Explore Nearshore Outsourcing: a blend of quality, cultural affinity and time zone alignment. From cost savings to seamless collaboration, discover why companies are moving nearshore.
As software development outsourcing becomes increasingly common, three main models have emerged: onshore, nearshore and offshore. Onshore outsourcing refers to contracting development to a supplier in the home country. Nearshore indicates an outsourcing partnership between organizations in physically close countries, and offshore is an agreement between companies in physically distant countries.
Talented developers
Companies often choose nearshore outsourcing when they cannot find the necessary specialization or skill set in their own country. This alternative allows organizations to connect with developers from other countries who are well-versed in certain areas and can offer hard-to-find skills.
Time zone alignment and physical proximity
In contrast to offshore developers, nearshore providers are aligned with their partners' time zones. This means your work schedules will overlap, facilitating better communication and collaboration. For example, Buenos Aires is just an hour ahead of New York City.
Nearshore partners can hold virtual meetings and use chat platforms to discuss projects in real time. This is a greater challenge for an outsourcing partner on the other side of the world, who will be in a very different time zone and have far fewer overlapping business hours, as is the case in India and the US.
Because nearshore suppliers and their contracting organizations are so close together, they are typically just a short plane ride away. This makes in-person meetings even more possible. This can make nearshore outsourcing partners an attractive option for companies that want to fully understand the inner workings and methodology of their services, as well as meet them in person, rather than simply through a video conferencing platform.
Cultural Similarities
Another reason why many companies opt for nearshore software development outsourcing is that there tend to be more cultural similarities between people in neighboring countries than between people in distant areas. Communication is easier and work styles are more aligned. This often results in a stronger partnership and the ability to meet expectations.
Furthermore, due to their physical proximity, nearshore developers often share similar working methods and values with their partners. These individuals may assume they are on the same page in terms of when they are expected to work, how and when they will communicate, the results the company hopes to achieve, and more. They can also expect to have had similar educational backgrounds, which is reflected in their work.
Business Integration
Some companies already have an in-house development team, but they may be missing some key players or need an extra set of hands to work on specific projects or during a particularly busy period. A nearshore software outsourcing provider can often be helpful in these cases. They can help with software development, quality assurance, and more.
Many organizations appreciate the ability to have an external team to integrate and work alongside their own team. This is a flexible model and companies can hire these services as needed or as they expand their operations. It's also less mandatory than it would be if you hired a full-time vendor.
Outsourcing partners will help with the tasks you assign them and will be careful not to step on the toes of the organization's full-time staff. Often the company will use its own engineering manager and other key employees to lead the project and keep everyone on track and working together harmoniously.
Lower costs
For the most part, nearshore outsourcing costs tend to be lower than those of an onshore provider. Software engineers in the US, for example, can cost between $80 and $150 per hour, while those in Latin America typically cost between $40 and $70 per hour – generally for the same level of work or even more. This results in huge savings for companies.
This is one of the biggest attractions for organizations. Not only are they able to find dedicated development teams with specialized skill sets, but they can also hire them at a fraction of the price of onshore developers. This is because salaries tend to be lower in developing countries than in developed countries, despite the large talent pool.
Companies also save money on fees like overhead, a complex hiring process, benefits, training, and of course, full-time salaries.
