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How To Choose Between Onshore vs Offshore Software Development

Krunal Shah

Jan 25, 2021

9 min readLast Updated Jun 26, 2023

Onshore vs Offshore software development

Technology is getting smarter, in order to walk step by step with the technology-driven world, it is important to be aware and updated about the new ways to get the work done without any hassle.

Have so much on your plate but can not focus? Does your company want to launch an app or have a project to complete but lacks efficient staff?

While trying to finish the work and to save time, the right equipment and highly skilled professionals are a necessity.

The requirement of doing the work up to the client's expectations, you might have to hire a team of highly skilled developers which can take up all of your time, space, and money.

To avoid all that, companies look for alternatives that can provide everything you need?

Here outsourcing your software development is an all-in-one option, depending on your requirements.

Offshore and Onshore software development are the two options preferred by companies these days.

But before we begin discussing which option to choose, we will take a quick look at what software development outsourcing is and what advantages both the given options offer. Moving down you will find out all the things you need to know while choosing the right software development partner for you and why.

Table of Content

What is software outsourcing, and how does it help businesses?

Software outsourcing for business

Software Outsourcing means you hire a team of software developers outside your company to do the operational functions of your business. It gives you the freedom to open many doors of opportunity without breaking your bank. It is mainly done to cut costs and save money, bringing consistency to your business.

The hired professionals are responsible for fulfilling that part of your business which you couldn't handle on your own. Therefore, your company can focus on the core business.

You no longer have to worry about recruiting or training new in-house employees, as you will have a dedicated team of outsourcing developers working for you remotely.

It will not only give your company more exposure, but you will also welcome new talents, skills, strategies, and ideas outside your in-house company with increased growth and scope, without compromising on service quality.

Operations having permanent or temporary needs will allow outsourcing to bring in extra resources when it's required and release them when done.

Benefits of Software Outsourcing

Outsourcing your software development especially consists of reducing a company's costs. By decreasing the investments of an organization in capital expenditures and want for in-residence workforce training. Typically enhancing the usage of a company's resources.

And since these processes reduce recruiting and hiring costs, resources, and infrastructure. Enabling your company to quickly expand and contract employees elsewhere, depending on your business needs. So many companies have expanded with the help of software outsourcing and are ruling the world now with their service. It acts as a savior when the service prices are skyrocketing.

Globally, the largest customers of software outsourcing are Tech and Telco giants. These corporations' headquarters are in nations that include the Philippines and India.

Alibaba, WhatsApp, Google, and Slack are some of the few companies that are highly successful companies that are outsourced for business growth.

So the bottom line is, any company can benefit whether small or big from software outsourcing by finding the right software outsourcing partner.

However, you don't get all these benefits with every different type of outsourcing, different types of software outsourcing avail you different benefits. Let’s understand the three types of software development outsourcing.

Onshore vs Offshore vs Nearshore Software Development

Onshore vs Offshore vs Nearshore Software Development

Onshore software development

Onshoring simply means outsourcing a certain part of your business to the team of developers located inside your own country.

Offshore software development

Offshoring means outsourcing a certain part of your business to a team of developers outside your country with different time zones.

Nearshore software development

Nearshoring refers to outsourcing a certain part of your business in a neighboring country having similar time zones.

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Advantages offered by onshore software development

onshore outsourcing software development

The key benefits of all the models are as followed. Let’s start discussing.


It isn't as cost-efficient as compared to the other two options in terms of highly skilled developers. But it does cut costs in terms of resources and infrastructure, saving you a lot of time and money.

No Linguistic Barrier

As the software developer is from the same country you can easily communicate and understand each other without any problem.

Easy understanding because of no linguistic or cultural difference and same days of holidays.

Sames Rules

Located in the same country gives the benefit of following the same rules and regulations in terms of employees, privacy, and tax policy. You will never have to worry about copyright or patent infringement.

Same Time Zone

Having the same time zone will have no problem in synchronization. Providing you the benefit of easy communication because it's local.


It is one of the many options that make onshore a better option. If your outsourcer is only a few miles away you can always have a face-to-face interaction if that's what you prefer.

You gain a greater level of control, reliability, and responsiveness.

They know the same market, the customer service becomes easy as they understand your clients and their needs making it reflect on your company’s image.

Advantages offered by offshore software development

offshore outsourcing software development


Here the dedicated team of experts will be cheaper considering the other two options while making no compromises in the performance or the quality of their work. As it is scalable it will allow the staff to only focus on a particular project for your company capable of delivering strict deadlines.

