Today, most companies recognize the importance of developing long-term partnerships with outsourcing IT providers that can help them meet their software goals while saving costs. However, it may sometimes be tricky to understand the differences between the three types of outsourcing partnerships -onshore, offshore, and nearshore- and their pros and cons. In this article, we will focus on the benefits of nearshore outsourcing development, and we will see how this particular model can offer companies the advantages of the onshore and offshore models while at the same time avoiding their most common problems.
Nearshoring, Onshoring, Offshoring: What is the Difference?
First things first: what exactly is nearshoring? As we said, nearshoring is a particular type of outsourcing defined by the fact that the IT processes are transferred to a software partner not located in the same country (that is, onshoring) but in a nearby country that usually shares similar cultural traits. Remember, offshoring happens when you partner with a country that, on the opposite, is located far away (geographically and culturally speaking). Below, we have outlined some of the main benefits of involving in partnerships with nearshore software companies.
Real-Time Communication and Problem Solving
Even though the advances in communication tools from which we all benefit every day have significantly reduced the importance of geographical proximity, time-zone differences are still a major issue. This is especially true when you aim to establish deep, productive, long-term relationships with a partner, which requires constant and fluid communication.
While time-zone gaps with traditional offshore locations make it rather difficult to hold frequent online meetings, sharing the same or a similar time-zone allows for real-time communication. And although this benefit is crucial at every step of a development process, it is particularly valued when dealing with those problems that require real-time solutions and cannot wait long hours before your partner’s workday begins.
Common Cultural Mindset and akin Workplace Culture
But online meetings and real-time problem solving are not enough to ensure good communication with a partner. Developing a great software partnership requires commitment and synergy; it requires both your team and your partners to have the ability to merge into one joint force. And to this end, your partner should be able to grasp the essence of your company, to develop a deep understanding of your main goals and values. This can only be achieved by a team with a shared cultural mindset. In this sense, nearshoring stands out as compared to offshoring.
For companies in the US, there’s no place in the world where they can find a workplace culture more akin to theirs than in Latin America. Proactiveness, a proneness for innovation and creativity, and the importance of relationships based on mutual trust are some of the most relevant and common features of Latin American teams of software engineers. In addition, some countries in the region are among the highest-ranked in the global English Proficiency Index.
Access to Talent, Expertise, and New Technologies
Saving costs used to be the main reason companies turned to outsource providers from other countries, especially since onshore providers became more and more expensive. But as companies understand these days, developing an outsourcing partnership is not only about cost-efficiency: it’s about gaining access to those skills and talents that will help your company improve its competitive advantages in the long term. This is particularly challenging when it comes to software development because those skills are dynamic and in constant evolution.
Latin America holds some of the most talented IT professionals in the whole world. Many software development teams have members who have studied or received training in the US, which means they are familiar with its software culture. Also, consider that these teams are usually experienced at working on several different projects. So they can not only offer solutions for your current software needs but drive innovation in your own company, helping you introduce new technologies, processes, and best practices.
Flexibility and Focus
Keeping an in-house team of software engineers can be highly costly for startups and larger companies. On the contrary, working with an external team allows you to fill software development positions when required and free those financial assets when these skills are not needed. In addition, working alongside LATAM’s top collaborators is key when aiming for a higher-valued result. Why? Because different perspectives are richer and more efficient, which is why they always lead to better outcomes.
But flexibility is not the only aspect in which nearshoring can help you improve your human resources management. Relying on a team of expert and talented developers to take care of your software needs allows your in-house team to focus on your core business. And this is yet another point in which nearshoring clearly wins. In fact, one of the main reasons some outsourcing relationships fail is that communication issues caused by cultural incompatibilities or time-zone gaps end up producing huge wastes of time and derailing teams from their core tasks and goals.
Deciding on establishing a partnership with an outsourced development team is a huge step. Even though the variety of options available can be overwhelming, we hope the benefits outlined above may help you see how nearshoring integrates the competitive advantages offered by the other two outsourcing models.