Optimized Global Delivery

[Infographic] The Benefits and Challenges of Offshore, Nearshore, and Onshore Software Development

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The digital world is global, now, more than ever. 2020 was a year that challenged companies in every industry to not only adapt to an increasingly digital world, but to innovate quickly and accelerate their digital initiatives to survive in the competitive marketplace. Whether you are B2B, B2C, or a strategic blend of the two operating models, your consumers expect seamless user experiences powered by custom technology solutions. An optimized global delivery model that is tailored to your organization can accelerate these digital projects in the most cost-effective way possible while maintaining high standards for quality.

What is Global Delivery?

Global delivery generally refers to custom software development projects where the work is conducted by teams located in different parts of the world. From a U.S.-based perspective, these delivery models are typically categorized as follows:

  • Offshore: Significantly geographically dispersed teams in different time zones than the U.S. Examples include India and China.
  • Nearshore: Teams in nearby geographic locations and/or within a U.S. time zone. Examples include Colombia, Mexico, and Costa Rica.
  • Onshore: Teams within the U.S., often working within centralized delivery centers.

Why Go Global?

Optimized global delivery is a cost-effective solution that empowers organizations to accelerate digital initiatives without sacrificing quality. Each global delivery model provides unique benefits and challenges. Striking the right balance between the three models is essential to the success of the overall project. Before engaging with potential global partners, it is important to understand the benefits and challenges associated with each of the global delivery models to begin developing a strategy.

2020 Global Delivery Pros And Cons V6 01

Offshore Delivery Benefits

Greatest Cost Savings

Delivery centers in countries like India, China, and Eastern Europe are popular offshore locations for U.S. companies due to some of the lowest price points available. Lower prices do not yield lower quality deliverables. Perficient’s unique agile methodology eliminates risks often associated with offshore delivery models, and fosters an environment with collaboration and communication between teams.

Available Talent

The talent pool in offshore locations has been developing for many years, resulting in a high volume of skilled professionals. The availability of highly-skilled software developers and engineers further increases quality and agility.

Scalability

Deep offshore talent pools allow teams to quickly scale to meet the specific needs of each unique project. With a wide variety of specialized developers, offshore teams are able to take their clients’ software development projects to the next level.

Offshore Delivery Challenges

Time Zone Differences

Modern software development requires agility, which is more challenging when teams are separated by multiple time zones.

Industry Regulations

Certain industries, like government or financial services, may be explicitly regulated to the U.S., meaning companies cannot utilize offshore resources and must keep their software development projects in the United States.

Nearshore Delivery Benefits

Time Zone Compatibility

Nearshore software delivery regions boast convenient geographic proximity and time zone alignment to the U.S. This allows for easier on-site collaboration when necessary and enables real-time communication with remote teams during regular business operating hours.

Cost-Effective

While not as cost effective as the offshore delivery model, nearshore delivery still provides significant cost benefits compared to the domestic alternative.

English Language Skills and Cultural Compatibility

Nearshore regions have strong English language skills and cultural compatibility, allowing for more seamless communication between teams. A strong cultural alignment with the United States also reduces instances of cultural misunderstandings.

Nearshore Delivery Challenges

Lower Cost Savings

While there are cost benefits to nearshore software development, they are typically not as significant as those found offshore.

Industry Regulations

Similar to offshore delivery, heavily-regulated industries may prevent companies from utilizing nearshore resources and require certain projects to remain within the United States.

Onshore Delivery Benefits

Communication and Cultural Compatibility

Working with teams in your home country virtually eliminates communication barriers and cultural misunderstandings. This enables a seamless integration with remote teams.

World-Class Talent

Software developers and engineers in the U.S. are some of the best in the world, ensuring high-quality software products. The talent pool within the United States is diverse, with availability of highly-specialized engineers and developers across a variety of platforms and technologies.

On-Site Collaboration

With an extended team located within your same country, on-site collaboration is a more feasible option when necessary. This reduces the expenses and inconveniences associated with international travel for a large team.

Onshore Delivery Challenges

Most Expensive Option

Domestic development partners charge exponentially higher rates than their nearshore or offshore counterparts. This is due in large part to the strength of the U.S. dollar over other international currencies and higher costs of living within the United States.

Talent Shortages

While the available talent in the U.S. is indeed world-class, U.S.-based developers can be difficult to recruit and retain. The technology industry in the United States is extremely competitive, and as costs to retain employees increase, overall project labor costs do as well.

Which Global Delivery Model is Right for You?

A truly optimized global delivery strategy incorporates a balance of all three delivery models to enable agility. It is important to partner with a digital consultancy that has a global, team-oriented mindset to find the right balance for your organization’s next digital project. Organizing a multi-shore project team requires a strategy that takes each role on the team into account. You want to ensure that you are staffing a team with the right skills in the right place at the right time, and are taking into account the nature of the project as well as where it is within its lifecycle.

As a leading global digital consultancy, Perficient takes an “all-of-the-above” approach to global delivery, seamlessly combining offshore, nearshore, and onshore teams to deliver powerful results for our clients. Our agile methodology and digital strategy have been proven and refined through hundreds of projects with leading brands across a wide variety of industries.

For more information about Perficient’s global delivery expertise, subscribe to Perficient’s blog, and follow us on Twitter and LinkedIn.

About the Author

Anna Berry is an Associate Marketing Manager at Perficient, overseeing marketing for the Product Development and Global Delivery business units.

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