Northern California: A National Tech Hub
The tech industry is one of the most important contributors to the Northern California economy. In order to continue developing high paying jobs, information and technology companies outsource operations to streamline processes and cut down on costs. Traditionally, Silicon Valley managers have looked to India for their outsourcing needs. However, there are various cultural issues when outsourcing to India.
Drawbacks of Offshore Outsourcing
- Communication Issues – It’s hard enough translating programming concepts to clients and establishing milestones. You are bound to run into issues communicating with programmers who speak a different English dialect on top of that.
- Time Loss – There is almost an entire day’s worth of time lost between San Francisco and Mumbai. When working with developers in India, take the loss of time into consideration when establishing project parameters. While the idea of planning a day ahead of schedule sounds great in theory, in practice we know that unexpected issues always require up-to-the-minute communication with programmers.
- Spaghetti Programmers – The vast majority of coders in the Indian outsourcing market train to churn out work as quickly as possible. The term “spaghetti programming” refers to the code they produce; it loops round and round into a jumbled mess and if anything goes wrong, it’s very difficult to trace steps back and fix it.
- Hidden Costs – An abundance of cheap, quick labor produces systems without structural integrity od proper checks. A system like this will eventually crash, leaving people in charge of small to medium-sized projects scrambling to fix it. Project managers end up spending the same amount of manhours they originally outsourced fixing the problem, sometimes doubling the cost of operations.
Nearshore Outsourcing: Solving Offshore Issues for Silicon Valley
Despite the issues that come with offshore outsourcing, Northern California businesses still need to reach their demands for tech talent. The United States systematically fails to produce homegrown programmers and coders. Without these workers, operations halt and business growth stagnates.
Operations managers in Silicon Valley are turning to nearshore outsourcing to bridge the gap between the lack of tech talent and their business’s needs. Nearshore outsourcing finds talent in countries close to the U.S. such as Honduras and Costa Rica. There are various advantages to nearshore outsourcing.
Benefits of Nearshore Outsourcing
- Smaller cultural margin – The culture in India is very hierarchical; because of this, workers tend not to take initiative on projects. They hesitate to think beyond their instructions. In many ways, the culture in Latin American culture closely aligns to that of the United States. Additionally, the English dialect studied in Central America is closer in line with that of the United States, whereas in countries like India they learn the British dialect. It may seem like a small difference, but the difference in dialect is a major barrier to effective communication.
- Less time overlap – While there is an entire day’s difference between Silicon Valley and Mumbai, there is only an hour difference between San Francisco and Costa Rica.
- Agile development – Nearshore programmers in Central America train in the methodology of Agile software development. Under the values and principles of agile software development, operations evolve though self-organizing cross-functional teams and collaborative effort. That means when something goes wrong, there’s no starting from scratch. Agile development is about motivated individuals working in real time and creating working software that evolves with business needs.
- Lower costs – Nearshore combines the cost efficiency of outsourcing with the convenience of real-time communication. Higher productivity cuts down on overall costs and requires less backtracking. Furthermore, with nearshore outsourcing, supervisors in charge of development projects are able to directly oversee their teams. Flights from Northern California to Central America are quick and relatively cheap.
At Number8, we help Northern California tech businesses connect with agile software developers in Central America. Our teams–both foreign and domestic– provide cost-effective services minus the difficulties and risks that come from offshore outsourcing. If you’re interested in learning more about Number8 and what we do, give us a call at (502) 890-7665, or check out our information page here!