Nearshore IT outsourcing - also known as nearshoring - involves sending information technology work to a foreign country that is relatively close to the home base of the company outsourcing the work.
Reasons to Nearshore IT Services
Companies may decide to nearshore some of their IT work because they want to cut costs, and nearshoring enables this by sending work to another country where workers will generally be paid lower wages.
However, unlike offshore IT outsourcing, which involves sending IT work to an overseas location that is much further away (e.g., work from U.S. companies being sent to India), nearshoring (e.g., sending work from the U.S. to Canada) offers the following benefits:
- fewer time zone differences;
- geographical proximity;
- more cultural and/or language similarities.
These conditions may be crucial to a company that is outsourcing a complex IT project and requires a lot of ongoing communication between its internal team and the nearshore team it is working with, or frequent travel to the nearshore destination.
Examples of Popular Nearshore Locations
U.S. companies have been known to nearshore IT work to Canada as well as Mexico and other Latin American countries. Similarly, companies in the U.K. may choose to nearshore work to Eastern European countries such as Ukraine or Bulgaria.