Outsourcing: Onshore vs. Nearshore vs. Offshore

August 19, 2021 / by Frederid Palacios

More and more companies are seeing the benefits of outsourcing their IT services to a managed services provider (MSP). MSPs are instrumental in providing an enhanced level of IT support, including information security, helpdesk support, regular maintenance, and more. While there is no question that outsourcing is beneficial, there are a few different varieties of outsourcing to choose from, each of which has its own pros and cons. To determine the best outsourcing option for your MSP, it is critical that you understand the differences between onshore, nearshore, and offshore outsourcing.

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Why Outsource?

Before we discuss the different types of outsourced MSPs that you can choose from, you need to understand the vitality of outsourcing. When outsourcing services, you are equipping your organization with experienced and expert support, ensuring that your organization receives the highest level of services. Additionally, outsourcing allows you to delegate the more tedious and routine tasks from your internal workforce, enabling them to focus on more high-priority projects.

Outsourcing can also be a great cost saver. While you will incur the cost of your provider, you can reduce spending on your own infrastructure by utilizing their technology, skills, and resources. MSPs are equipped with highly capable software and professionals experienced in using it. As you will be using the systems of your provider, you will not need to acquire these costly technologies yourself. You will only pay your provider for the resources you use instead of paying for the maintenance and management of unused resources. Furthermore, your MSP will ensure that your systems function properly, identifying and correcting problems before they become damaging with troubleshooting and remote monitoring.

With the skills of an MSP, your organization will experience improved levels of efficiency and competitiveness. The amount of time to implement technology will significantly decrease, enabling you to adopt and use new technology at an astonishing speed. As a result, you will see more innovation and productivity within your company, allowing your business to thrive at no additional labor to your workforce.



Onshoring is the outsourcing of local service providers. With this option, your company will receive outsourced IT support from a provider located in your country. For example, a company in the U.S. would outsource the skills of an MSP also located in the U.S.

One of the most significant benefits of onshoring is the level of control and contact achieved between your company and provider. As your MSP will be located in the same time zone, there will be minimal communication and scheduling challenges. In addition to this, because they are located close, any actions that need to be taken can be done quickly and efficiently. Additionally, because your MSP will be located in the same country, both organizations will follow the same legal regulations and cultural practices, ensuring a smooth partnership.

While onshoring comes with many advantages, there are some disadvantages to note as well. Onshoring is a highly convenient option to utilize, but it tends to be more expensive than other outsourcing options. Additionally, you have a smaller talent pool to choose from because you are seeking a provider within a narrower geographic range. As a result, the providers nearest you may not be able to fulfill all of your needs or have the highest quality of service.


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Nearshoring refers to outsourcing a provider located in a neighboring country. This means that if your company is located in the U.S., you may acquire the services of a supporter located in a local country such as Latin America. Typically, nearshoring is less expensive than the services of local providers, but this can depend on the country that your organization is based in.

This sourcing model is relatively similar to offshoring, with the primary difference being that your provider is located in a similar or the same time zone and close geographic proximity. Having a similar time zone to your provider is highly beneficial for communication purposes, as business hours will overlap closely. This will also allow you and your provider to interact in person as needed, enabling them to provide support efficiently and conveniently.  

One challenge with nearshoring is that the country you outsource from may have different copyright and patent violation rules than the country of your business. For this reason, you must understand the regulations that your provider is required to follow to ensure that their practices are compatible with your own and that you both comply with restrictions. An additional concern regarding nearshore MSPs is the cost. While nearshoring is typically less expensive than local providers, it can have higher fees than an offshore partner. While this may not be a deal-breaker, it is essential to discuss with your provider when determining your company's budget. 



Alternative to a nearshore provider, you may consider acquiring the services of an offshore provider. An offshore MSP is based in a far-away country. If you are a U.S. company, you may utilize offshoring with a provider located in China or an equally distant country.

While it may seem counterproductive to acquire a provider's services in a different time zone, offshoring can be extremely cost-effective due to lower labor costs. As you are not limited by geographic proximity, you can compare prices between providers to find the best rate suited to your budget and choose providers from a larger pool of talent. For this reason, offshore outsourcing may be a good option for companies looking to get good results at a low cost.

While lowered costs are a highly lucrative benefit, offshoring does come with a few disadvantages. As your provider may not have a similar time zone, scheduling conflicts and miscommunication errors may arise. As you may be in an opposite time zone from your provider, communication may have a significant lag, but this can be avoided with carefully planned scheduling. As a result, some scheduling flexibility may be required. Additionally, should you need to meet in person with your provider, this may incur high costs of travel which should be included in your budget.  


What is the Best Option?

Each option of outsourcing, whether onshore, nearshore, or offshore comes with its own set of advantages and disadvantages. The right provider will differ for each company, as each will suit your needs differently. The method you decide will depend on your organization’s individual needs, budget, goals, and location. Whichever you choose, outsourcing is an excellent method of obtaining efficient and high-quality IT and software support. By obtaining the services of an experienced MSP, you will equip your business with a high standard of technical services and support, ensuring that your IT infrastructure operates seamlessly. With these capabilities, your team can focus on driving your business forward, confident in the knowledge that your systems are in good hands.

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Tags: Near-Shoring, Technical Support Services

Frederid Palacios

Written by Frederid Palacios

Fred Palacios is a seasoned software architect with more than 20 years of experience participating in the entire software development cycle across a host of different industries--from automotive and services to petroleum, financial, and supply chain. In that time, his experience working closely with high-level stakeholders has provided him with a strategic vision for developing the right solutions to flexibly meet critical business needs. As CTO of Intertec, he's continuing to focus on the creation of business-critical applications for large enterprise projects, particularly those that handle high concurrency and large datasets. He is passionate about using technology as a tool to solve real-world problems and also mentoring technical teams to achieve their maximum potential and deliver quality software.

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