Industry Insights 5 Nearshoring: What Is It and Why Has It Become So Popular?

Industry Insights


Nearshoring: What Is It and Why Has It Become So Popular?

by | May 11, 2021 | All, Nearshoring, Software Development

About The Author Josh Nuzzi

Josh Nuzzi is the VP of Marketing at Sonatafy Technology, with over 12 years of marketing expertise in a variety of industry verticals, with focus on technology and software.
Talent and Skilled IT Team Members

There’s no denying that the coronavirus pandemic will change the way we work. With many employees now doing their job from home, access to talent has never been easier. Many companies have even begun to outsource previous in-house positions, helping them improve their productivity.

Nearshoring, a specific type of outsourcing, has continued to gain popularity over the last year. Let’s take a closer at what nearshoring is and why it can be valuable to the software development process. According to Gartner, 85% of logistics leaders increased their outsourcing budget in 2020.

Nearshoring vs. Offshoring vs. Onshoring

There are three common types of outsourcing:

  • Nearshoring – The process of outsourcing developmental processes in business and information technology to another company that’s located in a neighboring or nearby country.
  • Offshoring – The process of outsourcing developmental processes to freelancers and specialist teams located anywhere in the world.
  • Onshoring The process of outsourcing software development and business process to an outside contractor, located within the same country.

Each type of outsourcing has its advantages and the right solution will depend on what you’re trying to build. However, the process of nearshoring continues to grow, due to the additional value it adds to businesses of every size.

Advantages of Nearshoring

One of the benefits that come with nearshoring is the ability to save money during the development process. It provides access to top talent, often with lower labor costs. Nearshoring is also a great way to outsource data privacy and cybersecurity.

The nearshoring method of outsourcing also supports collaboration. By outsourcing nearby countries, you can also establish relationships with other entrepreneurs, helping to expand your network. Especially in locations such as Latin America where cultures and language are similar, you can expedite workflow and find new solutions for your software development process. According to research by the Oxford Business Group, nearshoring has increased in Bogota, Colombia by 16% in recent years.

The outsourcing market is worth $90 billion and 59% of companies report significant cost reduction from using outsourcing services.

IT services, accounting, and digital marketing are the main areas where companies are already relying heavily on outsourcing teams.

If you’re looking to bring your product to market but don’t have the in-house talent, nearshoring can be a helpful option. Nearshoring can ensure that all of your teams are located in the same or nearby time zone, allowing them to communicate and collaborate without needing to schedule meetings across multiple time zones.

Third-party vendors are an effective way to help build your product at a lower cost. Often, you’ll also gain access to new talent that can help you refine your product roadmap.

At Sonatafy, we offer a wide range of software development services that are designed to add value to your project. Whether you’re at the audit stage or looking to maintain and manage post-deployment product inventory, we can help. We’ve successfully matched top talent across Latin America since 2015. Contact us today to find out more about how we can help you build faster.