Bringing Your Software Project Team Together with Nearshoring
Nearshoring is offshoring with all the trimmings, closer to an on-site team than offshore, but with the benefits of abundant affordable skilled talent. In developing economies such as those in Latin America, universities are graduating highly talented IT workers and software engineers, but the local economies are not yet mature enough to have a high demand for these skilled digital workers. Since demand for similarly skilled people in the US is increasing and in some areas is creating shortages, nearshoring, a way of connecting remote talent within the local geographical region to US-based companies, is an excellent solution for both US companies’ and remote workers’ needs.
A Few Advantages of Nearshore Talent in Enhancing Your Team’s Resources
Advantages of working with nearshore resources including individuals and teams include the accessibility of a similar culture, enhanced communication as a result of geographical proximity and closely aligned time zones, better understanding of your in-house team’s language including nuances and idioms, and accessibility for IRL meetings and visits for kickoffs, team building, and intensive communication such as architecture reviews. Companies can include nearshore resources as individual contributors working remotely with their team of employees, or contract with a nearshore team to produce a software package such as an app for mobile devices, frontend modules for a website, or other defined deliverable.
Ramping Up to Meet the Expanding Needs of the Digital Economy
Tech companies are facing pressure to take advantage of opportunities that emerged during the pandemic, where technology and digital strategies allowed companies to leapfrog the obstacles that isolation presented. One challenge that companies are facing is the ability to find the resources to grow and meet those opportunities at the scale they’re demanding. As Forbes noted, nearshoring has the unique advantage of providing necessary resources at costs that reflect their international sources. By putting these nearshore digital experts to work, companies “can decrease operational, production and personnel costs while boosting scalability”
Answering the Global Supply Chain Concerns and How They Might Affect Outsourcing
American Express, discussing the recent trend to bring the supply chain closer to home and reduce offshoring for a variety of reasons, notes the cost: “higher labor costs and a smaller pool of skilled workers to choose from” as they bring production back to the US. Nearshoring addresses these concerns and adds advantages by offering a larger pool of skilled workers, trained at top universities in their countries, in nearby countries with lower cost of living. Other concerns mentioned by American Express in the article for relying on international partners at much more than an arm’s length away are reduced or eliminated by the proximity, cultural similarity, and political connections of countries near to the US.
Digital Workers of Many Kinds are Available Through Nearshoring
Software engineers and developers are not the only resources available. Educated and experienced professionals in project management, system management, IT support, and specialized areas such as code management and tool maintenance for development teams are all available through nearshoring. IT support is of particular value to many companies, as they can move all or part of their lower tiers of support, normally provided through electronic means anyway, to a nearshore team that’s trained and ready to take over. This allows on-site IT staff to focus on in-person and top tier support, system maintenance and resource planning, upgrades, and company-specific internal development projects. In fact, many of those are often part of a nearshore IT team’s responsibilities, especially for smaller companies where internal IT resources are at a premium.
Keeping Nearshore Teams Close by Communication and Expert Management
One of the challenges of working with offshore teams on a global basis is the wide range of challenges that the situation presents. Communication, time differences, and cultural misunderstandings all contribute to make a company’s first project with an offshore team an adventure that may not be encouraging. By working with a nearshore provider like Sonatafy, a company not only reduces the inherent risks of global digital cooperation by using “neighborhood talent” in the same geographical region, but also has the provider as intermediary to help them anticipate and work through the arrangements and communication. For managers that commit to expanding their team internationally, especially if the company is not used to outsourcing of professional work, this can give them the confidence to produce successful results. In fact, knowing that they have the backup to make their project work with reduced costs and an expanded nearshore team, they can sell to the C-suite with commitment, which often carries more weight than numbers.
Getting Started with Nearshore Resources
One of the most challenging parts of any outsourcing effort, domestic or international, is gaining an understanding of the market, how it works, and how to evaluate vendors. In a global market, getting beyond information gathering can be a daunting prospect. A nearshoring company like Sonatafy presents an opportunity to build a traditional business relationship here in the US, and reach out to international resources based on the nearshoring company’s experience and expertise. Without the uncertainty involved in direct connections around the globe, companies can experience the benefits, and enjoy the international connections with other engineers, and keep the focus on putting the additional resources to work on company goals, rather than watching the horizon for unforseen risks. As noted in the American Express article, now is a time to respond to a growing economy, but with caution as the world has seen disrupting times. Nearshoring is a balanced strategy that can meet the needs of company growth.
What is the difference between offshore and nearshore?
Offshore refers to business relationships with companies in other parts of the globe, many time zones away. Nearshore employs international resources closer to home.
Why do companies nearshore?
For a large, diverse country like the United States, nearshoring can use resources not much further away than a coast-to-coast domestic outsourcing resource, but with significant economic and talent availability advantages.
What is near shore development?
