Nearshore outsourcing companies provide services for both onshore and offshore outsourcing. It helps you invest in IT talent and project management wisely while making it easier for your business to develop high-quality products on time and without much hassle. In addition to this, it also helps in cost reduction and resource optimization.
This article will discuss nearshore software development, its importance, benefits, and key metrics to help you choose the right nearshore outsourcing organization. In addition to that, we will also talk about certain disadvantages of outsourcing your product to nearshore software development teams. So, let’s dive into it to learn more.
Nearshore software development outsourcing is the process of delegating software development projects to people in neighboring countries. Typically, the time difference between you and your outsourcing service provider should be in the range of 1-3 hours. Consequently, you get better responsiveness and improved communication, ultimately leading to project success.
For instance, Latin America is a nearshore outsourcing region for the U.S.A.’s software development companies. Some of the most popular nearshore software development teams and sites for the U.S.A. in Latin America are - Brazil, Mexico, Argentina, Colombia, etc.
Having said this, it is also important to mention that there can be several other locations (consider offshore) that can provide great software talent within your budget. Some of the locations might be in the Indian subcontinent.
It is one of the most obvious questions that can strike anyone’s mind when looking into nearshore outsourcing. So to unravel the mystery behind it, let’s quickly go through some important reasons -
If you’re on a budget constraint and there are no affordable service providers in your region, nearshore outsourcing is the way to go. In fact, the budget limitation is one of the key reasons why companies usually opt for this outsourcing model. You can start improving your capabilities without compromising quality and your services.
Nearshore software development companies help enterprises achieve a higher return on investment (ROI). This is because there is a considerable reduction in cost due to resource management like physical workforce and cost optimization, among others. Consequently, helping the organizations in the long run by maintaining the budget while keeping the net returns higher.
Organizational efficiency improves through the support of different teams and the high levels of experience and expertise that the team members maintain. It helps the organization in achieving its revenue targets and other business goals. Working with the right nearshore outsourcing company can add skilled experts to your workforce, ultimately improving the efficiency of your organization.
Nearshore software development helps in establishing effective communication between both the internal team and the nearshore team by adding values like -
Due to the geographical proximity, nearshore outsourcing service providers are usually familiar with the work culture, ethics, and practices. This leads to seamless collaboration between the in-house and the outsourced team. For example - Latin America focuses more on the Agile software development methodology, which is aligned with the U.S. approach.
Some of the key metrics that can help you in deciding what you need to consider before going for nearshore software outsourcing are -
In nearshore outsourcing, the outsourced company serves better if it is close to the host nation. Collaboration becomes effortless since the closeness reduces the hurdles like cross-cultural and communication barriers.
Technical skills are one of the crucial metrics to consider when outsourcing software development. Consider the developer's expertise in programming languages, product management, database, and among others before hiring them. Once your project requirement matches the tech stack of the nearshore software development service provider, you can move ahead with the other metrics mentioned in this list.
Proximity to the host country brings this additional feature. Since the developers come from neighboring countries, they will have better compatibility regarding cultural values and business practices. It will help both organizations collaborate better and work towards making the project successful. This helps the outsourcing organization establish better compatibility and productivity metrics going forward.
It is another benefit of nearshore software development outsourcing. For example - English is one of the primary languages in the north and south Americas. Therefore, partnering up with an outsourcing company that is familiar with the language will help the teams from both organizations foster a culture of collaboration and teamwork.
The major advantages of nearshore software development are as follows -
Nearshore software development companies have a high level of technical proficiency and the manpower to work on different projects. It can help large enterprises in solving the additional workforce requirement issue.
Nearshore software outsourcing thrives due to its day-to-day systematic approach to work. Such service providers understand the value of both time and money. Additionally, outsourcing helps companies utilize their resources for other business-critical and priority tasks.
There can be a fear of various hidden costs when outsourcing nearshore software development companies or teams. However, it is nothing more than a plain hoax. In outsourcing, the discussion around cost and budget is generally sorted out at the beginning, which includes each cost variable possible. Thus, in the long run, you do not need to worry about cost management or hidden costs.
A shared time zone helps the outsourcing organization connect and contact the nearshore software development teams during the same daylight hours. As both teams can connect and brainstorm in real time and no unwarranted delay occurs, which is not the case in the offshore model. Thus, it saves time and boosts productivity during active hours significantly.
Factors like - work efficiency, cross-cultural similarities, and efficient communication all together help achieve optimum operational efficiency. Ultimately, it's a win-win situation for the organization to outsource its software development projects.
Outsourcing to a nearshore software development company helps the organization have better control over several project modules. For example - the organization can monitor, validate, and analyze the progress made by the nearshore software development team. However, this can be very tricky and complex at times when there is no proper sync between both organizations. That’s why make sure to establish active communication channels for uninterrupted communication and updates.
On the flip side, there are some challenges as well, like -
If the distance between the regions is too far, there can be a communication gap between the teams. In addition, not keeping sound and effective communication among both internal and nearshore teams can sometimes lead to communication gaps.
Due to remote communication, technical conversations and project technicalities may suffer. This, in turn, may cause the effectiveness and lack of productivity towards achieving the goals.
Choosing the right tech stack is crucial for the project’s success. However, due to a remote setup, there can be intermediate hurdles in the selection and management of the tech stack. This can be a setback for the project itself as all the functionalities are tech-dependent.
Due to a lack of regular person-to-person meetings, the teams often may be unable to do the perfect sync they expect. This gradually causes deprecating collaboration among different teams.
This is one of the major challenges when discussing outsourcing a nearshore software development company. Due to the level of technical expertise and skill set differences, there can be several concerns concerning the overall quality of the product. Therefore, it is essential to validate this factor before partnering up with an outsourcing service provider.
Nearshore software development companies can be game changers for any organization in the long run. It can help in growth, achieving efficiency, and maintaining organizational level productivity. Therefore, if you’re looking for the convenience of onshore outsourcing but with the benefits of offshore, then the nearshore model is the perfect gateway for you.
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Abhishek is a Geek by day and Batman by night. He loves to talk about Data, and his passion encircles around Trekking, Hitch Hiking, Gardening, and analyzing Ancient Indian Texts. His geeky stuff got highlighted at Microsoft, Code Project, C-sharp Corner, etc.
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