What's Onshore Outsourcing?
Onshore outsourcing refers to when a certain job / project is sent to a locally based outside product / service supplier.
What's Offshore Outsourcing?
Process of exporting a job / project to a supplier based outside the mother company is refered to as "offshore outsouring"
How Do I Choose?
Both offshore and onshore outsourcing is geared towards achieving one common goal - which is to achieve business goals / outcomes with significantly lower production costs and inhouse operational costs.
There are certain advantages and disadvantages of both these models.
|Locally based - Easy access to your development team||Higher labour costs|
|Communication / language||Adhere to local regulatory requirements|
|Low touch involvement||Project normally run over budget|
Onshore more does keep it simple. Often projects are managed and delivered by one vendor, removing 3rd party risk. Additionally, by keeping it local, the IT vendor is most likely to have an understanding of the client's target market and therefore functional needs.
Onshore delivery does presents one major complexity to the clients which is the cost of delivery. Onshore is up to 70% higher vs. offshore, as labor costs and an abundance of talent is 3rd world countries as opposed to high wage bases and skill shortages in the developed world.
High development costs also present project risk as there is less flexibility for scope and development changes without incurring significantly higher costs, which often results in projects being abandoned as they become unfeasible.
|Low Cost||Lack of physical interaction with the team|
|Better project experience||Communication barriers|
|Agility and flexibility||Time differences|