Top 5 Reasons Companies Choose Nearshore Outsourcing

If you’re thinking about outsourcing software development projects, you’re far from alone. Over the last decade, more companies have embraced outsourcing as a way to meet rising customer expectations, reduce costs, and gain a competitive advantage in a fast-paced digital landscape.

Whatever your reason, it’s important to understand the basics of outsourcing before you start searching for a partner to take on your next big project. Let’s go over the difference between nearshore outsourcing and offshoring:



  • What is Offshoring? Offshoring is an outsourcing model where a company partners with a development group based overseas. Offshore service providers typically operate in countries like India, China, the Philippines, Russia, Romania, or Kenya. While offshoring is often quite affordable, it comes with some major disadvantages: cultural differences, time zone incompatibility, language barriers, quality issues, collaboration challenges.
  • What is Nearshoring? Like offshoring, nearshoring is an outsourcing model where a company partners with a team based in another country. However, the difference is, service providers operate out of nearby countries. For US firms, that means working with developers in places like Mexico, Brazil, Costa Rica, or Argentina. The advantages of nearshore include shared time zones, cultural similarities, and in many cases, the ability to work with English-speaking teams.

In these next few sections, we’ll discuss some of the top reasons nearshore outsourcing is one of the best ways to extend your capabilities.

Video: 3 Reasons to Choose Nearshore Software Development Outsourcing

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5 Reasons Companies Choose Nearshore Outsourcing Companies

1. Proximity to talent.

Since 2005, offshoring numbers have steadily declined, while nearshore outsourcing numbers have continued to rise.

Why? Well, one of the big reasons is proximity.

Offshoring software development work usually means lag time–teams often operate in time zones 12+ hours ahead of the US–which means they have less control over quality, workflows, and deadlines.

Traditionally, US-based businesses used offshoring to cut costs, outsourcing entry-level roles with little responsibility to markets with the most competitive rates.

However, things are changing.

Companies are now looking toward outsourcing as a means of maintaining momentum and keeping up with users’ increasingly high demands. Today, companies of all sizes rely on third-party software developers to support robust, strategic roles with innovative solutions that many in-house teams can’t provide.

For US organizations, nearshoring offers a direct line to developers in nearby countries like Mexico, Brazil, Costa Rica, or Argentina, while also allowing for cost-savings by reducing spending on overhead and labor.

2. Cultural alignment has a direct impact on the bottom line.

Often, businesses turn to offshoring as an easy way to reduce overhead and increase agility, only to run into cultural barriers and communication obstacles that cancel out the benefits of the arrangement.

Nearshore outsourcing can also reduce problems caused by language barriers and cultural norms that make it harder to meet goals and deadlines.

However, alignment means more than a shared language and lifestyle–outsourcing partnerships tend to work best when there’s a strong cultural affinity between both teams.

Mexico and the US share both a border and a history that spans more than three centuries, and as a result, the two countries have many cultural similarities.

And because English-proficiency is a degree requirement at most Mexican universities, most outsourced development teams are prepared to collaborate with US clients using the same tools they use with internal employees.

Cultural Affinity Quote

3. Access to dedicated agile teams.

Outsourcing Agile can present some significant challenges—particularly if you’re working with teams on the other side of the world.

Nearshore outsourcing allows organizations to work experts that use mature Agile methodologies, with the right conditions.

In most cases, outsourcing Agile works best when some team members work collaboratively at the provider’s site, and others work from the client’s headquarters. Completely remote teams can work well, too, but require more coordination and experience with Agile.

With the right tools in place–video conferencing, chat, and a shared digital workspace, nearshore outsourcing is a great way to ensure efficient, high-quality software development and a more collaborative experience than you’ll find with an offshore company.

4. Expertise in almost every technology.

One of the biggest benefits of working with a nearshore web development company is you’ll gain access to a deep roster of experts who work with all kinds of technologies–Java, Python, .NET, React, Angular, PHP, you name it.

Companies can easily connect with experts with specific skills that are hard to find. Or, maybe they only need to use a certain program or language for a single project. Keep in mind, you’ll want a partner who knows which technologies best support your business goals.

5. Cost-effective software development resources.

One of the most common reasons companies outsource development projects is cost-savings.
While offshoring companies often offer lower rates than nearshoring companies, nearshore firms tend to deliver a higher ROI.

Offshoring software development can add to cost and project time-frames, with management issues like language gaps and miscommunications between teams on opposite ends of the world.

For clients, communication and timing challenges can cause delays and increase the cost to complete a project. On the developer side, these issues can have a negative impact on their quality of life–resulting in high turnover and burnout, which in turn, affect software quality.

Nearshoring can dramatically cut down on the number of working hours and resources required to hit deadlines, thus reducing the overall cost of each project.

Additionally, nearshoring to Mexico can help companies avoid the risks of undeveloped legal and regulatory systems. Mexico offers strong data and IP protections not guaranteed when offshoring.

Offshoring to developing nations creates business risks inherent to less concrete civil infrastructure, underdeveloped legal and regulatory systems, and problems related to political instability and sensitive intellectual property.

Increasing Prevelance of Nearshore Outsourcing Chart

Get Better Results with a Nearshore Outsourcing Company

Finding and hiring great developers is only the tip of the iceberg. You’ll also need to look at quality, cost, reliability, and process–critical factors that can make or break the success of any software project.

Nearshore software development brings the advantages of offshore closer to home, allowing companies to avoid many of the risks and hidden costs of outsourcing.

At Tiempo Development, our clients gain access to top development talent working in US time zones. Our nearshore business model supports seamless collaboration using mature Agile processes to achieve fast ramp-up times.

Contact us today to learn more about our approach to nearshore outsourcing.

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