Nearshore, nearshoring, or nearshore outsourcing are some of the terms used to describe the practice of getting work done or services performed by people in neighboring or nearby territories rather than in your own country.
In the particular case of the United States and Canada, it describes outsourcing to Latin America. These particular terms and practices have been around and in use for about twenty-five years, in that time span we’ve seen an explosive growth of companies that offer services and goods from almost every country below the United States border, selling their services in the U.S. and Canadian markets.
Some of the areas that have seen superior growth have been the software development, IT services, and BPO industries. During the last few years, these Latin American service providers have been challenging the dominance of the well-established Indian outsourcing industry, and are now demonstrating that smart, innovative companies from the Latin American region can handle themselves in the most competitive business market in the world.
In this day and age, it’s become less and less necessary for companies to have their staffs working under one roof, alongside the fact that it’s more difficult to find the correct staff, with the right training, supervision and conditions to deliver the expected results. That’s why nearshore outsourcing has become the best alternative, providing unlimited advantages that can lead to timely improvements inside your organization, helping you face the decisive challenges in today’s high speed technological world.
That’s why it’s important to analyze and understand nearshore outsourcing services before starting a business relationship with Near Coding Software Development Services.
In this article we would like to show you how nearshore software development services company can assist you, the services available, the solutions these services offer, but also the challenges, the pros and cons, and the “true” reality surrounding these services.
Understanding the type of nearshore software development company, you are working with
For any company, the location, human resources available, products being developed, amount of capital available to invest are just a few of the characteristics and features to take into account when you are thinking about acquiring nearshore IT services, including but not limited to software development, Infrastructure administration, AI development, cyber security, and other related areas.
The nearshore software services companies or entities that are working around the world today will range from a one-man organization to an entire enterprise with hundreds of employees and collaborators, and these factors will not only determine the relationship, prices, quality, types of communications, but the overall results obtained from working with these organizations.
We can divide those organizations in the following types:
- Freelancers/Independent Contractors – in general, freelancers will charge slightly higher rates compared to the average hourly rate of a permanent in-house employee. Their fees often include an additional padding that covers their operating expense. Freelancers with less experience may initially charge less, but the quality of the product may not be so good and the development timeline may be extended.
- Small and Mid-sized agencies (under 50 software development or IT professionals) usually offer the best balance of quality versus pricing. Most are capable of handling mid-to-large projects within acceptable timelines. Other services such as dedicated PMOs, dedicated training, or improved services like quality control or dedicated customer services might not be attainable with these providers, but the prices might be more accessible than high scale professional outsourcers and large multi-national enterprises.
- “Professional outsourcers or large multi-national enterprises” usually charge the highest hourly rates that match their status. While the quality of their products will likely be superb, the development timeline will be extended due to the inner bureaucracy within these companies (and you will be billed for those hours too), but they’re able to offer more support, back up possibilities, business development and satellite services, among other enterprise solutions.
Services a nearshore software development company can provide
When it comes to software development, there is increasing attention paid to code quality, thus establishing very clear requirements, to be able to, implement the work pace, to move into production at a faster rate.
Software development is not a “core skill” of many companies and outsourcing these services makes perfect sense for many. There is extreme pressure to find outsourcing vendors who can truly provide a professional software development service.
Among the most common services, you can find:
- Dedicated nearshore development: Simply put, a dedicated development team is just like a branch of your internal software development department, only it’s not co-located. This extension to your own software development team gives you access to extra technical talent AND lets you adapt your workforce on-the-fly to changing needs.
- Custom software development: Software development is a distinct operational activity in IT services. The software development life-cycle is a well-studied technique for planning, creating, testing, deploying and delivering satisfactory information systems. The process to develop a software system that fits your needs is complex, but a seasoned provider should be able to deliver solutions regardless of the location where your operation takes place.
