Why Nearshore Development Could Work for Your Company
Remember the story of Goldilock’s and the Three Bears? After entering the bears’ empty home and first trying a bowl of porridge that is too cold and then one that is too hot, Goldilocks settles on the one that is "just right." She moves on to chairs and beds in the house finding them to be too big, too hard, or too soft, until she discovers those that are "just right." While many believe the moral of this children’s story is to learn to respect privacy and personal property, one could make the case that it’s actually about doing your research until you find a "just right" solution that makes you happy.
In the world of outsourcing software development, consider nearshoring the new "just right." Here are 11 reasons why you should keep nearshoring in mind when staffing your software development team:
Benefits of Nearshoring
1. Lower Labor Cost
Nearshoring allows companies to tap into a global talent pool without the high expenses associated with hiring within the US. For example, US organizations can save an average of 38% to 48% in labor costs by outsourcing IT functions to Central and South America.
2. Improved Collaboration
The proximity of locations helps minimize most of the cultural and language barriers that can cause significant issues in offshoring solutions. In-house and outsourced teams can collaborate more successfully to achieve the engagement, flexibility, and innovation needed for agile software development.
3. Reduced Travel Costs
When your outsourced team is close to your office, it’s easier and cheaper to have in-person meetings, which help facilitate collaboration. Less time in the air also means more time on the ground working, improving project focus and productivity.
4. Easier Scheduling
Minimum time zone differences significantly help simplify communication and coordination. Whether it’s virtual meetings, email communications, or in-person meetings, it’s much more efficient to coordinate everyone’s schedule when there’s more workday overlap.
5. Larger Talent Pool
You can access a trove of global technical talent and find resources with specialized expertise by outsourcing dev projects to nearshore software development teams. This is a great way to bridge skill gaps, especially for one-time needs.
6. Improved Code Quality
Smoother collaboration, minimum language barriers, and access to world-class talent and technical skills contribute to high-quality deliverables. The proximity also makes localization easier, e.g., better-designed user-facing components that reflect the local culture, language, regulations, and preferences.
7. Better Communication
Nearshoring allows you to access a bilingual community of professionals with a similar cultural background to ease communication. Besides reducing misunderstandings that can lead to costly errors, communications through ticketing systems, emails, video chats, or project management apps can be responded to in a timely manner to minimize delays.
8. Seamless Integration
Whether you’re using a dedicated team or an extended team, familiarity with each other’s cultures and languages can facilitate a more harmonious integration of the outsourced resources with your in-house team — making it a virtual extension of your technical department.
9. Trustworthy Infrastructure
For most US companies, nearshoring means working with technical teams located in Latin America. These countries are experiencing a boom in IT resources and infrastructure that can support various software development services. For example, there are more engineers graduating in Mexico than in the U.S. every year.
10. Competitive Edge
Nearshoring helps introduce new ideas and processes that can spark "disruptive outsourcing" — an outsourcing model that goes beyond cost-saving and performance improvement to creating innovation and overcoming fundamental technical challenges for advantage over competition.
11. IP Protection
Protecting your intellectual properties is critical when you’re developing software applications with proprietary functionalities. However, many IP laws in East European and Asian countries may not offer the same protection as those in nearshore counties, such as Mexico, which has strong IP laws that closely resemble those in the US. They offer similar protection as if you’re developing the software in the US.
While nearshoring offers many benefits, it still has some shortcomings that can only be overcome by using an onshore team. What if you can get the best of both worlds?
It’s possible when you use a hybrid software development agency that offers onshore management by U.S.-based team members with development services by teams in neighboring countries.
This model can reduce overhead costs associated with hiring an in-house management team and minimize issues associated with coordinating resources located in a different location. You can access specialized expertise and fill skill gaps whenever the need arises to support an agile development process so you can respond to market demand nimbly without being bogged down by a large in-house team or administrative tasks.