As early as the 1970s, large manufacturers began moving operations offshore to cut costs. Fast-forward to the ‘90s, and the internet boom drove many tech companies to outsource development and support to countries around the world.
In 2020, COVID-19 impacted almost every industry, slowing growth for some but accelerating digital transformation initiatives for others. Both ends of the spectrum provided additional opportunities for outsourcing as businesses cut full-time IT teams to or rushed to hire extra talent to speed digitization.
As the pandemic recovery period continues to evolve, businesses in every sector are partnering with development teams located outside the U.S. — but, these days, they are increasingly looking closer to home.
What Is Nearshore Software Development?
To get to the heart of the matter, nearshore software development refers specifically to the practice of hiring developer talent outside of your home country but not from across the world. In this way, nearshoring is like offshoring, just closer to home
For example, if a business in California wants to hire a software development team to help clear its backlog, it might look for potential partners in Mexico or Central America. If the company is located in Florida, a Caribbean nearshore company could be a good fit.
Why Nearshore Now More Than Ever?
There are several reasons why businesses hire nearshore software developers. The company may be experiencing rapid growth and need to scale quickly to keep up with demand. Or perhaps it doesn’t have the budget to hire a permanent development team, or it can’t find the specialized talent required to complete a project.
Each of these reasons is a valid business case for hiring nearshore software developers. In fact, they are traditionally THE reasons why companies do so. But in today’s late-pandemic business environment, there are new pressures and disruptions within organizations that are motivating IT managers to seek out nearshore development partners.
And it turns out these teams are well-equipped to handle those pressures and disruptions.
4 Ways Nearshoreings Excel in Today’s Business Climate
Businesses weren’t prepared for the impact COVID-19 had on everything from supply chains to staff meetings. More than a year in, many organizations are coming to terms with the fact that things won’t be returning to their pre-pandemic status, so it’s time to adapt to the new normal.
Nearshore development teams are in a unique position to help businesses overcome some of the most common pain points caused or exacerbated by fallout from the pandemic. Here are four reasons why.
- Nearshore developers can solve your skilled labor shortage.
- Nearshore teams are used to remote work.
- Nearshore developers can help evolve your workflows.
- Nearshore developers come at low costs and deliver high value.
The pandemic didn’t cause the shortage of trained technical talent, but it certainly didn’t help matters. Many organizations struggle to hire enough skilled people to complete projects on schedule and keep the backlog at a manageable level.
Partnering with a nearshore development team can speed time to deploy on business-critical projects and help your team reduce the size of its backlog while freeing up the in-house team to work on other priorities.
The vast majority of employees who abruptly went from working in an office to working in their garage had no prior experience in a remote work environment. This caused significant disruptions to employee productivity, collaboration, and motivation.The nearshore service industry workforce has been working remotely for more than 20 years, so there is no lag time in onboarding new developers to existing teams.
Although nearshore software developers aren’t on-site, there are advantages to having them located in a region near your own versus on the other side of the globe. Geographic proximity means that your team and the nearshore team share time zones — or there’s significant overlap between them. This facilitates real-time communication across the teams, which allows for better collaboration and the ability to address issues immediately.
Many nearshore development teams are experts in both digital and Agile methodologies and workflows, and they can help your team adopt a high level of proficiency.Communication and collaboration are important to nearshore developers, and you will likely find that there are few cultural barriers between you. Nearshore developers are proficient in the English language, and they stay up to date on U.S. current events and pop culture, which helps eliminate miscommunication and confusion between team members.
One of the main reasons U.S. companies partner with nearshore development teams is the potential cost savings. The economy took a massive hit in 2020, so reducing expenses and overhead — such as salaries, taxes, acquisition fees, and HR costs — is good for the company’s bottom line.
What to Look for in a Nearshoring Partner
When vetting potential nearshore outsourcing partners, due diligence is essential. Here are a few key considerations:
- What kind of training and certifications does the nearshore talent have?
- Are there any local or international laws that will affect the partnership?
- What is the nearshore company’s policy on intellectual property rights and protection?
- What security protocols are in place to protect both parties?
Partnering with a nearshore software development team can reduce or even eliminate many of the challenges organizations face in the wake of the COVID-19 crisis.
Pentalog’s nearshoring teams are based in 16 locations on four continents, so no matter where your business is located, Pentalog has skilled developers and IT experts near you.