In the past, offshore outsourcing has been the preferred method of delegating various business operations to increase efficiency and reduce costs. However, nearshoring is a recent development proving a worthy alternative to offshore outsourcing for many companies. Companies can hire a nearshore software development company to provide software solutions to their problems. Read on to learn more about nearshore software development and its benefits.
What Is Nearshore Software Development?
Nearshore software development is the process of contracting services from a third party near your country’s shores hence the name. Sometimes, your countries, for example, the United States and Canada, may share a border.
There are many competent software developers all over the world. However, some can offer the same service for a much lower price due to economic factors.
Geography presents benefits and challenges to businesses, so more companies are considering nearshore software development. Businesses will look to use the geographical difference to their advantage.
Differences between Nearshore And Offshore Software Development
As stated above, nearshore software development companies use talent in close proximity to your country. On the other hand, offshore software development sources from a global talent pool.
Offshore outsourcing involves handing over a business process or operation to a third party, e.g., customer support. For example, a company in India can handle Verizon’s customer support.
Nearshore software development will also involve using a third party for a business process, but they are typically an extended branch of the main business. Since they are so close, the parent company retains much control and can manage the operations.
With similar benefits, nearshoring is the better choice for businesses because of control and other factors.
Justification For Outsourcing
Every company must devise reasons to justify a particular business operation or process. The decision has to make financial sense while increasing the firm’s efficiency.
Cost is often the primary factor influencing the decision to outsource. It will also significantly determine whether a company chooses nearshore or offshore outsourcing.
There are other factors to consider, including the availability of required skills. Outsourcing can only be justified if you can get the same skilled labor in another location for a lower price or if your country lacks skills.
Scaling is also an important issue to evaluate to justify outsourcing. Some companies may outsource to expand or contract production according to their estimates of future requirements.
Best Practices For Outsourcing
Outsourcing is an individual decision for each company. However, there are best practices that ensure outsourcing leads to the desired results.
Building relationships is one of the best practices for outsourcing. Both sides need to be in sync for optimal results of a project. Therefore, time and resources must be committed to fostering the relationship.
They are considering the outsourcing firm’s portfolio of experience and results, not just their prices. Though they may reduce costs, their work may be lackluster.
Ensure the ownership of the projects, and their results are established. Otherwise, there will be legal wrangles in the future.
Ensuring the project scope and schedule are vividly defined is also paramount to the project’s success.
With remote work becoming the norm, nearshore outsourcing is becoming a more attractive choice for more businesses. Technological advances have also made outsourcing easier than ever before. There is a growing community of proficient software developers worldwide, and firms should take advantage. With effective collaboration, nearshore software development is a path to success.
