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Software Outsourcing | Nearshore vs. Offshore

  • Nearshoring
  • Software Outsourcing

31 May 2023

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Outsourcing software development takes many forms. The tech industry has managed to harness a lot of manpower in recent years due to updating its onboarding practices – many of which were brought thanks to the rise of remote working habits. This, of course, brings a lot of factors that CEOs and CTOs alike must consider before tackling outsourcing.

If there’s one thing for certain, it is that the working environment is becoming more and more insulated by the day. Tech companies are spending less and less on physical spaces in order to function – many sectors in the industry have already switched to hybrid or even fully remote schedules. At the same time, however, the talent gap has widened over the years.

Ever since the pandemic’s onset, hiring the most talented engineers and developers for your product has become an increasingly difficult task. With so many options and schedules available, workers are much more likely to be selective when it comes to committing to one single job offer.

This is where outsourcing comes into play. By employing the best engineers available – without the hassle of having to find them or hire them – companies are able to withstand financial pressures and reach their time-to-market goals. However, this still leaves the question of whether it is best to use traditional means or to depend on Nearshoring services.

The Basics of Software Outsourcing

While hiring engineers can be a long process, software outsourcing significantly cuts down on time. By hiring an external provider, companies can choose the model they prefer in order to acquire the necessary resources for their project. This is extremely common with American companies that choose to hire people living in countries with large IT talent pools. They receive the benefit of ramping up their projects while usually taking advantage of the cost-saving benefits offered by this method.

In the past, we have provided concrete examples of this: maybe your business needs to complete a project within a specific time slot and you need more people on your team. Maybe, your app actually needs specific personnel with the required UX/UI skills at their disposal. Whatever the case may be, outsourcing your project can be an extremely helpful asset in desperate times.

What’s The Difference between Nearshoring and Software Outsourcing?

That’s all fine and dandy for traditional outsourcing, but what’s the deal with Nearshoring? A lot of people, especially CTOs, don’t traditionally engage with normal outsourcing business practices due to several reasons: management problems, cultural differences, and extreme time-zone issues are some of the common culprits.

Nearshoring, however, seeks to address these types of complaints. By outsourcing IT work to neighboring countries to your company’s home base, you can ensure that the delegated tasks will enjoy a lot of benefits when compared to traditional outsourcing. More straightforward communication and easier management practices are just the surface-level advantages, in this case.

For simplicity’s sake, let’s assume that a Silicon Valley startup would need to rely on staff augmentation practices. By hiring people based in Latin American countries such as Colombia, Venezuela, or Argentina, they’re accessing a vast talent pool while also enjoying the benefits of working with a neighboring country.

What Are The Benefits of Nearshoring?

Why would the US choose to work with Latin American countries instead of more traditional examples like India? There are various reasons, which can be boiled down to the following:

Financial Advantage

Saving between 50% and 60% of your budget is quite an achievement, especially if your project is already under heavy scrutiny by board members and investors. Due to differences in wages and salaries, talent in LatAm countries normally ends up being quite cost-effective.

Talent Pool

Latin America has grown into a vast Technological Hub over the last decade, fully harnessing the benefits of remote work to bolster its tech proficiency to the fullest. Thousands of engineers and developers regularly work with American companies due to this simple methodology.

Time-Zone Advantage

It’s not the same thing to communicate with someone who has a 12-hour difference between your country and theirs, vs. a simple two-hour delay. Given that the tech world regularly has a chaotic and constantly changing pace, it’s expected that many CTOs will prefer working with engineers who are in the same time zone as them.

Agile Practices

Partnering with the right company is obviously important, and any software outsourcing partner worth their salt will employ the best Agile practice to secure a streamlined process and substantially reduce project completion timeframes.

Intellectual Property & Product Performance

Similar to the above, choosing an adequate partner will also allow you to keep full control over your creation, while also avoiding any legal pitfalls along the way – while also making sure that your app or product becomes scalable and profitable beyond the pilot test.

So Which Software Outsourcing Is Better In The Long Run?

Companies will do well to consider the above factors when choosing between traditional software outsourcing and nearshore software development practices. While conventional services might seem appealing due to their proven effectiveness through the years, CTOs and leaders might also enjoy the benefits offered by a closer cultural counterpart.

Offering services along these lines has been our business for over 20 years. We at Teravision Technologies have helped with web & mobile application development through the best business practices, along with the necessary expertise to help you on your product journey. If you need assistance or any guidance, contact us – and let us help you make your vision a reality.

  • Nearshore
  • Software Outsourcing
  • nearshore software development
  • software outsourcing

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