Onshore Software Development Model: All Advantages and Disadvantages

Technology consumption is at an all-time high with companies using an average of  110 SaaS solutions to fulfill various customer needs. This represents a 38% in the last year alone and a 1,275% increase in the last seven years.

onshore software development

Although some businesses choose to use ready-made software solutions on subscription plans, a majority of businesses still prefer building their custom systems from scratch. In that case, you would want to work with external resources, especially if you are going to speed up your internal development process amid the current shortage of software engineers.

Businesses that choose to work with an  extended development team enjoy greater efficiency, flexibility, as well as quality consistency. However, you need to make the best outsourcing decision that compliments your business needs. There are three primary options including near shore, offshore, and onshore development. The last one is the go-to option for many businesses. That said, let’s take a look at onshore software development in detail. Keep reading to learn more.

Onshore Meaning in Software Development

Onshore software development entails outsourcing work to a service provider located near you, usually in the same country. Businesses with overwhelmed internal IT departments usually turn to onshore software developers who can work autonomously or as an extension of the company’s team. This option allows you to utilize time well as you focus on core business strategies, such as focusing on optimal product delivery.

Key Difference Between Onshore and Offshore Software Development

What is the difference between onshore and offshore software development? Offshore software development involves working with overseas contractors to handle your project either wholly or partially. However, an offshore company can also be any developer registered in another country but operates in a different one altogether, usually due to tax incentives and greater privacy.

Let’s compare the two models in this table to put the differences in better perspective.

Offshore DevelopmentOnshore Development
Work with overseas teams and contractorsWork with local contractors
Less red tapeMore red tapes
Faster turnaround due to expansive talentsTurnaround can be slow
Challenging to manageGreater convenience

Pros and Cons of Onshore Development You Should Know

Many businesses opt to work with onshore software development teams for good reasons, especially if they don’t find it convenient to hire and onboard contractors oversees. However, it will help if you understand the benefits of onshore software development, its downsides, as well as odc meaning in software development before choosing to work with an onshore partner.


Better Communication

Probably the greatest benefit of working with an onshore custom software development partner is that it gives you more open communication lines. Besides being in the same time zones, you’ll also be likely to speak the same language, as well as enjoy the same internet connections. This means that you can even plan for scheduled maintenance at the same time because communication is seamless, as opposed to working with foreign teams.

Other advantages of better communication lines include regular meetings and fewer product iterations to enhance quality consistency. Most importantly, you get to resolve issues as they arise to minimize any downtime.

No Cultural Barriers

Onshore dedicated models allow you to bypass the challenges of cultural obstacles when it comes to project fulfillment. For instance, working with local teams means shared cultural beliefs, holidays, religious beliefs, or even a political environment. This streamlines the working relationship, which can increase the speed of product development, as well as deployment to the market. On the other hand, a foreign team may share a different or diverse culture that sometimes may not be in line with your company’s goals and beliefs.

Guard Your Intellectual Property Rights

Working with an onshore software development center bounds your company to the same intellectual property laws followed by the contractor because you are operating in the same country. Thus, you’ll spend less time and resources safeguarding your data and information because the software development company must comply with the local laws, protecting your intellectual property. This can save you from losses, serious economic damage, and impeded business growth, given that intellectual property and trade secret thefts account for  nearly $540 billion in losses per year, in the US alone.

Better Product Quality

Onshore software development contractors have extensive knowledge of your local market and target audience. This means that they can build tailored software products that embody your business needs and expectations from all angles. In the long haul, you end up with a high-quality product that would otherwise consume a lot of resources and time if an offshore team was to build it. Moreover, it can be challenging for a foreign team to understand your local market needs and demands.

In-Person Collaboration

Onshore software consulting firms offer the possibility of in-person meetings whenever there is a need. Greater face-to-face availability means that contractors can onboard development teams faster to your project and even lower the learning curve so that your offshore mobile app development team can hit the ground running.

Although offshoring companies can also offer in-person meetings, it can be pretty costly in terms of transport, especially if you are located in different countries. At the same time, video meetings and conference calls may not suffice when it comes to discussing intricate project requirements or streamlining contract agreements on short notice.

