Offshoring vs. Nearshoring - trends for outsourcing in 2021 and beyond

If you are not familiar with these terms, then in short, they refer to the practice of outsourcing teams to other countries.

What are the reasons to do that?

Well, there are quite a few, and let’s be real, it all starts with Cost Efficiency! First thought? Offshore!

But lately, companies have started looking at other things besides only costs.

So when you top cost efficiency with access to specialised talent, same time zone and similar culture, good English skills, and good quality, then you have the argument for which nearshoring is now overtaking offshoring. And with good reason.

For the past years, we have seen a small transition from offshoring to nearshoring, and we think that in 2021 and beyond, we will continue to see a massive shift towards Nearshore.

High Quality and Cost Efficiency

Very often, the biggest drawback of hiring an offshore team is quality. More and more companies realise that their offshore teams might be cheaper (usually because they are providing junior level candidates for senior jobs). Still, they are not delivering at the desired standard, and they can lose a lot of trust from their customers. And a lot of money and time, if they have to re-do some parts of the work. 

With Nearshore, companies get cost efficiency and high quality at the same time. Why? Because all the processes (including selecting the right candidates) are very transparent and involve the customers from the beginning.

The real value: people!

Another bonus point is that Nearshore Outsourcing companies take people development very seriously, and they want to hire and RETAIN top talent. This means that the customer does not have to worry about HR, attrition, people, or functional management. These outsourcing companies will handle that!

Are we talking about Specialised Software Development teams?

Specialists over generalists?

To meet the needs of niche markets, software development teams are starting to get specialised and develop their capabilities to meet the specific needs of different sectors.

It is true that we have seen a specialisation trend in the last few years too, from mobile to web or desktop applications, front-end to back-end, but now they are going to a whole new level, approaching specialisation at a more molecular level.

The “divas” of the IT industry right now, Artificial Intelligence, IoT, Cloud Services, and Machine Learning, are catching a lot of attention as Digital transformation picks up speed. 

For sure that competition will grow in this now continuously globalised market, which will make specialists succeed more than generalists. Finding a niche and focusing on it will become the new trend for many if they want to remain relevant for this fast-evolving market.

As the industry evolves, nearshore software development will only grow into the future as there is an increased demand for quality niche development skills. 

From provider to long term partner

Nearshore outsourcing companies will not be only seen as a provider of services. As they ensure access to a big pool of talent, self organising teams build in a way so that they can provide smooth cooperation, these companies will from now on be seen as trusted partners that offer a wide variety of services and not anymore as just simple providers.  

A reliable nearshore partner is the key to achieving your long-term goals!

Did you already choose one?