Browsing IT literature and visiting software development topics websites, we meet concepts such as: outsourcing, offshoring or nearshoring. They describe models of cooperation between companies. Let’s try to focus on those formulation and try to answer what is it all about. Firstly, we will explain the concept, than we will think about which cooperation option choose and why.
The word outsourcing comes from three English words: outside-resource-using, that is, the use of external resources to implement the company’s tasks. This is a very long definition, but the definition conveys the meaning of what outsourcing really is. In practice, regarding IT solutions, outsourcing means delegating some tasks related to the creation and maintenance of broadly understood IT to companies specializing in this type of activity. Thanks to this, the ordering company does not have to create and maintain its own IT (programming) resources. This is particularly important for companies, for which IT activities is not their core business.
Offshoring is a type of outsourcing, in which the company we work with is located outside our country. So this is a special kind of outsourcing in which we open ourselves to foreign companies. Offshoring is a type of outsourcing, where the company we work with is located in a geographically distant country. For European countries these will be Asian and Far Eastern countries like Pakistan, India, Bangladesh and China. Nearshoring is a type of outsourcing, where the company we work with is located in a geographically close country, very often bordering with our country. For companies from Western Europe and Scandinavia a natural choice is to cooperate with nearshoring partner (for example Poland).
Which cooperation model is optimal and which one to choose? The answer to this question depends on individual needs and expectations of the company. Below you can find a list of pros and cons of both models in the field of IT project implementation.
- Lower costs compared to nearshoring
- Big language barrier
- Inability to organize direct project meetings
- The need to provide efficient connections for video conferencing and to track work progress
- The need to define the scope of work well
- Different time zone
- Geographical proximity
- Similar cultural code
- No language barrier
- Easier work in the Agile
- Easy organization of face to face design meetings
- The same time zone
- Higher costs compared to offshoring
By analyzing the presented statement, it is easy to notice that if our only criterion which we use when choosing a company implementing IT projects is price, you should consider the offshore option, even if it requires more involvement on our part. In this variant you need to consider working with a company operating in a different time zone. This seemingly trifle can ultimately lead to many organizational problems. Additional trouble can be project team communication. English is a standard in the IT world, but level of its proficiency can vary significantly from country to country. In an extreme case, the above mentioned problems may paralyze the functionality of the best IT project. However, if we want to have a real impact on the emerging solution during its creation and easier control of work progress, than you should choose nearshore variant. By choosing nearshore, we can avoid the above mentioned problems. For sure, we will not experience a different time zone problem. There is also a big probability that the English language communication will be easier. What is more, geographical proximity of our business partner means that we can easily organize project meetings, where we can directly discuss important issues that will require strategic decisions for the project.
The author’s subjective opinion, the best solution for companies wanting to participate in the process of building an IT solution is nearshoring. Geographical proximity makes the software development process more optimal and adapted to our needs. The potentially higher cost of the task is offset by the possibility of influencing its course to a much greater extent than in the offshoring model. By implementing the project in the onshoring model, we get much greater confidence that the final result will be in line with our expectations. Even if we will change assumptions during the project it is only the onshoring model that will allow it to work efficiently on the contractor’s side and finalizing the project to include our modifications.
For companies from Scandinavia and western Europe, eastern Europe is the natural direction for seeking nearshoring partners. Polish programmers enjoy the opinion of the most efficient and innovative in Eastern Europe. Combined with employee costs that are lower than in the Scandinavian and Western Europe countries, this give an excellent duo. In the end, a client gets the highest level of service provided for reasonable money