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The Difference Between Offshore and Onshore Teams

  • Offshore software development vs onshore software development? What’s the difference? It’s not uncommon to hear this terminology in today’s marketplace, but many people don’t know what it means, or which one they should choose when developing their product or service. In the infographic below, we’ll explore these concepts in greater detail and explain when each option might be best for your company.

    What is offshore software development?

    It is a collective term that refers to various types of work that are offshored or conducted outside of one’s own country. For example, if you are an IT company located in the US, but you have an offshore development center in India, then your organization is said to have used offshore development services. We will be discussing it more in detail later on.

    Advantages Of Outsourcing Software Development

    There are many advantages of outsourcing software development to an offshore software development company. The first, most noticeable advantage is cost-efficiency. When you outsource to an off-shore team, it becomes possible to hire at a lower cost than if you hired in-house developers. What makes it possible for outsourcing companies to hire at these rates? First of all, there is no overpayment for overhead costs since there is no office space or general office equipment required.

    Disadvantages Of Outsourcing Software Development

    Before you start looking for an offshore development company, it’s worth understanding why some may not be suitable for your requirements. One of the biggest factors is the geographic distance between your team and developers—while some software development companies are nearby, others are in completely different countries. This causes miscommunication when working on projects, particularly if English isn’t a shared language. Miscommunication is problematic when bugs slip through testing or projects are delivered late due to poor communication.

    What Is An Onshore Company?

    It’s important to note that an onshore company does not mean you’re working with an in-country team. It merely means your team is located in a neighboring country, rather than across oceans. These teams tend to be much closer to US time zones, which makes it easier for face-to-face meetings to occur. This proximity also means there are fewer time differences, which can ease communication over email or phone calls.

    Advantages Of An Onshore Company

    When a company is based in a different country, it’s called offshore development. The primary advantage of an onshore company is that it provides both cultural fits as well as consistent time zone accessibility. This means you can have face-to-face meetings with team members daily. This makes work more efficient. In addition, your team members will not be susceptible to homesickness or culture shock due to being far away from their native country.

    Disadvantages Of An Onshore Company

    The location of your business can greatly impact how you structure your team. This is due to a combination of both tax laws and where your customer base resides. Taxes – Different countries have different tax systems, which means that an onshore company may end up paying more taxes than an offshore one.

    Also Read: A Detailed Cost Comparison – Offshore VS Onshore Teams  

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