Onshoring or offshoring - which IT outsourcing model to choose?

Onshoring or offshoring - which IT outsourcing model to choose?

By Special Guest
Shan Ge
  |  May 06, 2021



Outsourcing is continuously on the rise, particularly in the IT industry. Which type of cooperation within the outsourcing model will fit your needs? We take a closer look at the pros and cons of all three of them.

For many decades, outsourcing has been gaining increasing popularity due to various benefits. The companies have noticed its potential already in the nineties - and today, it's one of the most well-established working models, particularly among big corporations. 

Why? There are few reasons behind it. Let's break down the two most common ones!

Increased efficiency

Most of the time, outsourcing increases work efficiency - and that reduces the operational costs. The faster the work is done - without compromising quality, obviously - the more the company benefits from it. With outsourcing companies, you can count on such a result - also, because it's in their interest. If both sides see the project through to the end on relatively short notice (with a satisfactory result), the outsourcing partner can hop into the next project right away. 

Access to specialized human resources & talents

Another great advantage from the company's perspective is the opportunity to cooperate with the most skilled professionals without having to hire them. That would most likely be more costly in the longer run. In the industries like IT, the specialization is very significant - some languages and skills take years to master. Meanwhile, each project needs an individually adjusted set of methodologies and frameworks. 

Thus, most companies' demand for professionals specialized in the particular field changes in time, depending on what they're working on at the moment. IT outsourcing responds to that, providing short-term full access to skilled specialists that "bridge the gap" in the team. You can choose IT team leasing or outsource one particular professional, depending on the type of demand.

Which model of IT outsourcing to choose?

Since the nineties, three distinct outsourcing models have been shaped, with offshoring as a dominating one (until recently). How do they differ, and which one will be best for you?

Offshoring

A model of cooperation that mainly refers connects the units on two different continents. In most cases, the outsourcing resources are delivered by the

pros: significantly reduced expenses, access to talents at low cost

cons: cultural differences, lower control level

Onshoring

Cooperation between the two companies from the same country. 

pros: highest control level, good communication, no cultural differences

cons: limited access to international talents, fewer financial benefits

If you're searching for a compromise, you may consider nearshoring. This variant of outsourcing refers to the cooperation between neighbours - like Germany-Poland, USA-Mexico, Switzerland-Italy, etc. It allows reducing expenses at a lower risk.

If you're searching for more information on IT experts outsourcing, check Eskom IT.