There are many advantages and disadvantages when deciding what is best for your company in choosing offshore or near shore outsourcing for development, quality assurance, and other staff augmentations services. Let's break it down.
When using nearshore outsourcing, there is no real time difference. The nearshore location is typically in the same time zone as your company or within an hour, making communication much easier.
In offshore outsourcing, there is typically a 8-12 hour difference. This requires your team to shift their schedule to either end of the day and only provides an hour or two overlap. Questions or issues sit for another 12 hours, greatly reducing productivity.
Imagine taking your the developers in your office today and building a wall around them that has a door that's only open 1 hour a day. How do you think development would progress?
Tied with time zone, nearshore development provides physically and financially easier travel to the nearshore facility for on site reviews, training, and working sessions. With an offshore location you have much higher travel costs, less flexibility in travel scheduling, and employees slogged with jet lag, reducing productivity on both ends of travel.
Cost savings and Productivity:
The effects of time zone and proximity greatly impact your first goal in looking at nearshore or offshore development: Cost savings. We've found that with offshore development we get output equivalent to an in house developer of 50% or less. With nearshore development we experience 85% or greater productivity match.
Take your offshore developer rate and compare it to the cost of an in house developer working half time. Is the remaining savings worth the hassle?