Global Pool of Talent

You will have access to the young and vast talents globally through offshoring. Your teams across multiple locations not only offers your company specialised services. But also, cut back the risks of labor lags, meager client engagement, communication, and similar challenges.

Different Time Zones

This distinctive advantage of different time zones provides you the advantage of nonstop business operations. Adjusted work shifts make sure  your business desires each hour of the day, every day, by the foremost appropriate staff available.

Faster Service

You'd be quicker in obtaining your ideas regenerate into merchandise and better at delivering the added proposition. To be able to provide service 24/7 to support your clients for their needs because of different time zones resulting in better customer service. Thus, making offshoring an advantage for any business attaining specific requirements.

Offshoring provides benefits to your business more than you think. It isn't just for cutting costs but promotes business and innovation, repositioning your company in the market, expanding your services and offers.

Advantages offered by nearshore software development

Nearshore outsourcing software development

Similar Time Zones

The different time zone isn't a problem because the working hours are the same. You wouldn’t have to burn the night to set up a meeting or to talk to the company.


It is a neighboring country where you can meet your outsourced partner face to face or in urgency, saving you a lot of travel costs.

Nearshore outsourcing is an in-between option while considering the other two options. Technically, nearshore outsourcing works just like offshore the only difference is the location.

Now that you have understood the difference between onshore and offshore software development and its importance it will be easier for you to choose.  No matter what option you choose, it all allows you to be more flexible.

Offshore outsourcing is not only proven cost-efficient but provides you the highly qualified skilled professionals at a low price. Software development outsourcing gives both small and big businesses to access global talent, making recruiting more affordable and easier.

Offshore and Onshore are the two software outsource mainly used by companies these days.

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IT Outsourcing stats

Image source: Statista

According to the statistics, 57% of companies outsourced so that they could focus on their core business. 31% outsourced to improve service quality, while 17% specifically used outsourcing to bring change and innovations into the business.

To handle one of their main business processes, 37% of small businesses use outsourcing.

In 2019, $92.5 billion was the worth of The Global Outsourcing Market.

85% of logistics leaders increased their outsourcing budget for the year 2020 and beyond, stating that outsourcing is no longer an option but a necessity.

Companies that outsource payroll management on an average saved more than 18% than those who do it in-house.

India is a leading country in global outsourcing, as more than 59% of businesses in the world have already outsourced some form of service in India.

Read More: Finding The Right Software Outsourcing Partner in India: 5 Useful Tips

Why is offshore better than onshore?

If creating a product or service at a far lower cost across the ocean is possible, it is wiser to go for offshore software development than produce it regionally or inside your company.

Having multiple teams in different countries provides a greater marketing opportunity allowing you to support your client whenever they need it.

Moreover, they have skilled employees with expert knowledge and experience, and if they don’t have someone who can solve your problem. They have a network of specialists with complementary skills they will pull the work from. You don’t have that kind of flexibility with in-house employees.

Offshore software outsourcing is a cost-cutting tool, work efficient and an easy option to provide better service quality.

Therefore, depending on the type of business and the requirements. Offshore software development outsourcing is the best option if you are someone with a limited budget and higher goals.

Common problems to overcome while outsourcing software development

  • To avoid any kind of confusion and getting the best service, make sure to put everything in detail in the SLA(Service Level Agreement) document, to avoid any legal trouble.
  • As the outsourced company will have complete ownership of the project given to them, it is very important to have proper risk management while hiring them.
  • Make sure the Communication skills of the team are top-notch making the coordination better in the future.
  • Do a complete research on the company you want to outsource with about their safety practices, resources, and quality control. It will become easy for you to trust your partner.
  • Make sure they follow Agile Development Practices.
  • Before going into a contract, ensure you have done the mandatory analysis and investigation into the traits and abilities of your third-party vendor.

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Why Third Rock Techkno a one-stop solution?

Third Rock Techkno is a one-stop solution for all your outsourcing software development-related businesses.

When it comes to quality and professionalism, responsiveness, and innovation, Third Rock Techkno promises to deliver all. Along with methodology, commercial flexibility, and knowledge management, total Back Office Solution.

The offshore team at Third Rock Techno is well versed in English, hence creating a language with no barrier.

We expertise in the service of Web development, Voice development, and Mobile app development. We provide you with highly skilled software developers for your projects as per your requirements so that you can focus on your main business.

Build World-Class Software at Competitive Rates

We prioritize value over cost. Our industry experts both in the US and in India ensure your unique software needs are met while also maximizing the ROI.

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