting towards the other two options , onshore and nearshore outsourcing.

What is Onshore-Outsourcing?

Onshore outsourcing is basically the same as offshore outsourcing.

The only difference is that a company does not outsource the activities to a country like India, but to another company located in the same country. This company may be located in the same city or state as the original company.

Onshore outsourcing is the most common outsourcing model because it has many advantages. Starting from the language barriers, to the same legislation and the current increasingly stringent data protection regulations.

Many companies avoid offshore and nearshore outsourcing outside the EU for these reasons.