nearshore outsourcing

Why Nearshore Outsourcing Will Be The Next Hub For US Companies Software Development Services

nearshore outsourcingOutsourcing Software Development Services

In the United States, the Information Technology (IT) and Software Development sectors have been bridging the gap between company growth and lack of manpower using outsourcing. Outsourcing sends work to technology professionals who are not employed in-house by the company. However, they are capable of completing the tasks at hand and often have freelancing rates that they then charge the company whose services they completed. There are three kinds of outsourcing:

  • Onshore outsourcing – using a software development provider located in your own country. In the United States, this often works by using a firm in another state. For instance, a company located in Silicon Valley may outsource some customer service workers in Texas.
  • Nearshore outsourcing – finding a firm to fulfill IT or software development needs in another country, however one that is only a relatively short distance away so the time zones are comparable. In the United States, many companies outsource to agencies located in Central America.
  • Offshore outsourcing – using programmers and IT managed overseas in a different time zone on the other side of the world. IT work is very affordable in Asian countries such as India and China.

Nearshore outsourcing and software development combines the benefits of onshore with the cost-effectiveness of offshore. Reducing the physical distance between the teams allows for more effective communication and less of a cultural barrier. In return, there are less delays in projects and teams are able to work during the same hours, meaning less monetary loss for the company.

Nearshore Outsourcing as a Hub

A technology hub doesn’t have a neat definition, but Marketplace Tech’s Ben Johnson makes a pretty compelling argument that a hub should have four things:

  1. Government support
  2. Homegrown talent
  3. Venture Capital
  4. Culture

For comparison purposes, we are going to use San Jose, Costa Rica (where one of our nearshore offices is located). The headlines speak for themselves…

Government support? 

Mayor of San José, Costa Rica Promotes the Creation of a Hi-Tech City

Home-grown talent?  

Women’s Hackathon takes place in San José

Venture Capital?

A dozen founders and funders to watch in Central America and the Caribbean

Culture?

San Jose Pursuing Dream Of Being Friendlier, More Modern City

Costa Rica is one location that proves nearshore outsourcing is not only beneficial to tech companies in the United States. Thanks to the nearshore outsourcing opportunities that are flowing into the country, the country itself is able to grow and thrive. All-in-all nearshore outsourcing has all of the benefits of hiring in-house employees and outsourcing work to freelance workers. Plus, it helps the economies of not one, but two countries grow simultaneously.

At Number 8, we believe in the up-and-coming tech hubs that benefit from nearshore developing. 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!