Hiring a nearshore development team is an effective strategy for enterprises that want to tap into larger talent pools, and provide operational benefits such as cost-effectiveness and efficiency. The real question for most companies, however, is if establishing your own nearshore development center is more valuable than hiring a third party. Some will argue that establishing your own nearshore development center brings the benefits of having a dedicated development center alongside most of the common benefits we know nearshore software development offers, like cost-effectiveness, cultural alignment and time zone overlap. Still, this solution may not be for most companies looking for nearshore software development.
The reason why companies are hesitant to establish their own nearshore development center is a mix; mostly, the reasons are tied to legal and HR difficulties. This is why most enterprises prefer to work alongside nearshore companies with development centers already established to ease them into the process. They deal with all the HR management, compliance and administrative issues, while their clients enjoy the benefits of hiring from these companies. But is there more to it? What are all the reasons that make establishing a nearshore development center from scratch an unpopular approach? Let’s find out!
Before getting into the weeds of the benefits of setting up a nearshore development center are, let’s answer the question of what is nearshore software development. This is a practice where companies hire software development companies from neighboring countries to bulk their team at a cost effective rate. As such, a nearshore development center is essentially their hub, housing several teams of tech professionals waiting to work on projects. From UX/UI designers, QA specialists to developers, team leaders and project managers; a nearshore development center has all the technical workings you need to succeed.
We’ve already mentioned some reasons why companies choose to establish a nearshore development team or nearshore development center; cost effective teams, as well as cultural and time zone alignment make it a very sought after option compared to other models. However, what are some concrete scenarios that make this method preferable for your needs?
If you want to start agile nearshore software development through your own nearshore development center, there are a couple of things to consider:
Attributes | Establishing | Hiring |
Time Investment | High time investment, since the center needs to be established from the ground up. | Low time investment, as the center is already established. You only need to negotiate terms. |
Scalability | Highly scalable, but held back by the time investment you’d need to accomplish it. | Highly scalable, without the drawback of time investment found in the alternative. |
Operability | Makes operability of your business more difficult with more overhead added to the operations. | Easier to integrate since the members act more like service providers, with a work scope similar to an employee. |
Risk Management | High risk with the amount of time and financial resources needed to establish your own nearshore development center. | Lower risk since the responsibility is shared between client and service provider. |
This will entirely depend on the business goals you have for your project. If you have a high tolerance for risk and you want to risk adding more costs to your business, then you are free to take a shot at establishing your own delivery center. However, if pure operational efficiency and cost-effectiveness is your main motivator, then hiring an already established nearshore development center is the right path for you. Nearshore companies with these already established delivery centers can help you achieve your goals while absorbing a lot of the risk that come with expansions. If you are looking for a company that is an expert at nearshore software outsourcing, nearshore saas development, or agile nearshore services, why not contact Teravision? We have over 20 years helping companies struggling with keeping up their business goals. Let’s get you back on track!
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