The Nearshoring Model: Building Business Resilience in an Unpredictable World

The ability to build resiliency is a crucial element to thrive in our growingly competitive global and digital economy. And as the outbreak of Covid-19 spread levels of uncertainty that had not been experienced in a long time, the strength and adaptive capacity of businesses from all over the world were put to the test. Partnering with developers from geographically and culturally close countries is one of the main strategies adopted by companies that aim to build more resilient structures. By allowing them to meet their cost-effectiveness goals while at the same time gaining access to some of the best IT talents in the world, nearshore partnerships offer companies the opportunity to adapt faster to constantly evolving demands, enhance their competitiveness, and create better conditions for sustainable growth. But let’s begin by defining what exactly is nearshoring.

The role of nearshoring in the rising IT outsourcing market

In the last few years, the IT outsourcing market has been growing fast, with more than 50% of businesses partnering with IT specialists to develop and maintain their applications. In this context, among the three variants of the outsourcing model -onshoring and offshoring being the two others-, nearshoring has stood out for its capacity to combine the best features of the other two.

Mainly because of its cost-saving benefits, offshoring -which happens when companies partner with teams from distant countries-, used to be the most attractive alternative. But a shift of focus from price to value and results, along with the rise of new tech hubs in a wider variety of locations, has caused, in recent years, a steady increase in nearshore IT partnerships. Nearshore is not only cost-efficient but rather has other advantages that we would like to highlight. These gains are usually overlooked and can mean a step forward into building the kind of strong, flexible, and resilient company that the complex world we live in demands.

- Gain focus by relying on innovative talent

The IT industry is especially challenging when it comes to recruiting talent. The skills required to excel at software development are constantly evolving, and therefore developers are compelled to constantly be learning new things and acquiring new experiences. The variety of projects in which developers from nearshore partners usually have worked means they are likely to have a broad background and exposure to the most recent developments in the industry.

For example, data privacy and cybersecurity issues have been of great concern for all types of companies in recent times. For a great deal of them, the skills of experienced developers from nearshore teams have become a crucial resource to limit risks and improve their security protocols. When you can find a software partner on which you can rely to solve issues of this level of importance, your team can focus its attention on what they do better and what is core for your business.

- Avoid issues concerning cultural differences and geographical distances

One of the problems of partnering with teams from distant countries is the negative effect of time-zone gaps. Difficulties in scheduling meetings and non-overlapping business hours are usually obstacles when dealing with the various complexities of a software development project. The same goes for cultural incompatibilities and language barriers, which can cause different types of communication issues, and even threaten projects at some of their milestones.

Nearshore partners, for their part, share the same or at least a similar time zone, so there are no issues on that point. But regarding the cultural aspects, when you choose a software partner, you should always make sure that the team members are highly proficient in English and that they share a similar cultural mindset with your team. These two key features will facilitate a smooth and productive relationship between your in-house team and your software partners.

- Gain flexibility, build resilience

Finally, let’s take a look at a core feature when you aim to build a resilient business: flexibility. When a company remains flexible, it is better suited to adapt to changing demands and cope with disruptive or unexpected events. In this sense, training and maintaining an in-house development team can be highly costly and inefficient. On the contrary, by partnering with a nearshore team, you can complement the skills of your current team with a staff augmentation strategy. A mixed team of in-house employees and external IT engineers will allow you to expand your teams without the need of dealing with the high costs of hiring professionals internally. Besides, cultural similarities and geographical proximity will make it easier for your nearshore partners to establish a fluid and complementary relationship with your in-house team in a relatively short period, which makes Nearshoring a much more suitable option than Outsourcing.

If we are to gain a valuable lesson from this pandemic, it is how important it is to build structures that can withstand unforeseen turmoils without losing their essential goals and values. This is why companies are bound to become more resilient after this experience. And as the economic landscape keeps changing, finding teams from nearshore countries to establish productive and long-lasting partnerships could be a crucial strategy when you aim at becoming strong enough to survive and thrive in the challenging world ahead.