In the current 4.0 era, information technology (IT) is an indispensable part of the structure of enterprises. The form of IT outsourcing is therefore increasingly popular and widespread around the world. So, what is the trend of IT outsourcing, what are the characteristics of the types of IT outsourcing, and which type is most suitable for businesses at present, let’s find out with Luvina in the following article.

IT Outsourcing has 3 main types: onshore, nearshore, and offshore. Each type has its own characteristics and is suitable for different business fields of enterprises.

Let’s learn about the types of IT outsourcing services in the following sections.

Onshore IT Outsourcing

Onshore outsourcing is a form of hiring an outside company, organization, or freelancer to provide IT services right in the country. In other words, this is a form of domestic IT outsourcing.

 

The biggest advantage of an onshore IT outsourcing service is that there are no barriers of language and customs because they are in the same country. In addition, this type of IT outsourcing does not encounter obstacles in terms of time zone and time compared to cooperating with foreign companies.

However, this type of IT outsourcing has some disadvantages that businesses need to consider such as the cost may be higher than choosing offshore or nearshore outsourcing, and the domestic human resources are somewhat limited. On the other hand, nowadays offshore outsourcing service providers have and are developing a diverse international language system, some can provide 24/7 service to compete directly with onshore IT outsourcing.

>> Also Read: Offshore vs. Onshore Software Development

Nearshore IT Outsourcing

Nearshore IT outsourcing is a form of hiring an outside company, group, or freelancers operating in a neighboring country or a country with a similar time zone.

The advantage of nearshore IT outsourcing service is that it minimizes the barriers of customs and habits because it is a neighboring country so there will be similarities in culture. Besides that businesses will also receive service support anytime because there is no obstacle in terms of time zone and time. Currently, this type of nearshore IT outsourcing is very popular because of another big advantage that is the tax is not too high as outsourcing IT services from farther countries.

Although there are many advantages, businesses also need to pay attention to the disadvantages of nearshore IT outsourcing such as language barriers, political instability in the country, and differences in legal or quality fluctuations in the process of providing IT services.

>> Also Read: Choosing the Right Nearshore Software Development Company

Offshore IT Outsourcing

Offshore IT outsourcing is a service of hiring an outside company, organization, or freelancers in a different continent or a country with a different time zone – places that are geographically far from the market that consumes and uses the service.

The biggest advantage of this type of IT outsourcing is to take full advantage of abundant human resources, and lower costs than producing onshore services. Businesses can thus save most of the investment costs for developing and maintaining information technology activities. This is the most popular type of IT outsourcing, often applied by developed countries to outsource IT human resources from developing countries. It can be mentioned that developed countries such as Japan, the USA, UK… all use this type of IT outsourcing from countries such as India, China, Vietnam, and Hungary… to save costs.

However, businesses using offshore IT outsourcing services have to face the problem of geographical distance, leading to barriers in terms of language communication, training human resources, quality management, and service delivery schedule.

>> See more: The Ultimate Guide to Outsourcing Software Development Offshore

IT Outsourcing in Vietnam, why not?

In times of economic difficulty, high market competition, tight spending, reducing IT staff, and limiting training activities are the choices of most businesses today. However, this sometimes will affect the development and even the survival of the business.

To solve this difficult problem, using IT outsourcing services will be a perfect solution, helping businesses solve human resources and cost issues, while still ensuring productivity and work efficiency. Currently, Asia is dubbed as the “tiger” in the market for providing types of IT outsourcing. According to Tholos 2022, Vietnam leads Asia in the top 100 countries with the best IT outsourcing service.

Some benefits of outsourcing IT in Vietnam can be mentioned as Ensuring high expertise with a professional work style. Reducing internal human resources costs, and competitive costs with onshore and nearshore types of IT outsourcing. Supporting businesses 24/7. Supporting multiple languages, operating on multiple platforms with high expertise. As one of the top Vietnamese software companies providing quality IT outsourcing services that meet Japanese standards, Luvina has been and is accompanying businesses in the fields of Fintech, Healthcare, Logistic, Retail, and E-commerce in the APEC market and the US market, with the commitment:

• – Excellent and stable quality that has been recognized by hundreds of Japanese customers since 2004.
• – Flexible team that allows you to choose the working model and technology that suits your requirements.
• – Infrastructure that complies with international standards, ensuring the highest level of protection for your IP.

>> See more: Prominent Offshore Development Center Destinations

Conclusion

In general, there is no clear answer to the question “Which type of IT outsourcing is suitable for businesses?”. Choosing types of IT outsourcing or using an in-house team depends entirely on the needs and finances of the business. The key to helping businesses develop and expand is to consider each advantage and disadvantage, learn about the services of outsourced companies, and understand their own company. If you feel that offshore IT outsourcing is the most suitable type for your business, don’t forget to check out Luvina and other offshore companies in Vietnam right away.

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