Blog

Nearshore Outsourcing: the new business adaptation strategy.

In this context, it is necessary that decision makers and collaborators find advantages in distance, beyond remote work. To achieve it, it is essential to think out of the box. Here is when we talk about Nearshore outsourcing, a strategy that finds its essence in geographical distance to take work teams beyond their expectations and the dividing lines between a given territory.

Besides, today is the best time to talk about how to guarantee productivity and diversity in a company that wants to stay competitive at all costs.

In this article you will learn everything about this new strategy that is changing the landscape for all organizations globally, as well as the best practices and factors to consider if you are planning to implement it.

What is Nearshore Outsourcing?

The reason for its importance in the post-COVID Era

The last few years determined the current scenario; they forged a work reality where distance is no longer an obstacle to getting work done or communication flowing effectively in the workforce.

Given this, remote work is already more than just a global trend. It is a benefit required by most collaborators. It represents more balance in their personal life, higher productivity and more comfort due to the economic resources saving that working at home represents.

According to data from Gartner, with the increase of hybrid and remote work, traditional companies are evolving towards a distributed environment, made up of geographically dispersed workers.

The consultancy notes that by 2023, 75% of organizations exploiting distributed business benefits will experience a revenue growth 25% faster than their competitors.

Faced with this trend, organizations are looking for a way to make the most of talent and searching for new visions that generate innovation, regardless of their operation site.

Here is when the Nearshore outsourcing strategy becomes present, which consists of hiring a remote team, but geographically close to the company of origin.

The final goal is to generate a strategic work scenario where cost savings and cultural understanding are the best allies, since they generate increased value for the organization that hires a Nearshore service.

It may sound strange, but Nearshore outsourcing is not a new term. This concept gained popularity in 2002 when a mature nearshore model was observed of a Mexican company working for an American business, with headquarters in the USA.

This business model is designed for companies that generate a greater volume of information in different countries, and in order to process it successfully, it is necessary to have the diversity and communication that both countries offer as a whole, in addition to specialized software tools for handling this data in real time and in the formats required to generate intelligent databases.

Thanks to this operation, the nearshore is positioned as a highly strategic model, since it uses distance to its advantage and generates additional value for companies that want to improve the flow of information between the countries of their interest.

Nearshore is also characterized by recognizing what another culture can contribute to the value of the business, since it drastically reduces the barriers of the native language and the work culture established in each country.

Organizations recognize these advantages that only Nearshore outsourcing can provide, which lead to increased competitiveness and intelligent decision-making inside and outside the company.

Nearshore outsourcing advantages

If a company's operation is based in two countries, what are the main advantages provided by this model?

There is no doubt, when talking about an operation model, Nearshore is approached as a complete and comprehensive strategy, designed for those companies that operate in more than one geographical spot. Here are some of the advantages of its implementation.

  • Internal processes optimization.

By having an external service provider, the organization's work team has the opportunity to take advantage of the outsourcing of activities and generate a better organization of the working force, prioritize tasks and improve existing processes, which generates constant innovation.

  • More competitiveness and a new vision

By leaving some relevant tasks in third party hands, the company processes better the information and data obtained, so that decision-making is streamlined and becomes an intelligent and effective process, which improves competitiveness and response time in the market.

Meanwhile, the contracted team generates value by providing new ideas and solutions, which are carried out specifically for their client, making it possible to generate value remotely.

  • Geographical proximity: more than an advantage

It is possible that geographical distance is the most well-known virtue of the Nearshoring model, since thanks to the proximity and similarity of the time zone, it is possible to improve communication and take advantage of the cultural compatibility of both countries, which align with the goals and objectives of the organization.

  • Low costs and use of methodologies

Using external teams reduces costs considerably, one of the main goals of the Nearshoring model. On the other hand, the implementation of this model requires the use of agile methodologies, reducing the margin of error and the interruption of operations in the process.

Nearshore and Offshore and Onshore: differences and virtues

The use of distance manifests itself in different modalities, which is why Offshore and Onshore are deployed from Nearshore, two ways of taking advantage of time and distance at its best. There is no doubt that organizations need to cover different needs when it comes to IT, so its adoption must be totally intelligent and strategic.

  • Nearshore: It is the model where a third party works for a country with a common border, which facilitates communication and transfers if necessary.
  • Onshore: It is contracting the services of a third party (remote or face-to-face) located in the same country. There are no communication and culture problems thanks to the fact that the distance is practically zero.
  • Offshore: This type of services contracting implies that the third party operations are established on another continent, which offers considerable economic savings.

As you can see, each model offers advantages and are customizable to each organization's needs. Some organizations may combine the best of each model to take their operations beyond the conventional.

Mexico - USA: a priceless example

The existing link between Mexico and the United States has always been significant, which is why Nearshoring and its different modalities have made the most of it in recent years.

