For most people, BPO can simply mean farming out business processes to third parties located in another country, but this is just one type of BPO. Small business and entrepreneurThe recent Clutch survey stated that around 90% of small businesses plan to outsource their services in 2022 due to the efficiency and flexibility that companies get. Global presenceAt the same time, outsourcing opens clients to global trade opportunities. They can establish their global presence and expand more easily to other locations since they already have operations in the area. Global marketSmall and medium-sized businesses find it most difficult to hire local employees that suit their roles. Even if these clients provide quality guidelines, there will still be differences in terms of the working culture and environment.

The nearshore model, in most cases, has only a little cost difference from the onshore model. To help you with this process, you can review our primer on how to hire an outsourced team. The bottom line is that outsourcing is a fantastic option for most companies, thanks to lower costs and better quality.

Techopedia Explains Onshore Outsourcing

However, there might be slight time zone differences in larger countries . Citigroup is another global company that prefers outsourcing IT services. In 2012, the company cut down nearly 25% of in-house IT-related positions to outsource them. In 2013, the company hired an offshore development team to build POS solutions for all cash settlement units across the entire network of shops. The 6-year cooperation with the contractor also included the installation and further improvement of POS systems. Hectic market speed, multi-functioning operations, extremely tough competition, and high requirements for the quality of services and products are roadblocks.

Just keep reading to get an overview of other options that will define the partnership and pricing models of your cooperation with a vendor. When your project has many parts that can be developed individually so that one team’s work doesn’t depend on another team’s results. The more vendors you cooperate with, the more you should focus on managing and overseeing them all to avoid collapses. Moreover, the administration of multiple contracts and agreements will require more internal resources to check reports from their providers and evaluate their performance. Sourcing talent offshore from countries with larger labor pools, like India, is a cheaper alternative to nearshoring.

Why Do Companies Choose To Outsource?

Tapping into the global talent pool allows you to shop for the best rates and find a partner with experience in your industry or the specific technology your business needs. What picture is drawn in your head when you imagine onshore outsourcing. Face-to-face meetings where both teams can communicate and brainstorm brilliant ideas. These and other things are really appealing and they contribute to the success of a project. ” a few years ago, we would definitely go with the onshore outsourcing strategy.

Eastern Europe, which previously reigned supreme in IT outsourcing, is now out of the running. Companies in North America are now on the hunt for new outsourcing hotspots that offer the same quality of service at a reduced cost. Alongside the search for new directions, it is wise to clear out the requirements and type of outsourcing model that will help better navigate and find a reliable partner. An experienced software development company offers transparency, a better time to market, and well-trained resources. The onshore outsourcing model does offer benefits of trustworthiness and transparency for clients with opportunities to meet, greet, and know the development status.

Steps to follow when looking for an outsourcing partner

With this shift in focus, companies improve their current processes which may result in improved customer satisfaction. BPO helps companies divert their resources to more critical business strategies. The need for hiring workers with similar cultures and languages has birthed nearshore outsourcing.

Finding a skilled candidate for a project is challenging for any business and requires a ton of time and finances. Along with that, companies may confront issues with employee training, as this process needs many resources. To deal with the challenges of sustaining an internal team, many companies have implemented the practice of IT outsourcing. Take the models that potentially fit your business needs and the desired level of control and thoroughly evaluate the pros and cons as well as the risks. Thus, you will clearly understand what you get and what is at stake. And be aware that underestimating possible risks may lead to costly mistakes, so check these tips to avoid IT outsourcing failures.

Transparency level of the company

While more difficult than doing a site visit to an onshore partner, visiting the home country of your nearshore development team is less complicated than traveling to Asia or Eastern Europe. In addition to the obvious advantage of smoother communication, onshoring partners you with developers in your same time zone. This is especially meaningful when frequent back-and-forth collaboration is needed on a project. When it comes to building or upgrading software for your company, nothing is more important than having the right resources and personnel for the job. Outsourced development gives you just that and lets you retain budget and hiring flexibility. Discovery At this stage, all requirements and the needs of the target audience are scrupulously analyzed and the product vision and business goals are identified.

Outsourcing poses more growth opportunities for businesses of all shapes and sizes. While there is still drawbacks to this practice, it is safe to say that its advantages outweigh its risks. Fueled by a growing need for geo-redundancy, countries in onshore software development Central and South America are quickly becoming the go-to destination for seeking a quality BPO partner. HR and recruiting, accounting and bookkeeping, mobile and web development, and design and graphics are other examples of production offshoring.

What Prominent Companies Used Offshore Development Services?

Cultural and language differences, and even difficult-to-understand accents, can at times cause some communication issues between team members working in different locations. If you are looking to add experienced developers to your team, you’ve probably already noticed the lack of software developers here in the U.S. Rest assured that you are not the only one who is struggling with this challenge. If you want an American team, you’ve only got one option and that is onshore outsourcing. The drawbacks are a higher price and that the right developers aren’t always available when you need them. Choosing the suitable shoring model for your business can be difficult.

  • Meanwhile, time zone differences could also be beneficial for you, as all the work will be done by the start of a new business day in your country.
  • This can lead to increased sales and profits, as products are released sooner rather than later.
  • Save money and increase sales with a brand-obsessed, people-first team that delivers a high-touch, superior customer experience, every time.
  • For instance, a German company outsourcing software development within its own country will be assured of data security.
  • Nearshore outsourcing makes it easier for teams to collaborate in case of in-person visits or training sessions.
  • Even without getting too technical, they can comfortably discuss the initial solutions to provide according to their client’s requirements.
  • One example of this is foreign companies that have been offshoring their call center in the Philippines.