What Is Nearshore Outsourcing and How It Benefits?

The whole IT industry has changed due to outsourcing software development. Even a large and successful technology company simply can't produce everything it needs by itself, and the right decision is to look for partner-oriented software vendors in countries where their services are relatively cheap. 

For this reason, more and more custom software development work is sent to India, China, Eastern Europe, Mexico or Ireland. The first two areas are historically the biggest offshore development areas thanks to the lowest operational costs, but some countries of Europe and America can compete in price and outperform them in quality by far.



Being a software developer is a highly qualified and high-paying job. Software development projects are so resource-intensive and high-priced that even well-established technology providers are taking the risks of outsourcing software development - partial or complete development of software products by contractors in other countries. In most cases, the work shipped overseas meets all expectations of the client, but it takes long-term experience and skillful management to make the right decisions and make the cooperation work on the highest levels of performance.

Nearshore outsourcing is the new term in programming and software engineering concerning software development in countries with good educations and medium rates. It means outsourcing programming services to a nearby location outside of the client's country, in the same cultural area. For the United States it is usually Mexico and Canada, and big companies of Western European countries tend to outsource software development to their Eastern European neighbours. Geographic proximity means that cultural difference is not so crucial, and the contractor's team can speak at least some level of the client's language.

Cost savings are not so big in this case, but they are still significant because of inequality of living standards. Besides, the client can easily travel abroad to meet the contractor and discuss all terms of working agreement face to face. He even can get personally acquainted with the team and prove their professional level, or invite the team to his own country to give complete information on the project.

How Outsourcing Software Development Benefits?

The most common reason for outsourcing software development is saving costs. Developers can charge very different amounts for their services depending on where they live, and, if telecommunication infrastructure is well developed in their countries, it is possible to hire a developer or a complete team several times cheaper than it is possible in such countries as USA or Switzerland. As in any other industry, lower rates mean less qualification, and the cheapest labour force can produce unpredictable results. To avoid unreasonable expenses, potential customers are looking for software development companies with an extensive portfolio, positive testimonials and, if possible, similar cultural values.

One more reason to be careful when going offshore is business culture, which is very different in countries of East and West. For example, it is virtually impossible to legally protect intellectual property when outsourcing software development to India and China. The first rule of doing business with foreigners in these countries implies that any principles of business ethics are applicable to local companies first and, often, only. The foreign company will always lose in any legal debate if there is the slightest chance for the local company to win or at least postpone the hearings. On the contrary, developed countries in Europe, North and Central America share business values with their neighbours.

Nearshore outsourcing has great potential in the nearest future of software development services. Although rates are not so low in Eastern Europe as in India, the overall cost of outsourcing software development sometimes is the same because highly qualified programmers work faster, better and more effectively. Their capabilities and total productivity outdo the average level of an Indian developer, though respected outsourcing companies of India can offer the same good quality for a higher price.

Nearshore software development provides significant savings while retaining a highly skilled labor pool. Such model of cooperation is common even among companies that don't specialize in outsourcing. Developing custom software on demand is a normal practice for many established companies that have already launched their own successful products. For the client, labor costs can be a big issue, especially if it is an emerging company with main business direction other than software development.

Software Development China: The Next Generation IT Outsourcing Country

For any IT based company, its software development department plays a vital role in making advancement and get the desired recognition in the market. Since last few years the software development and its support and services are being outsourced from various countries. Today there would be hardly a business left out who hasn't outsourced minimal of IT development support. Because of the cost factor fact, the parent company at times finds it easy to go with outsourcing trend.

Currently China is considered to be the foremost country where its residing companies actively participate in major IT outsourcing projects. Out of the other IT outsourcing things, Software development bucks up the position.

China is believed to be the leading next generation global hub for outsourcing. The country has some world class technical skilled manpower, recognized expertise in advanced IT software development methodologies and moreover deep IT industry working experience that makes the best and the most picked to deliver the results for various businesses around the globe. Observing the increasing demand in the IT industry, many foreign countries opt for their software development, China offers a significant cost reduction compared to what other countries quote.

The country aims to outplace other countries to become the next dominant in the software development outsourcing. Working on its reducing and transforming its expenses into variable and fixed, it has become an apple of the eye for those who are on a lookout for budgetary projects.

Not just software development, China outsourcing companies also offers services and assistance to the small entrepreneurs to Fortune 500 companies in their various IT related work, BPO sector, Managing Infrastructure, IT manpower recruiting, Tech support, Trainings, Consulting, IT management etc. Whether it is to provide an on-going support or creating new software, the IT companies of China are flexible to meet its user's expectation and requirement.

We are experiencing the IT market continues to grow and with that liberalization and globalization are getting more and more exposure. There is a need of constant improvement in the technology hence; other IT categories and software development; China IT companies are moving further to beat the competition.