- Application maintenance: To give support to current applications or systems is a service that most providers will offer, but not all of them. Because there’s such a great demand for newer technologies, some software development companies would rather pass on providing maintenance and support services and in this way avoid having to give support to legacy technology. Be sure to find a provider that can and is willing to work with you on every facet you need, if not, you may find yourself regretting your choice of a nearshore software development company.
Benefits of a Nearshore Software Development Services company
Lower Rates but same customer satisfaction: The desirability of lower programming rates, compared to the US continues to be the main reason that companies take into account offshore software development. Certainly, nearshore outsourcing provides these savings also. Nearshore outsourcing providers in the Americas (e.g. Latin America and South America) have highly skilled programmers working at hourly rates that are much lower than comparable programmers in the US.
Why are the rates better, you may ask yourselves? In most cases the US dollar is stronger than the local currency and of course many nearshore programming companies are in countries where the wage scale is much lower than in the US. In other words, the nearshore programmers are paid well – but the cost of living is lower in their native country compared to the US.
When you are dealing with time zones, it’s a plus to share the same zone as the continental US & Canada. In traditional offshore outsourcing, many US companies have faced challenges in working effectively with an Asian or Indian software development company because of the time zone differences. In a recent survey, one third of US companies that outsourced to India considered the 10-hour (or more) time difference to be a big challenge. Very often the “core team” in an outsourcing software provider will be working hours that are completely opposite of normal US business hours. Unless carefully managed by you and your outsourcing provider, these work hour differences can become a significant drag on effectiveness and make timely collaboration problematic, not to mention the added cost of working extra or unusual shifts..
In contrast, nearshore outsourcing programmers are working in time zones that are virtually the same as your company! The workday overlap between the north and south permits a high-collaboration relationship, which is so important in most software-development methodologies like Agile and Scrum.
Face-to-face meetings are far easier to coordinate. Even US managers who might be squeamish about a 20+ hour trip to Asia would likely not hesitate to make a trip to Latin America or South America – where the travel time needed is much less than the time used to travel across the continental the US.
Almost no language and no cultural barriers
Universities in Latin America have robust IT programs. They produce software engineers in numbers that can easily support software outsourcing commitments. English as a second language is prevalent and continues to be the “default language of commerce” for companies that intend on conducting business outside their country’s border.
Perhaps just as important, most of these countries share a common “Western Culture” with the US. There is a strong connection and affinity to the US in commerce and popular culture. US company brands are well known in these countries. US political and other national news are viewed more regularly than in Asia, or even Europe. Even US music and TV shows have been re-broadcast to Latin America consumers for years.
You may ask yourself, what can go wrong?
Keep in mind that adding new features will impact/effect the systems that are currently in place. The main goal in any systems change should be to ensure that the work done has the best possible impact/effect on the system without having to do any unnecessary work. The making of new technology has to be about solving problems within the functioning system. The use of new technologies, helps create change and growth, which are essential to the success of any software development project, seeing this early on can give you the opportunity to keep your project on track before it gets derailed.
A great way to avoid making mistakes is keeping in mind several basic ideas, like, small changes over time have a huge effect on any system and always look for the problem break down, that is, what is the simplest solution that can be put into action? Can this be improved a little bit more?
When your company is in the market for software development talent, taking a thoughtful and measured approach remains paramount. A well-considered hiring process brings your company the bright new employees vital for its success whether short or long term. This is arguably the most important task your organization will undertake.
In summary, it remains paramount that when your company is looking for software development talent in today’s fast paced market, taking a thoughtful and measured approach remains of the utmost importance.
At Near Coding Software Development Services, we always take the time to learn about the clients we build software for, this helps us create empathy and insights to our clients’ needs and to have a better understanding of when to ask for guidance.
At Near Coding Software Development Services, we provide support and maintenance to current applications and systems.
At Near Coding Software Development Services, most of our software engineers want to work with a company that offers telecommuting and we complied because in this day and age of “ChatOps”, programmers can be as, if not more, productive working from home as working in the office, another added value to telecommuting is that a flexible work-from-home policy will ensure we attract the best developer talent available in the market.
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