With growing challenges finding and competing for experienced developers in the United States, more businesses are growing their technical talent in new ways. Outsourcing is becoming a regular best practice in order to streamline the Development process, promote innovation and reduce overhead, but not all outsourcing options (offshore -or- nearshore) are the same.
To make sure the team you partner with best aligns with your unique business goals, it’s important for you to understand the different options available. Here are some answers to questions we often hear:
What’s the difference between nearshore and offshore software development anyways?
When you offshore development work you’ll be partnering with a business overseas, typically in Southeast Asia, (Vietnam, Sri Lanka, Indonesia, Malaysia, Philippines), Eastern Europe (Romania, Bulgaria, Armenia), or Africa (Morocco, Kenya and South Africa).
These options may mean higher costs, management difficulties, tougher language barriers and more disconnect between teams on different sides of the world and opposite time zones. And that’s not all… other perils of offshoring can include a lack of quality control and undeveloped legal and regulatory systems.
In fact, numbers for offshoring (the previous standby) have been dipping since 2005, while nearshore outsourcing numbers continue to climb. Why?
Proximity makes a difference. One of the strongest contrasts is geographic proximity and time zone differences. Offshoring can mean lag time, (up to 12 hours to be exact), which means less control of projects and deadlines. The distance and problematic timing also make it harder to communicate. Even when a time lag isn’t apparent, the working conditions can impact the quality of your software outcomes.
When your team is in the U.S. alert and ready-to-go, developers on the other side of the world are working nights and might be less alert or productive.
Culture can impact your bottom line. Having cultural affinity is a key component to any outsourcing partnership. While developers in countries all over the globe speak English, many businesses trying to boost their agility by offshoring have run into serious cultural communication barriers.
Latin America shares a border and a common history with North America that spans more than 300 years. This commonality is extremely important to supporting innovation and effective communication. Having cultural alignment means for a smoother working environment for your team and your partner.
And cultural alignment is much more than just sharing a common language and lifestyle. Offshoring to developing nations involves risks tied back to less concrete civil infrastructure, less developed legal and regulatory systems, and problems related to political instability and sensitive, intellectual property.
Greater distance can mean greater expense. Reducing overhead and cost is the main reason you’re looking to outsource in the first place, right? (Exactly.) These cost savings directly tie back to the cost of labor. The savings are significant for both offshore and nearshore, but more distance can mean more expenses for your business.
Being closer to your outsourcing partner promotes more frequency in interactions between both of your teams, making everyone more productive. Time zone proximity reduces the number of extra hours necessary to meet deadlines. That means the hourly rate for nearshore development is lower, reducing the overall cost to your company.
Reliable talent is growing faster close to home. In order to really weigh the differences between offshoring and nearshoring, you need to understand the variations in talent available for each option. Traditionally, U.S. based businesses have offshored roles with lower salaries and necessary responsibilities to cost-effective locations around the globe, but the trend has been changing. Recently the “Deloitte Global Financial Services Group” cited concerns around future accessibility to skilled workers in nations like India. The study shares that just 10-15% of Indian college graduates are “considered suitable for direct employment in the offshoring industry.”
The way businesses use outsourcing is also evolving to keep up with the constant flow of new technologies and growing user demands. In the nineties and early thousands, American businesses relied on offshoring for lower level positions. Now, more businesses are relying on outsourcing for more robust and strategic roles as well.
If you take the nearshore approach instead, that means working with developers in nearby countries like Mexico, Brazil, Costa Rica, or Argentina. Nearshore is increasing in popularity with U.S. based businesses looking to reduce spending on overhead and labor.
Again, when you work with nearshore companies you’re working across more similar time zones and usually at a lower cost than the offshore alternatives. Also, you eliminate more language and cultural barriers that can come at the cost of agility, creating confusion and making it harder to hit your deadlines.
The trends have been moving nearshore since 2010 when Gartner ranked Mexico in the top eight for outsourcing development locations with a leading score of “very good” for both the labor pool and the cost value, (ahead of Brazil and Chile).
So are all nearshore partners about the same? (Not exactly.)
Outsourcing with nearshore development is becoming a common practice for businesses learning about the convenience, cost, and time savings, but not all locations are created equal.
Variations in cost and accessibility? Nearshore partners vary in cost, convenience and accessibility. Certain regions mean higher travel times and costs, and even a higher likelihood of those frustrating language gaps that challenge innovation and agility.
Unfamiliar regions mean unfamiliar challenges. Also, regional market factors come into play. For instance, in Brazil there is a growing shortage of nearshore talent. Why? While the Development talent is growing, so is the local competition, including the government and local universities. That’s great for the local economy, but not so great if you’re a business looking to funnel ample nearshore talent with your bottom line in mind.
What makes Mexico your best nearshore option?
Eliminate costs and roadblocks. Expanding your development team in Mexico eliminates unnecessary outsourcing challenges. Mexico is closer than other nearshore options – that means lower travel costs, more flight options and similar time zones for optimal collaboration. Another bonus of working with developers in Mexico is the lack of language difficulties. Because of the country’s proximity to the U.S. there are a growing number of English speaking professionals there.
Projects on-time on the same time zone. The country runs on Central Time for more convenient collaboration – a main reason why more U.S. based businesses than ever before are looking to Mexico for their development needs. Working at the same time eliminates unnecessary delays and efficiencies and also brings a more stable and satisfied workforce.
A growing pool of educated, technical talent. More of the universities and technical programs in Mexico are requiring professional English competence, and that’s not a coincidence. As the market and global economy is constantly shifting, more U.S. based businesses are looking to Mexico for the agile business model that made them look to outsourcing to begin with. In fact, Gartner Inc. recently ranked Mexican IT at number 3 globally for offshoring options. The tech industry there is quickly growing at 3x the global average.
More security when it matters. Finally, Mexico also offers fewer compromises for intellectual property security because of the support of the Mexican government and the country’s rapidly increasing infrastructure.
What have we learned? In short, outsourcing your IT to Mexico promotes more agility and a greater, faster return on investment. English proficiency is no longer an obstacle in Mexico, neither is an ample flow of new, qualified talent.
Partnering with a nearshore vendor who outsources to Mexico means more good news for the board room too. Your CTO can meet the growing demands on his or her Development team sooner, all without going over budget.
That’s where Tiempo comes in. Our nearshore business model provides reliable cutting-edge software development and qualified team members in the same time zone without any language barriers for ideal outcomes. Tiempo makes the business of software development easier and more affordable with a unique combination of a nearshore business model, agile methodology, and advanced talent management. We build powerful software and applications in line with your strategy and business goals.
Reduce project timeframes and overhead and increase profitability, all before your next board meeting. Let our team of advanced developers engineer a powerful user experience for your customers from the ground up, or let us lay the behind-the-scenes framework for your next big move.
About Tiempo Development
At Tiempo, we are making the business of software development easier and more affordable with a unique combination of a nearshore business model, agile methodology, and advanced talent management. Our Development teams engineer powerful technologies that align with the goals and strategies of our customers for both their internal and public-facing development initiatives. Tiempo supports companies in launching software releases sooner without draining important resources. Learn how we can fast track your projects and increase your ROI within weeks.