Companies facing the decision between Nearshoring or Offshoring part of (or fully) their technological development processes usually choose between the most cost-effective solution. However, there are several key factors that should be in consideration besides keeping the project on a tight budget:
This one reflects the main difference between Nearshoring and Offshoring: Nearshoring is when you outsource parts of your IT to a neighbouring/close-by country; Offshoring is when your outsourcing partner is (most times) a continent or 2 away from you. Several advantages can come from having a team working on the same schedule as you: you can set up meetings via videoconference, work closely in real-time and solve issues as soon as they arise, without the need for waiting hours/days until you are able to reach out to your colleagues abroad.
2. Work/biz culture & methods
Probably the most overlooked aspect, but possibly the most important one. The farther the culture of the new team is from yours, the bigger the amount of time to align work methods and processes. And you also have to take into account that you might never reach an ideal compromise between your ways and the ways of the place your new team is in.
3. Travel costs and possibility of working face-to-face semi-regularly
The fact that you have a team working a few hours away by plane from you, allows you to set up trips semi-regularly between team members so that they can have some face-to-face work time and are able to establish a closer working relationship. In an era where we are all connected, it never has been so prevalent the need for real human interaction.
4. Keep your corporate culture, even across borders
One of the biggest complains of companies that decided to move parts of their technological development process abroad, is the fact that the team in the new country is not aligned in the corporate culture of the mother company. When you factor in that, through nearshoring, your new team is in the same timezone, has a similar work culture and business processes, and cheap(er) travel costs allow you to interchange team members between host and original country in order to have face-to-face team between all teams; then you are able to create an ecosystem in which your company culture can prevail and even improve. Nevertheless, it is important that your new partner understands this need and develops efforts to try to emulate your culture into its own.
Should your company be faced with a decision between these 2 kinds of technology development outsourcing, please keep in mind that you might be sacrificing long-term innovation and development, for short-term budget constraints.