Offshore outsourcing is when you hire a company from a different part of the world. This is often what people first think of when they consider outsourcing.
A lot of businesses in the UK outsource offshore to India. Offshore outsourcing often has very cheap hourly / day rates and can make nearshore and onshore outsourcing look expensive in comparison. However, these projects often end up being more expensive in the long run. The potential language barriers and time difference can make communication difficult, which can result in higher project costs and longer development time.
They usually have large talent pools to pull people from, which gives you access to the skills you need. However, it is common for these companies to have high churn rates which can result in knowledge loss and a lack of continuity in your project.
Onshore outsourcing is when you hire a company in the same country as you. These projects usually have a higher hourly / day rate than the other options. However, the lack of language barriers and cultural similarities usually allow for better communication and project management – which saves you money!
Having a skilled team nearby in your own timezone is advantageous, and it is easier to have face to face meetings and discovery sessions.