Industry Insights 5 Is Outsourcing IT Services To A Nearshore Company Right For Your Business?

Industry Insights


Is Outsourcing IT Services To A Nearshore Company Right For Your Business?

by | Jan 26, 2022 | Featured, Leadership, Nearshoring, Software Development

About The Author Steve Taplin

Steve Taplin, CEO of Sonatafy Technology, is a serial entrepreneur with extensive expertise in software development, MVP product development and the management of staff augmentation services.

Since nearshore outsourcing involves getting a company in another country to execute your objectives, it may be hard for you to gain trust in such companies — however well they’re established. Most businesses rely on nearshore companies to be on par with their advanced IT software development competitors.

Apart from avoiding the stress of dealing with complex software development issues, other benefits of outsourcing software development services include increased brand loyalty and a heightened focus on core objectives. Additionally, due to increased demand for nearshore outsourcing services stemming from the pandemic, companies offering such solutions are battling among themselves to provide state-of-the-art services and earn customers’ trust.

Are Nearshore Companies As Established As Prominent Outsourcing Businesses?

Over the past years, India has showcased its ability to undertake multiple IT outsourcing projects, including advanced software development. However, the country faces challenges in bridging cultural and geographical divides, making it easy for nearshore companies to compete with it. However, the competition isn’t stiff enough, since India has established a good rapport with corporations for years. As a result, many companies trust Indian software development services that have operated for decades and may ditch newly-established nearshore IT outsourcing organizations due to their lack of track record.

As Aravind Adiga is often quoted saying, “India’s great economic boom, the arrival of the Internet and outsourcing, have broken the wall between provincial India and the world.”

That said, several technology businesses have invested in nearshore companies in spite of this. These companies can reduce the risk of paying for ghost contracts by working with their region’s service vendors. However, even though some company owners trust nearshore IT firms, these companies still don’t have the reputation of India or Eastern Europe.

Increase In Demand For Nearshore

The time difference between India and the U.S. is considerable. This makes it hard for businesses in the U.S. to outsource IT solutions when they have to attend Zoom meetings late at night. 

Due to this, there’s an increased demand for nearshore outsourcing since it can eliminate the time zones issue. In addition, a large percentage of near-shoring countries in the Caribbean and Central America are within the U.S.’s time zones, making meeting scheduling and working within business hours much easier.

The other benefits of nearshoring include the following:

• Allows Easy Business Interactions Without Crushing Cultures: With nearshoring, you’re able to understand internal and external cultures. This, in turn, creates healthy business relationships among suppliers, partners, customers and employees. As an example, simple cultural beliefs such as misusing your left hand in the Middle East or bowing in the wrong manner in East Asia can be the beginning of a disastrous business partnership. Nearshore businesses may be easier for your employees to communicate with.

• Reduces Costs: Hiring an established business that specializes in software development, rather than using your inexperienced in-house employees, can save you money big time. You’ll cut costs such as human resource expenses and spread out ancillary charges such as non-IT costs. Additionally, working with nearshore IT companies lowers your logistics expenses.

Sourcing A Top-Notch Nearshore Company

Outsourcing software development services from Indian companies is often the safest option, since those companies have experienced up to 30 years in business. However, some firms in the U.S. have opted to work with nearshore firms for a variety of reasons. In seeking out a nearshore business to work with, I suggest doing the following: 

 Researching employee training levels in your country of interest.

 Assessing laws and levels of intellectual property security in the country.

 Finding out if your prospective company has a U.S.-based management team.

If you choose your nearshore company correctly, your business can gain a competitive edge in cost, compatibility and communication during the software development processes.

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