The Power of Nearshoring in 2021

Javier Minsky
Posted by Javier Minsky on Dec 4, 2020 12:40:29 PM
  • The work-from-home trend accelerated by the pandemic is likely to reflect in the software nearshoring industry.
  • Nearshore partnerships allow companies to develop long-term strategic relationships with talented and experienced software teams from countries that share similar cultural mindsets.
  • Nearshoring is becoming more attractive since it combines the best aspects of the “traditional” offshore and onshore partnerships.


In the past few months, while we all witnessed how the coronavirus crisis accelerated some of the trends that were already underway in the market, companies have been forced to overcome some of their prejudices in order to adapt. Most of the negative preconceptions associated with remote work that remained -such as poor communication or decreased productivity- have been practically erased. As businesses adjust to the “new normal”, it is becoming clear that these changes will lead to the rapid growth of the IT outsourcing industry.       

Cost-effectiveness used to be the primary reason for companies to seek out outsourcing services. But with the fast-rising of demand for software products, talented tech teams have flourished in different parts of the world. By involving in nearshore partnerships with teams that are geographically and culturally closer to them, it has become easier for companies to leverage some of the other competitive advantages that outsourcing can offer, such as increased flexibility, access to top-notch expertise and innovative workflows, and faster and more effective development processes.

This is why a sharp growth of nearshoring is expected for the post-coronavirus recovery of 2021, and beyond. In the years to come, building effective, long-term, and mutually beneficial relationships with nearshore software partners will be crucial for the future success of businesses in our global digital economy.

Combining the best of both worlds  

Today’s digital market is extremely challenging. With demands constantly changing, both big companies and startups are growingly getting interested in developing partnerships with experienced and talented remote software teams that are helping them remain adaptable. This trend is likely to keep on rising as we enter into the post-pandemic era. But, what are the advantages nearshoring offers? Today, nearshoring is more and more being perceived as a model that can integrate the best aspects of the other two types of outsourcing services that we already know: onshoring and offshoring.

Building a network with skilled teams from nearby countries

On one side, there is the traditional argument in favor of outsourcing: the cost-saving opportunity it offers. For a while now, it has not only become harder for companies to find onshore software partners that can help them save costs as their need for software products keeps growing, it has also become unnecessary. The expertise acquired by tech workers in countries all around the world enables software partners from nearshore countries to deliver top-level software products - at considerably lower costs.

Also, language is of course a huge issue when deciding who to partner with. But in countries with high English proficiency, the language barrier ceases to be a problem. Instead, they add well-valued diversity to companies.

Finally, in a deeply interconnected global economy, building networks with partners from different countries is helping companies develop a wider international presence, by contributing to their expansion into new markets.  

The importance of sharing cultural values and similar time zones

Since the most innovative workflows used in software development these days demand an ability to continuously adjust and adapt to new challenges, effective communication with developers made possible by nearshoring has become absolutely necessary. While offshore partnerships constantly suffer from dephased communication due to time zone differences, partnering with teams with similar or the same time zone allows for real-time problem-solving.

And there is also the issue of cultural obstacles. Nearshore partners with similar cultural mindsets and management practices that are aligned with a company’s professional culture are always more able to guarantee fluent and effective communication - which ultimately means on-time deliveries and higher quality products. 

The sharp growth of nearshoring in the immediate future

In the “new normal” of our digital economy, nearshoring is becoming an essential tool for companies across the world. With the companies growingly leveraging the competitive advantages offered by nearshoring, the “traditional” outsourcing relationships based on short-term results are evolving more and more into strategic, long-term partnerships with nearshore software teams. 

 

This fast growth of the nearshore industry means we’re only at the beginning of a new era in the global digital economy, in which any company interested in improving its competitiveness in this challenging market will be able to benefit from the advantages of outsourcing on an unprecedented scale.

Topics: Nearshoring

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