Nowadays, Mexico is an attractive country for companies that want to implement a Nearshore outsourcing model, thanks to the relationship between quality of services and cost savings when hiring Mexican labor.

In addition, the proximity and cultural similarities of both countries are taken full advantage of, largely due to the social, economic and political context they share.

Besides, with the entry into force of the new Free Trade Agreement between Mexico, the United States and Canada (T-MEC, formerly NAFTA), Mexico became a key player for global companies seeking to maintain a competitive position in the North American market.

Thanks to these new measures and the increase in the hiring of Mexican labor, specialists in IT technology development have generated more experience and capacity in their specialty area, which keeps them as attractive personnel for their hiring of these services modalities.

In addition, the time difference between Mexico and the United States is a maximum of 3 hours, which facilitates communication and follow-up visits if necessary. Besides, this time difference does not make it impossible for work teams to modify strategies immediately.

Outsourcing Software Development: A big revelation

Software development outsourcing has become a big revelation in recent years, as more and more organizations turn to it for their IT projects.

According to the “State of Software Development Report”, 66.62% of software development companies have outsourced companies to carry out their projects. The high demand for software applications and services is forcing more companies to implement outsourcing to meet the needs of their customers.

The outsourcing software development strategy is now viable to reduce costs and add value to the developed software.

To be carried out, this type of strategy uses the client-supplier relationship as the main advantage, since it is about creating software by hiring personnel outside the company, for which it is necessary to plan a whole work process that goes from development and planning, to scalability and product maintenance.

The Outsourcing Software Development proposes to acquire the services of external people in different modalities; It may consist of external professionals who work directly in the organization, external team dedicated exclusively to working on the project, or they may be hired on a temporary basis (per project).

The advantages of this type of contracting are those offered by the Nearshoring model, only that they are focused on the development and delivery of the software in question.

Keys for a successful Outsourcing Software Development

Is Outsourcing Software Development really worth it? What is the best procedure or key steps to follow to carry it out? If these questions come to your mind after reading the previous information, don't worry, here we clear some doubts and realities that surround this way of creating technology.

  • Agile methodology is essential

When it comes to working with an external provider, the implementation of an Agile methodology is essential to achieve successful project management and with the least possible margin of error.

By using an Agile methodology, it is possible to generate a better use of resources between a company and a provider from the beginning of the software development, as well as reduce the possibility of duplicating efforts or other problems related to the project management.

Likewise, Agile is based on the generation of sprints that allow learning from the beginning of the project to the delivery of the final product, which reduces the margin of error and allows its improvement and scalability.

  • The best staff at your service

It is proven that this type of service attracts the best available talent at affordable costs, so you can be sure that you will have the best staff focused on solving the needs of your project.

On the other hand, combining the previous aspect with the Agile methodology, makes it possible to make real time adjustments without affecting the progress of the project and the continuity of the company.

  • Uninterrupted communication

Having good communication is key to carrying out the development of any product. In this sense, Outsourcing Software Development implies that work teams have impeccable, uninterrupted and fully controlled communication (in real time).

It is essential that the workforce involved in the development of the product communicate when necessary and carry out the appropriate follow-up, since this allows the client to take full control of the project and visualize the workload assigned to each collaborator.

  • Setting goals leads to optimization

By defining from the beginning of the project the goals and objectives of the work teams, work optimization and improvements generation are easier to achieve.

There is no doubt that task assignment represents a better organization and resources optimization, so it is essential to have this planning throughout the development of the product.

If a work team meets its goals during the software development process, time and activities are optimized. This gives the opportunity to generate new ideas that add value and new functionalities to the final product.

Choose your partner, choose the best

We know delegating certain tasks to an external provider is not an easy decision to make, however, the key is in the provider chosen. It is essential to consider some aspects for software development outsourcing, such as:

  • Identify your initial needs and goals.
  • Your candidate must have experience in the market, which must be supported by a good track record and different sectors.
  • Search for information on their previous work such as case studies, consult their blog and contact the supplier directly to present your requirements.

Now that you have this information, are you ready to have the best nearshore service provider with extensive experience in developing software tailored to any sector?

Look no further, at Icalia Labs you will find your ideal technological ally.

With headquarters in Monterrey, Mexico, we use geographic proximity to the United States to provide nearhshore outsourcing of software development projects based on Agile methodologies.

With a full domain of the English language, at Icalia Labs we focus on making processes and working ways easy to manage under the total supervision of field specialists.

Thanks to our extensive experience in the market,we are able to provide quick and agile results, in addition to ensuring high quality in our services and high commercial results aligned to the needs of our clients.

Stop your search, contact us and get ready to take your company beyond the limits imposed by geographical borders and cultural barriers between two countries.

Let us answer your questions about Software Partnerships and get started!
Get a quote
Related Articles