Outsourcing and its benefits Part 1

June 18, 2021

In this article, I have decided to follow the same line as my previous blog (The main misconceptions of remote work), further reinforcing the trend that many companies are taking in this new technological age.

This Blog specifically will focus on the benefits of doing Software Outsourcing and the reasons why turn to Near-shore companies as an ally for your upcoming developments.

Among the major benefits of having this service are:

  • Access to innovation and cutting-edge technologies
  • Better practices
  • Great offer of high quality talent with multiple features
  • Reduction of operating expenses and costs
  • More effective solutions involving personnel from different environments

In addition to these benefits, there is an added value of working with outsourcing companies and not Freelancers (independent remote developers) such as:

  • Levels of hierarchy, levels of communication, certain standards
  • Reports of hours, formats oriented to reach objectives and certainty in the communication
  • High level of responsibility

On-shore, near-shore and off-shore

But, before going deeper into the subject, I will briefly explain the difference between On-shore, near-shore and off-shore subcontracting

These three types of classification are determined based on the geographical position with respect to the United States and means:

  • Onshore: Hiring staff to work remotely within the country (United States)
  • Near-shore: It refers to the recruitment of collaborators in the US geographic adjacencies such as Canada, Mexico, Panama and South America.
  • Off-shore: This classification refers to the most remote regions in reference to the United States, where there is a large difference between time zones such as Eastern Europe and Asia

A determining factor for the final cost of outsourcing depends clearly on that classification of the company or talent and therefore it is concluded that the best rates for Outsourcing are in Near-shore and Off-shore.

But there is a great advantage between near-shore vs. off-shore and is that the difference in time zones can affect the performance and effectiveness of teamwork

We also have the comparison between on-shore Vs. near-shore, where the second, comes out advantageous, since development teams cost a fraction of what would be paid to hire, develop and retain an internal team.

So to conclude with the topic of classifications, we can assert that the subcontracting of near-shore is more profitable with greater benefits, without giving up a high quality.


Costs/Expenses

Outsourcing or subcontracting will always reduce costs, when comparing the final costs of outsourcing Vs. internal contracting, but ... not only rely on cost reduction and let it be the deciding factor to hire. Keep in mind that when hiring a company with a very low costs, it may be reflected in the quality of work.

When entering the market to find a commercial ally to outsource, be sure to investigate how that company will generate added value in terms of technology, innovation and experience.

But ... Why should I outsource when I can create and directly hire an internal team?

There are many other factors that trigger skyrocketing costs by hiring your own internal developers, such as a per hourly rate (plus taxes), medical care, retirement plans, vacations, etc.

That is why when outsourcing these services, many of the internal costs disappear.


I am going to give you some time to analyze and take into account the great variety of benefits that could be obtained by hiring a company with vast experience, innovative and provide added value for the development of future projects.

In the next blog, I will give continuity to this article, focused on the advantages of near-shore companies as their strategic ally for projects.