Coordinated Work Schedules

Onshore software developers work in the same country as you, which means shared business hours. This allows you to work closely with your extended teams and even offers better perks because you can easily account for their work input. Even better, you can enjoy better retention rates with lower attrition due to close working relationships. As a bonus, you can resolve issues in real-time to minimize losses whenever there is a downtime in your software product.


A Smaller Pool of Talents

The biggest disadvantage of working with an onshore software development model is access to a smaller pool of talent, as opposed to the offshore model. Typically, you’ll be limited to the talents within your region only, which might not include specialized experts in emerging IT fields, such as big data and predictive analytics. Even if you find a specialized talent, the cost of hiring them can be pretty higher than your budget because their services are in high demand too,

The Costs Can Be Higher

The services of an offshore software contractor are tied to the same economic environment as your business. This goes even without saying that onshore software developers will charge higher rates than their offshore counterparts. Nonetheless, the costs might still be lower, compared to retaining an in-house team on a monthly payroll.

Backdoor Offshoring

Although businesses are often careful when picking their partners, some are not usually lucky. You can end up working with an onshore service provider who ends up outsourcing your work to an offshore team. The management team may be in your country but their developers may not be, which means you won’t enjoy all the benefits of onshore software development.

How to Migrate a Software Development Project from Offshore to Onshore

Just like moving your entire company operations to a foreign country, migrating your whole software project or part of it from offshore to onshore can be pretty daunting. The challenges are just as numerous as the benefits. Nonetheless, here are some tips to help you get started:

  • Test-Drive the New Service Provider

Regardless of the reasons why you are moving your software development project from offshore to onshore, it will help if you determine whether your new potential service provider is up for the task. That said, you would want to test them with a new project to see whether they’ll offer better results than your offshoring partner. In other words, it will help if you know what you are getting into before committing to the whole ride.

  • Prioritize the In-Progress Deliverables

The highest priority when moving your software project from offshore to an onshore center should be on the in-progress deliverables, to ensure that they are not compromised. With that in mind, ensure that the new onshore partner understands which parts of the projects are in progress and how soon you want them delivered. There is no need of migrating if the partner can’t deliver within the expected timeframe, especially if the whole project is time-bound.

  • Budget for Additional Expenses

As noted earlier, onshore development can be more costly than working with an offshore model. Moreover, you might also incur additional costs because the two teams have to collaborate for a while during the knowledge transfer. Ensure that your budget can sustain this, as well as ongoing projects after the transition.

  • Have a Plan

Migrating from offshore to onshore development will not be successful if you don’t have a plan, no matter how much time you spend researching the most viable onshore IT partner. Ensure that you plan extensively for any project transition, down to the detail. It will also help if you have a backup plan in case the transition doesn’t work as intended but the project has to continue regardless.

Find Your Best Onshore Development Team With Newxel

Newxel is a reputable service provider for onshore development teams, and we can help you harness the possibilities of the latest IT innovations to drive product innovation in your company. Newxel prides and architects its dedicated teams’ services on transparency and a greater level of customization to ensure that we at least meet, if not exceed your expectations.

We have access to a wide pool of value-matched talents in Ukraine, Poland, Portugal, Romania, Canada, Bulgaria, or any part of the world where you would want your team to operate from. Even better, we can onboard any tech stack role in your team and have it up and running in 3 to 5 weeks, depending on project requirements.

Newxel can help you build a team with a higher retention rate (94%) to ensure quality consistency.

Choose Newxel today and benefit from a swift recruitment process, full financial & legal transparency, and greater flexibility when it comes to staff engagement or substitution.


What is onshore in software development?
Onshore meaning in software development refers to a service provider or contractor working in the same country as the primary business.
What is the difference between onshore and offshore software development?
While onshore development entails working with local contractors bound by the same laws in your country, offshoring involves outsourcing your software development project to a foreign company, usually as a part or whole.
Is it possible to migrate a software development project from offshore to onshore?
Yes, it's possible to move a software development project from offshore to onshore, especially if you have an in-depth understanding of onshore meaning in IT industry, as well as a meticulous plan to handle the whole transition.
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