Difference Between Onshore, Nearshore and Offshore Data Processing
iTech Data Services

Onshore, Nearshore and Offshore Data Processing: What’s the Difference in these Data Processing Strategies?

02Sep
Read Time: 3 minutes

As with many projects in the business world, outsourcing is often the most practical solution in terms of cost, timeline and quality. A company or organization may not have the need or desire to hire someone to perform a particular task in-house. This is frequently true for data processing projects. But determining the best data processing strategy can be challenging. Business leaders are left to make a decision of where to outsource that project: onshore, nearshore or offshore. 

The best data processing strategy will depend upon factors like your project specifications and needs, budget and timeframe. Let’s look at how onshore, nearshore and offshore data capture and other data processing services compare. 

Data Processing Strategies: Onshore Services

Onshore data capture services involve an in-country service provider that oversees the data entry, data cleaning and data unification process. This third-party data processing service provider may be local or across the state or even across the country. 

Onshore data processing service providers are usually selected for projects involving data that’s sensitive in nature. An onshore solution is a popular choice when an organization has special security needs or is governed by stringent government regulations and requirements. That’s because onshore data capture and processing service providers will be familiar with the data handling protocols that are necessary in these cases. 

Onshore data processing strategies are ideal for companies that require lots of back-and-forth communication with contractors and those that prefer to work with service providers in a nearby time zone.

The quality of an onshore data capture service provider will vary, but reputable, well-established companies can deliver a very high quality. The downside of onshore data processing is the cost, which can be rather high in nations such as the U.S. and Canada. 

Using a Nearshore Data Processing Strategy

Nearshore data capture services involve outsourcing your data processing project to a third-party company in an adjacent nation. Let’s say an American company was to hire a Canadian data processing firm to convert their paper documents into a digital database; this would be an example of nearshore data capture. 

Nearshore data processing services are great for companies that want to take advantage of the cost savings associated with outsourcing, while bypassing some of the challenges. Nearshore service providers may be in the same or a nearby time zone, allowing the business to avoid the delays of working with a service provider on the other side of the planet. 

Adjacent nations are more likely to share a common language and cultural similarities. This translates into distinct communication advantages for companies that choose to hire a nearshore service provider. 

If the nearshore data capture project is awarded to a company in a bordering nation with a lower cost of living and/or a favorable exchange rate, you may see significant cost savings over an onshore company. In most cases, the cost of nearshore projects is a middle ground option that’s less than onshore, but higher than offshore. 

Offshore Data Capture Services and Data Processing Strategy

Offshore data processing is widely favored for its affordable cost, made possible by factors such as a lower cost of living and/or favorable exchange rate. This data capture solution involves working with a service provider that’s located outside of your nation or the bordering countries. 

The quality of the data processing services will vary from company to company, so it’s important to consult references and perform good vetting of a prospective offshore service provider. 

There are some potential drawbacks to offshore outsourcing, like language-related communication challenges and communication delays due to different time zones. But a reputable offshore data processing company will be adept at overcoming these obstacles and minimizing their impact. This is yet another reason why vetting is so critical if you’re seeking a firm that goes the extra mile to ensure your project goes smoothly. 

Choosing the Best Data Processing Strategy for Your Outsourced Project

The right type of outsourced data processing service provider — onshore, nearshore or offshore — will depend on your budget, timeframe and the very nature of your data. There’s no one-size-fits-all solution and vetting is vital because you’ll need to have full confidence that you’ve chosen a reputable data capture service provider who can meet your unique needs. 

At iTech, we specialize in providing smart data capture automation and outsourced data entry services. If you have questions surrounding iTech’s services or would like a demonstration of our automation solutions, simply fill out the form below, or email us at info@iTechData.AI.


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