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Why is Nearshoring a Smart Alternative for Software Development?

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Allan Seeman
ByPor Allan Seeman

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Nearshoring As A Smart Alternative

More than ever before, our human connections and our commitment to excellence will differentiate the winners and the losers in the IT industry. It is already known that alternative ways of working like automation will start replacing jobs in the near future. This is why nearshoring software development services can be a great solution for organizations. Nearshoring offers the geographical proximity and cultural affinity that companies need in order to reduce costs, produce top quality solutions and foster strong relationships. In return, it can produce better outcomes for your organization.

Hiring an external software development company can be challenging and can represent at some significant risks. In order to create an effective partnership, it is vital to recognise some key factors.

The risk transfer and cost savings associated with hiring nearshoring partners make taking the risks worthwhile. The value of a good relationship with a nearshoring partner brings a lot of long-term benefits to organizations.

Human Effort

Even though the digital transformation keeps emerging, the need for successful human interaction is also becoming more important. The level of human effort required to successfully implement these technologies is far more complex than people imagine. Technologies change constantly and it requires talent that knows how to manage the change. This is where nearshoring strategies can be considered as an excellent alternative. By having a specialized team that can navigate the changes and communicate effectively, they provide the resources that can deliver top quality services but at reduced costs.

Nearshoring software development partners ideally should be located within a few hours of major U.S. airports and fall within U.S. time zones. This proximity and cultural familiarity enable them to develop stronger, more authentic and more trusted teams. The “human connection” can be a key differentiator in terms of software development teams. In the end, you need a partner that understands your needs and communicates well with your existing team.

Security

One of the mains risks of nearshoring is security. This can not only include data security, but also the security of the employees and the offices. While data security can be maintained in the cloud, putting employees at risk can present its own set of problems. If the office is in a dangerous location, or the team members are at risk, it will surely affect the quality of work.
In terms of security, some parts in Latin America have been identified as “dangerous” due to high rates of crime. However, some countries in the region have registered a reduction of urban violence and crime. A clear example of this is the city of Medellin in Colombia. The city has gone from being dubbed as “the most dangerous city on earth” to the “Silicon Valley of South America” in less than three decades.

IT & Business Processes

Different countries in Latin America have a high percentage of IT service providers that have achieved difference IT and processes and business certifications (i.e internal IT controls, or Six Sigma, etc.). However, this is something that is still in progress as international standards are being established. Latin America software development companies that work with foreign clients need to ensure that they obtain the required certifications in order to be competitive in the U.S. market. For some vendors reaching these standards involves investing in staff training and workflow optimization.
It is important to consider these risks and acknowledge them is critical when optimizing the rewards of working with nearshoring teams: cost, proximity and culture.

Geographical Proximity

Being geographically close is not only convenient for executives, but it also means that travel costs can be reduced dramatically (this applies to executives and team members that need to travel). It takes an average of 25 hours to travel from the U.S. to an offshore location in India or Asia. One of the greatest advantages of nearshoring is its proximity to the U.S. In many cases, development team members can travel to a meeting in the U.S. and return to Mexico the same day. Working with remote teams within the same time zone facilities the communications need for great collaboration.

Cultural Affinity

Cultural affinity is another advantage of nearshoring. Some Latin American countries are very familiar with the U.S. culture. In fact countries, like Mexico, are similar to the U.S. in a lot of ways. This means that adjusting to the style of work and dealing with people can be easier than adjusting to cultures that are less familiar to the U.S.culture. Interestingly, some of the largest metropolitan areas in the U.S., including New York and Los Angeles, have huge Spanish speaking populations.

Conclusion

Ultimately, having a successful nearshoring software development team comes down to the expertise of the staff and the mutual commitment of both parties. These factors should be where the focus and resources concentrate. All in all, nearshoring is a great option thanks to the cost savings, proximity, and cultural affinity.