Near shore development consists of accessing international software development resources, often more available than local ones but equally skilled and lower in cost, within a geographic region rather than globally.
What is nearshore software outsourcing?
Nearshore software outsourcing adds regional international resources to a domestic company’s software development effort.
What are the advantages of nearshore?
The resources available with nearshore are highly trained and experienced, but may be more readily available than local workers, and at a lower cost due to geography.
What is the most important justification for a company to consider offshore decision?
Involving offshore technology resources in a company’s strategy is usually justified as meeting a company’s development needs and budget better than they could without turning to the offshore option.
What are three advantages to onshore outsourcing?
Onshore outsourcing, which is turning to domestic resources for contract-based technology services or software production, may involve fewer cultural differences, less geographical distance and time zone challenges, and simpler legal arrangements than internationally contracted services.
What are the major types for outsourcing?
Based on geography, the three major types of outsourcing are:
- Local — in the same country
- Offshore — remote international providers, usually in Asia for US companies
- Nearshore — regionally located cost-effective providers, such as Eastern European for Europe, or Central and South American companies for North American customers.
What are the benefits of offshore outsourcing?
- Cost savings
- Access to experts and specialists that may be in short supply locally
- International presence with cultural advantages
- More autonomous operations
- Routine work, allowing local staff to focus on future development, work that engages them for retention, and architecture over coding.
What is the advantage of onshore outsourcing?
A company can get the software development resources it needs without the challenges and risks of international outsourcing.
What is an example of offshore outsourcing?
Contracting with software development team in a country with high quality IT education but low cost of living, such as India.
What should be practiced for best outsourcing?
- Practices for Solid Outsourcing Operations
- Connect with the outsourcing company, manager to manager, for viable communications.
- Be clear with definitions such as schedule and scope of work to be performed.
- Make sure that your outsourcing provider has experienced experts in the areas you require (and are not “quick studies”) especially for complex areas such as software development or IT systems support.
- Don’t keep your eyes fixed on the price.
- Take the time to evaluate their portfolio of past work and see if there’s a good fit.
- Don’t “jump in feet first” with your main project. Start small, get to know each other, and work the kinks out of your business relationship.
- Organize goals or milestones and payment expectations.
- Manage legal rights and responsibilities, such as ownership of any software or other intellectual property produced.
- Include followup plans in the initial contract, including post-project support or warranty.
- Build a personal business relationship between the teams to help bridge cultural and communication differences, and ensure a productive relationship. This can include in-person meetings of teams or team leaders, periodic visits, and an extended project launch visit to help the outsourced team understand the nuances and details of the project, technology, and other specifics of the work.
What is meant by front office outsourcing?
Front office outsourcing engages an external organization to perform customer-facing roles such as managing sales leads and CRM system management, customer care, or technical support, help desk roles, and service desk support.
What is offshore employee?
An offshore employee works for an affiliated offshore company and is neither a U.S. citizen nor a U.S. resident as defined by U.S. tax law.
Why do companies outsource?
Companies outsource to meet strategic business goals such as handling sudden growth, staying focused on core competencies and outsourcing functions they prefer not to incorporate in their organization, and simply seeking cost savings over internal operation by employees.
Outsourcing can take many forms, some interchangeable and some involving specific expertise or talent. These include:
- Professional Outsourcing
- IT Outsourcing
- Business Process Outsourcing
- Knowledge Processing Outsourcing
- Manufacturing Outsourcing
- Project Outsourcing
- Operational Outsourcing
What is a business process outsourcing company?
A business process outsourcing company performs any of a number of essential but generic business functions such as accounting or payroll as an external service provider to other companies.
What are examples of outsourcing?
A small company with a suddenly popular product might adapt to demand by adding outsourced production to address consumer demand for the product, and outsource front office functions to handle the rapidly increasing customer contact needs such as call center and support functions. This way, the core business can remain more stable during times of rapid change.
Startup companies often outsource accounting and payroll functions, using business process outsourcing resources. Outsourcing companies that provide these functions can ensure legal compliance, provide benefits administration, and serve in other important roles while the company is still too small to employ full-time workers in these areas.
Is BPO and call center same?
A call center can be one type of BPO service, but they are not the same thing.
What is difference BPO and KPO?
Business Process Outsourcing provides general business services, while Knowledge Processing Outsourcing provides more analytical and technical skills in processing business information.
Nearshoring as the Way to Reduce Global Offshoring Risk by Relying on Neighbors
At Sonatafy, highly skilled and experienced technical workers are available to meet your company’s needs with the cost advantages of international connections, but in companies a short flight from the continental US. With clear communications, expert advice and management by Sonatafy, and expert resources from software engineering to project management and IT support, you can keep projects on track and with the intended scope. Your company can incorporate budget-friendly skilled engineers available with the specialization you need into your software development picture. We have the success stories to help you see what’s possible. Still not convinced? Try our Try Before You Buy programs.