IT and software development outsourcing has gained popularity in recent years as a strategic approach for businesses to manage their IT needs, as well as their expenses. But one particular method of outsourcing called “Nearshoring”—where companies leverage technical resources from neighboring or nearby countries—has attracted significant attention as the most efficient, cost effective, and ultimately successful version.
In a very short period of time, Nearshoring has revolutionized the way enterprises access technical talent, manage IT spend and drive digital transformation projects. And here are 10 reasons why.
Reason #1: Proximity and Time Zone Alignment
One of the most significant benefits of nearshore IT outsourcing is proximity. Unlike offshore outsourcing, where teams are located on the opposite side of the globe, nearshore providers are typically situated within a similar or overlapping time zone. This proximity allows for better real-time communication and collaboration between in-house teams and external IT partners. The convenience of shared working hours promotes faster response times, reduced delays in project delivery, and more efficient issue resolution.
Reason #2: Cost Efficiency
Cost savings are a driving factor behind many businesses’ decision to embrace nearshore IT outsourcing. While nearshore providers come at a similar rate as their offshore alternatives, it is not uncommon for a nearshore IT resource to cost 30% less than a U.S. based developer. And with nearshore IT, additional savings often come in the form of reduced travel expenses (you visiting them, or them visiting you) and faster project completion timelines due to the time zone alignment mentioned previously.
Reason #3: No Language Barrier
As opposed to its offshore counterpart, language proficiency is almost never an issue with nearshore IT outsourcing arrangements. Many nearshore countries like Costa Rica, Mexico and Colombia prioritize English language education from a very young age—meaning nearshore developers and IT staff can communicate both verbally and in writing with existing U.S.-based teammates and partners, at an expert level of proficiency.
Reason #4: Cultural Compatibility
By definition, nearshore IT and software development countries are in close proximity to the United States. This means people in those countries use American products, consume American media, and interact with Americans frequently. This inherent cultural familiarity and shared value system offers a number of HR-related benefits for DEI-forward and culturally-sensitive organizations, including reduced misunderstandings, increased trust among staff, easier conflict resolution, simplified team dynamics and ease of team building. Also, given this close cultural alignment nearshore IT consultants are easily onboarded to existing projects, without disrupting team chemistry or productivity.
Reason #5: Availability of High Quality Talent
Nearshore regions are loaded with highly skilled and well-educated IT and software development professionals, many of which have completed internationally-recognized training programs, or attended highly accredited universities. These professionals also hold the same globally-recognized development language, platform administration and project management certifications as your U.S.-based team members. And most importantly, the available talent pool is much more diverse in a nearshore region—meaning a nearshoring strategy can allow your company to scale their IT and software development teams much more quickly.
Reason #6: Regulatory Compliance and Data Security
In industries like Healthcare, Finance and Cybersecurity, regulatory compliance is of paramount importance. And unlike their offshore counterparts, many countries near or adjacent to the United States are well-versed in both North American and International regulations—having adopted the same rules for data sharing, data privacy and data security on a governmental level. This ensures that nearshore teams can help your organization efficiently develop safe, secure and compliant solutions—even in the most heavily regulated situations.
Reason #7: Closer Management Relationships
As mentioned previously, one of the keys to success for nearshoring is proximity of the nearshore team to your U.S.-based team. But this proximity advantage doesn’t extend only to the teams—it also extends to the managers and executives who drive those teams. The proximity of nearshore IT partners means that in-person meetings and site visits between your managers and their managers can not only be arranged with ease, but also at a much lower cost than traveling to regions like Southern Asia or Eastern Europe.
Wrapping It Up
Nearshore IT outsourcing is a strategic choice that offers businesses the opportunity to tap into a wealth of benefits—including cost savings, quick access to a skilled workforce, cultural compatibility and decreased risk. These advantages ultimately make nearshoring not only an attractive alternative to offshoring, but a better one for most U.S.-based firms.
If you would like more information on nearshoring an IT or software development team, please feel free to contact Excel directly by calling us any time at (612) 208-7465, or by completing the Contact Us form on our website. We look forward to hearing from you!