For the past few decades, Outsourcing has become a key element for businesses in the US and all over the world. Companies have been outsourcing to several locations since the second part of the 20th century, always looking for the right outsourcing experience that matches their business goals.
Offshore and Nearshore Outsourcing
For many years, some locations have position themselves as the go-to places to do outsourcing, providing competitive rates and good talent to perform the tasks required by the customer. However, such locations have some very big drawbacks like time separation, cultural differences, and language barriers. Therefore, the total cost of the outsourcing engagement may not be as attractive as the promise of outsourcing first appeared.
Outsourcing IT or software development, once revolutionary, has become a necessity for most companies in the United States and all over the World. Picking the right partner to create an outsourcing relationship is a key for success and failing to make the right outsourcing decision can lead a partnership to fail and create a very high potential risk for the customer.
Most traditional IT outsourcing destinations include Asian countries like India and China as well as countries in Eastern Europe like Ukraine or Poland. Such places have grown into a recognizable source of outsourcing talent, however the lack of proximity to places such a as the United States make the experience of outsourcing not the ideal for an extended team as a service option. Additionally, there are communication challenges due to time zone differences.
Working with “Offshore” destinations often carries a series of factors that increase the difficulty of collaboration. Many times stakeholders in the US will have to attend late night meetings or have to wait for days, literally; to have their questions and issues resolved. Situations like those, among many others, have made companies look for partners that besides providing the right talent and skills, experience and professionalism have the one attribute that Offshore cannot provide: proximity. This is a key advantage to nearshore outsourcing.
On June 26th, I had the opportunity to present a webinar along with Guillermo Ortega, COO of iTexico, discussing these common issues that companies in the US face every time an offshore partnering strategy is put in place. Besides analyzing these drawbacks, we had the opportunity to discuss a relatively new alternative that has gaining a lot of momentum and has positioned itself as a true viable option when deciding to outsource operations: Nearshoring.
Nearshoring (or Nearshore) refers to a strategy that focuses on outsourcing operations with a partner within the immediate region outside of the country. In the case of the US, it’s immediate near shore partners can be located in Mexico or Canada. While Canada provides a considerable level of attractiveness as a nearshore partner, Mexico’s lower cost structure, large talent pool and expertise provide a higher value for US customers. There are many places in Mexico where nearshoring can succeed. However, we’ve found that the best mix of a stable tech ecosystem, great talent pool available, ability to travel back and forth and many other factors can be achieved when using Guadalajara, one of Mexico’s largest cities, as the location for a development center.
The slides and video of that webinar are now available and embedded in this blogpost. Myself and all the team at iTexico sincerely hope you enjoyed the presentation. Please include your comments and we’ll make sure to get back to you. See you in our next webinar!
About the Author
David Sandoval is the Creative Delivery Manager at iTexico, entrepreneur, and UX/UI designer with more than 7 years of experience in web application and mobile app design, usability and product design. He holds a Bachelor in Information Systems and an MBA in Marketing by La Trobe University in Melbourne, Australia.
— Jeff Haynie (@jhaynie) July 3, 2013