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The Value of Nearshore Software Development Opportunities: Innovation & Performance

Posted on in Software

The typical mindset when considering IT outsourcing partners is to look far away, but it may be more beneficial to find a neighboring team through nearshore opportunities and not just because of the usual benefits.

There’s no debating the value of outsourcing as it pertains to software development. In the NextGen Global Outsourcing Survey conducted by Deloitte, 78 percent of respondents indicated that they feel positive about their outsourcing relationship and the advantages it offers.

There are many different types of IT outsourcing services, some of which are more common than others and provide greater value, depending on your goals for outsourcing. Nearshore software development, for example, is an extension of the outsourcing industry that does have its differences from conventional applications like offshoring.

What is nearshore development and how is it different?

Conventional outsourcing information technology involves a direct relationship with a third-party or “provider” outside of your company or team. Outsourcing is a general term that encompasses varying degrees of third-party engagement.

For instance, inshore and offshore are two separate forms of outsourcing. Inshore means you’re working with a third-party located in the same country as your business or organization, while offshore means exactly the opposite. Then there’s dualshore, which is a hybrid of the two — teams are often split between separate locations.

Comparably, nearshore is a similar concept where you’re still working with a third-party; only they’re are located in a neighboring country or region. For instance, a U.S. based company working with another party in North or South America would be a nearshore engagement.

It may seem similar, and by all rights it is, but there are some exclusive benefits of adopting a nearshore relationship as opposed to offshore or even inshore.

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Traditional benefits of nearshore software development

For North American based companies, nearshore development relationships with Latin America partners are particularly attractive.

For starters, time zones remain relatively similar. This is a direct improvement over conventional offshore outsourcing because there are considerable challenges whenworking with a partner or company that operates under a separate time zone. This can also hinder direct relationships and communication when you have a 12 hour difference or more, especially when collaboration hinges on prompt or immediate responses, like it outsourcing.

As PSL Corp says, “we are in the Americas, [so] we can be agile because we are awake when you are awake.” That’s exactly true when it comes to nearshore partners.

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Also, because the region is similar, there are fewer language and cultural barriers to work through. You may be working with a partner in Colombia, as is common with nearshore relationships, with workers who use proper English, and live in a near identical time zone.

In fact, working with companies located in Colombia is a good move for any company considering outsourcing. According to the Global Location Services Index, which measures the suitability for outsourcing services by looking at metrics that indicate which countries display the, “strongest underlying fundamentals.” Colombia ranks 10th on the list, up 10 slots from 2016.

Then, of course, there are much lower rates or costs associated with outsourced development. In fact, lower operating costs are one of the major reasons any organization or business decides to outsource IT and software development. A whopping 59 percent of businesses cite that “cost-cutting” is the primary reason for outsourcing projects.

In Latin and South America, highly skilled programmers or developers work at much cheaper hourly rates. In these countries the average wage is already lower because the cost of living is lower, but often the local currency is weaker than the American dollar. Essentially, this means you get much more for a lot less when you choose a suitable outsourcing partner. This also happens to be what provides nearshore IT development a leg over inshore or local outsourcing and development opportunities.

But, there’s more to it than that

The benefits of outsourcing, and developing a long-term partnership with the right provider, go a long way in allowing companies to innovate and maximize performance. One way this becomes possible is by investing the money saved into R&D, making it possible to innovate faster. The other possibility is by outsourcing the non-essential items and allowing your skilled teams to focus on what they do best.

Then, there’s another way, evidenced by the responses in the Deloitte’s Global Outsourcing survey. “Some companies, [35%] for instance, look to their service providers to help them capture and integrate marketplace advances, such as tapping creative methods for improving quality and enhancing the user experience, to propel competitive advantage at a velocity they could not otherwise achieve by themselves. The savviest organizations use their providers to help them find, filter, and manage the many transformative products and services the marketplace invents to improve business performance.”

Your nearshoring partner is not just another vendor, but rather a valued partner committed to innovation and anticipating and working towards achieving shared goals. It makes sense, what’s good for you is good for them. More and more, these relationships are becoming crucial to the success of organizations. Find the right partner and start innovating, the success of your organization depends on it.

Say “yes” to those nearshore outsourcing opportunities

Despite its many benefits, many companies or teams overlook the idea of nearshore IT outsourcing. The typical mindset dictates that “outsourcing” means shipping the work far away, such as to a completely different continent in the far East.

Just be aware that’s not necessarily the case, and you can definitely find a suitable partner or collaborator in a neighboring country.

About PSL: With 30 years of experience and 500+ engineers, we focus on open and transparent long term relationships, embracing your goals as our own. Let us help you face your most complex software engineering challenges by deploying high performance outsourcing teams in your same time-zone. https://www.pslcorp.com/it-outsourcing-services-companies/