Have you ever wondered why so many organizations choose to look for IT services in other countries? It’s simple: most companies are striving for the highest quality of service at the most affordable price. Some businesses choose to offshore outsource, but cultural differences and time-zone problems can hinder productivity and negatively affect both teams and business in general.
The answer to this problem is nearshore outsourcing. In this article, we will take a look at nearshore outsourcing and uncover why it rises above the other outsourcing models in terms of cost, quality, and productivity.
Nearshore outsourcing (nearshoring) is the process of a company outsourcing services to completed by people in nearby countries rather than where the company is located. For US companies, nearshore partners may be located in Latin America.
Nearshoring is a form of outsourcing that typically refers to the delegation of IT-related work. The most commonly outsourced jobs are software development and technical support.
Nearshoring is not to be confused with offshore outsourcing, commonly known as offshoring. Offshoring is the process of outsourcing jobs or services to foreign companies that are typically located in more distant parts of the world. US companies might offshore in Asia or the Ukraine, for example.
Offshoring is often the most affordable outsourcing option. There are many countries with the vast talent pools and low hourly rates, which enables businesses to hire high level developers, all while saving money. However, offshore outsourcing comes with its own challenges including: decreased efficiency because of language barriers, contrasting time zones, and vast cultural differences. The time-zone differences can cause problems with with coordinating workflows and establishing processes, while language and cultural barriers can hinder the efficiency of your team.
Onshore outsourcing, or onshoring, is a model of outsourcing in which companies to hire workers from outside their organization (but inside their country) to work for them on specific tasks. In the onshoring model, the developer is from the same country which has both advantages and drawbacks.
Some of the benefits of onshore outsourcing are that both the client and developer live in the same time zone, speak the same language, and likely share similar cultures norms.
The most obvious disadvantage of onshore outsourcing is the cost. Onshore outsourcing is not nearly as cost-effective as the two other models of outsourcing. In general, companies that outsource work are often based out of developed countries. In turn, this means that the price of work is significantly higher.
Nearshore outsourcing, or nearshoring, is the best of both worlds. The nearshore outsourcing model focuses on sourcing from a diverse talent pool in a nearby location or neighboring country. For example, the US might nearshore in a country like Latin America.
Nearshore outsourcing widens the talent pool and allows businesses to find and source top talent that works the same hours of the day as their onshore team. In addition to time zone similarities, nearshore outsourcing also ensures that teams can be more efficient because of similar cultures and reduced language barriers.. Nearshoring brings many of the benefits of onshoring, while being far more cost effective.
The benefits of shared language and culture, time zone similarity, and the opportunity to hire professionals at a lower price point make nearshoring an extremely popular choice in the world of outsourcing.
Our world is constantly evolving. Technology is continually updating and reinventing itself. It is obvious that outsourcing top talent is a great solution for helping companies keep up with their competitors. Nearshore outsourcing is an effective way for businesses to increase company efficiency and expand work capacity.
Nearshore software development also provides a solution to one of the biggest obstacles in IT outsourcing: maintaining an agile development process while collaborating with your vendor. number8 launched in 2008 when our founder saw how difficult it was to adopt an agile methodology while working with a traditional offshore partner. It has since been our mission to provide cost-effective outsourcing options to agile companies.
number8 provides cost-efficient access to highly skilled and versatile software developers to help you speed up development velocity, so you can focus on what’s really important, delivering on time and on budget.
To learn more about our software development solutions, visit www.number8.com.
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Your ultimate guide to nearshore software development. Learn the key differences between nearshore, offshore, and onshore, the technical processes that can make offsite developers more productive, and how to choose the right nearshore vendor based on your needs.