Difference between – Offshoring, On-Site, Near-Shore

Difference between – Offshoring, On-Site, Near-Shore

These are the three different working models of a company. Offshoring means shifting your business process from to another country. In general Company 20-30% is work done in on-site and rest of the work is outsource.

Offshoring: - In Offshore Model, the full project is completed at the service provider’s Center. The center can be present in many counties. Once the initial requirement is clear than the client has no face to face contact with the offshore team. But during the process they can contact each other by other means of communication at any point of the project to discuss any doubt or issue related to project.

The offshore service model is given preference when the client requirement is clear and offshore team has clear understanding of the project requirement. There is less chance of any additional requirement that can be added in mean time of project progress.

Offshore is given preference when the project is long term and has many phases.

It is given importance when the client has many IT projects so that he can be done in affordable cost. The offshore team has dedicated team of developers so that the project can be completed as estimated time period.

Since there is no physical contact between client and service providers so there is always risk of communication gap between client and service providers which can be some kind of risk involve to the project.

However before choosing offshore model client need to be aware of certain outsourcing issue, that has to be carefully taken care off. All the point should be clear before going ahead with vendor.

Offshore advantages:

  1. Low labor cost which can be reflect at the total cost of the project.
  2. Client can get excellent result of good quality offshore team.
  3. Client does not need any additional expense related to infrastructure or any other.

On-site:- In on-site model, the full project is completed at the client center. Service provider’s skill personnel work on the client site with regular integration with the client. Everything is done on client site including collecting information to completion and maintenance and support of the project.

On-site model is preferred where client is not clear about is requirement and outcome of his/her requirement and also there is regular maintenance work is needed. In some cases client wants approval and regular update from service provider so in that case also on-site model is preferred and also if client want to move to the latest technologies and upgrade their existing project so in that case as we well on-site model is preferred. Client choose on-site model where his/her project is highly confidential.

Advantages of onsite model:

  1. Face to face interaction between client and service provider is there is no chance of communication gab in between.
  2. Client can see the progress of his/her project progress.
  3. Understanding of requirement clearly
  4. Client can make any changes at any stage of the project.
  5. Service provider can get good idea of client requirement.

On-site model is preferred when the project is long lasting and expected to be continue for maintenance and support work. Client can clear any queries directing to the client.

Near-shore:- In Near-shore model, Service provider generally shift their business process nearby countries. Often sharing you border to your own countries, where both parties can be benefited from each other. Near shoring is generally done for reducing cost. Some time it is necessary to find out skilled people at lower cost to reduce the project cost and you also make your presence to different countries. Temperature, geographic, cultural, linguistic, political, or historical linkages are quite similar to client because they are located in nearby countries.

Advantages of Near-Shore:

  1. Client can get best technology, skilled workers and equipment, in their budgets.
  2. There can be possibilities of face to face integration.
  3. Client can also visit the site and queries about the projects.
  4. Client has also chance to make his market expansion and presence in different countries.
  5. It also makes strong relation among countries.

It has different constraint as well

  1. Local employment laws and practices.
  2. Timing lags between the parties.
  3. Certain countries have certain taxes. That has to be bear on the project.
  4. The management administration cost increases the cost of the project.
  5. Near-shore rates to be higher than offshore.

These thee model are chosen depends on project requirement and its importance. All the three model has its Importance in to make your business successful.

These models show the company image in Global Market. Thus, it is understandable to see many companies are jumping into these three models. These three models serve as a great Importance to build a valuable position in a global market.

Source: ezinemark.com
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