Nearshore: A Better Experience in Software Development?

We would be lying if we said we didn’t have our own preferences when it comes to outsourcing selection. Traditional outsourcing avenues, especially in tech industries that partner with companies in China and India, have seen their own share of criticism and lack of enthusiasm in recent years. That’s not to say there isn’t still a call for it, just that the market is seeing a shift in what kinds of outsourcing gets the job done best.

Let’s be clear: all options of software development outsourcing come with their fair share of advantages. Onshore, offshore, and Nearshore options cover a wide field of pros and cons that appeal to different types of businesses and partnerships. For clarity:

• Onshore: qualifies as any outsourcing done within the same country where the company is located.
• Offshore: outsourcing to overseas countries, such as India, Russia, China, or the Ukraine to name a few.
• Nearshore: outsourcing to any nearby countries that fall within similar time zones and geographical proximity, such as Canada, Mexico, or any South American country for American companies.

Spoilers: we have a soft spot for Nearshore outsourcing. It’s not for every company, but we believe it’s for most companies that are looking for cost-competitive productivity and growth. Be that as it may, how do you actually define your parameters for choosing between these three options? As much as we will exalt the Nearshore options, the question remains whether it’s the right choice for you.

What is Considered a Better Experience in Software Development Outsourcing?

The decision befalling which outsourcing option to choose does not exist in a vacuum, obviously. What do you hope to achieve through this? What outside influences may affect your company through this partnership? Is your infrastructure prepared and capable of handling any consequences that may occur? Pursuing any of these software development outsourcing options is not an idle action.

There are numerous factors to consider when deciding to go for either onshore, offshore, or onshore outsourcing. Which one you opt for boils down to your organization’s specific goals and current possibilities. As always, you need to be honest with your current status: which option is best fit for what you need right now?

Obviously costs of talent and development are an important factor in the equation, but more and more businesses are being driven to make better total value-based decisions that include factors such as:

• Access and availability to talent
• The convenience of time zone alignment
• Consistency and quality of work
• Teaming collaboration
• Improved communication
• Better cultural alignment

Each of these variables is a determinant in one of the most integral aspects of outsourcing: your experience. It’s a junction that’s more than a simple business transaction, it’s an agreement that bears weight on how your company proceeds from the handshake on. If you happen to be looking for a one-time deal, that’s fine, but most companies will find that outsourcing is a long-term contract, meaning you’ll be seeing a lot of the other end for quite some time. Like we said, it’s a partnership.

A better experience with a software development provider will be the one that in the end leaves the client with a great result in project delivery, communication, cost competitiveness, and time-to-market. Due to the rich variety and individuality that every business has in particular needs for software development outsourcing, there will be no one-all-be-all in terms of top providers. There’s homework that needs doing for determining that.

The top provider will be the one who most closely adheres to the speciality required to fulfill your evaluation criteria. This criteria, which varies from case to case, is based on aligning values, business model, technical fit, and needs for collaboration and teaming. Business-driven sourcing strategies must balance the benefits and risks of various options while service providers are challenged constantly with dynamic and disruptive market conditions within the outsourcing market.

The term “top provider” is a little bit misleading. There’s no hierarchy determining which outsourcing developers rank higher than others beyond the virtue of their own reputations. When it comes down to it, the top provider is in the “eye of the beholder,”, which would be you, the client. Your best judgment is the critical factor in creating a great experience through this venture.

Is Time Zone Alignment Important?

Yes.

Let’s run a scenario. You’ve established a partnership with an overseas outsourcing company, they seem to check off all the boxes and you’re feeling optimistic. This company happens to be headquartered in China. For the first week or so everything proceeds swimmingly. Then, suddenly, you receive an update on the current project that will require extensive corrections to fix. Here’s where things get dicey.

You’re alerted to this 10 AM Monday morning. You send off a message to your partner. Right now, in China, it’s 10 PM. The office is closed, no one’s working, which means it’ll be another 12 hours or so until they receive the request. While you’re out of the office they get the message and, assuming nothing else goes wrong, they get to work. If they need clarification, they won’t get it, cause you’re out of the office. They finish it in a day or so and send it back. Done.

