The Ins and Outs of Nearshore

Nearshore is a relatively new thing in the business world. It came into existence due to the lack of good outsourcing services capable of delivering the solutions they advertised. Before nearshoring was available, the way most American companies were able to cut costs was sending their break/fix and maintenance projects to countries like India, China, the Philippines and Vietnam. These countries offered very low prices, which was enticing, however, the final product was seldom what was expected. To make matters worse, countries like China and India started to raise their prices and the payoff for outsourcing simply disappeared.

Software Development Companies Looked Closer

When the market for talented foreign programmers lost some of its key sources, companies looked closer to home, and once they did, some of the major weaknesses of offshoring were exposed:

• Time Zones: One of the biggest complaints American companies had when it came to offshore services was that they had little to no contact with the people conducting projects; this due to the huge time difference between the U.S. and any of the Asian countries listed above. So when places like Mexico, Colombia and Brazil opened up as options, one of the biggest advantages people found was that they worked at the same time as their nearshore counterparts, making communication a lot easier.
• Language Barrier: Another problem businesses encountered was the lack of proficiency in English that most Asian programmers had. It’s simply not a first necessity for them as opposed to Latin American countries who see English as compulsory, especially in certain industries such as software development.
• Cultural Background: In the same way as the language barrier, the cultural disconnect was a big thing with Asian providers. What U.S. businesses found was that nearshore markets had way more understanding of the American business culture and the way Americans work.
• Untapped Talent Base: It turned out that countries like Brazil, Colombia and Mexico were starting to graduate large amounts of students with technological degrees without having enough domestic jobs to go around. This left a lot of young, talented workers looking for work abroad.
• Lower Costs: Most companies look for those lower prices. However, when they realized that misinterpretations lead to re-work, and re-work lead to wasted time, the expected savings disappear. So, even though nearshore prices are slightly above those in places like Vietnam or the Philippines, the quality of work and the speed at which it’s delivered, makes the costs go down even more.

Nearshore Software Developers are Here to Stay

The advantages of hiring in the nearshore have become apparent and many businesses are taking that option to drive their costs down. Many companies have filled the market over the past few years, all with varying degrees of success, so be sure to research the possibilities available so you get the best service that money can buy.

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