The time elapsed to close this thread of communications took between 2-3 days at best. The chances or direct communication were slim to none, which impacted how quickly the project could proceed, and in the end cost more time than needed.

Time is money. Time delays caused by the overall slow flow of information cut into your workday productivity, which happens to a lot of US based companies when outsourcing to offshore accounts. There’s very little overlap with schedule, and aligning work hours, especially if you choose to outsource to India or China, takes considerable effort.

Real time communication and collaboration is key for high-quality, low-cost, and time-efficient software development.

According to Meta Group, lags in productivity due to communication issues can add as much as 20% in additional costs to an offshore contract. These hidden costs may not seem like much in the short-run, but software development isn’t a field where the first product is shiny and complete. It’s trial and error, which means back-and-forth collaboration that’s severely impeded when you can’t easily talk to the other end during normal business hours.

You want a mutually good experience with your outsourcing partner, and jumping through these hoops to adequately communicate doesn’t help. A better experience in software development will allow companies to build relationships that last with their software development service providers.

Are Costs The Most Determining Factor?

Not always, and it’s increasingly looking that way. If you go on Amazon to purchase a new product, like a pair of scissors or a blanket, will you immediately purchase the cheapest option? Probably not. They may get the job done, but how well and for how long? There is almost always a tradeoff between price and quality of the product, and it’s something to be wary of.

If cost is the ultimate and determining factor when deciding an outsourcing location, far offshore regions are your best bet. No country can beat the hourly rates in India, but there are other things to consider when faced with a tempting offer like that. Those great hourly rates may be great in the beginning, but the longer your partnership lasts, the more costs will accrue due to all the inconvenient situations that arise when dealing with providers who are not culturally aligned or in a close time zone.

Like with those new pairs of scissors, you’re looking for the Goldilocks option. We need to shift the focus from the cheapest choice and instead avert our attention to cost competitive options. Visit our article on the hidden costs of offshore development to learn more.

Does Nearshore Provide Improved Communication and Collaboration?

Take what we already know to be true. Mexico and the United States share a border and are both Western nations. Due to this, the US and Mexico have shared cultural similarities through frequent interaction and cultural crossover. Not only that, but our proximity means that we share the same time zones. These qualities mean greater collaboration through similarity and cultural cohesion, as well as better communication through shared languages and time zones. There are as few communication gaps between our countries as you can get.

Is Cultural Affinity Vital For Project Success?

Being raised in a different culture has a monumental impact on how we treat others, perceive ourselves in the sum of the whole, and ultimately how we conduct business. A Japanese company has a completely separate model to how a European company runs its organization and interacts with other corporate entities. You can see how a company working with a similar culture is easier than working with one from a different part of the world.

This cultural disparity makes simple requests become a huge hassle between teams that don’t share the same culture. This is an issue that pervades offshore outsourcing, as that’s where you’ll find the bulk of cultures that are identifiably distinct from our own. Nearshore countries are used to doing business the same way as the U.S., making them an easier force to work with.

Conclusion

We’re not here to condemn onshore and offshore outsourcing partners as being the bottom of the barrel selections, that’s simply not true. What we will say is that out of the three choices you have to outsource from, Nearshore has the best potential to deliver the highest quality experience. Your relationship with your outsourcing partner should be fruitful and mutually beneficial, but even more than that you should find your collaboration easy and enjoyable.

Coming to that final decision does take some genuine introspection into the own goings-on within your company. No sense in jumping in the deep end of the pool and finding you can’t swim, right? Once you’re there, keep in mind what makes Nearshore so appealing for outsourcing: similar time zones, aligning cultures, and cost competitive services with high-quality deliverables.

iTexico is a premier organization that’s here to help you with your Nearshore needs. You deserve the best possible experience and we’re here to provide you with all the advice, guidance, and assistance you need to get there. To get you started, we’ve got just the thing to help you with making your decision. This iTexico blog article contains the ultimate guide for the decision maker with criteria from Gartner, giving you the best chance to make the most beneficial choice.