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Reasons to Examine Nearshore Outsourcing

11/24/2015
Nearshoring is the new buzzword in the growing area of web-based and mobile app development. Traditional outsourcing refers to contract workers or software companies in the Far East, China.

Nearshoringis the New Black

Nearshoring is the new buzzword in the growing area of web-based and mobile app development.Traditional outsourcing refers to contract workers or software companies in the Far East, China and India in particular. Nearshoring differs in that companies share a border or a landmass, typically possess a solid command of the English language, enjoy a similar time zone, and the ability to scale up in tech if needed. These sophisticated and experienced tech force extensions have sent U.S. companies running for a border--the South and Central American borders.

With many countries in the Latin America region becoming competitive in the nearshore movement, Uruguay in particular has emerged as a leader in providing highly skilled tech forces that are experienced in Agile methodologies, the choice for app development.

Let's look at four reasons why nearshore outsourcing is so successful:

1. TimeEfficiency

The timezone is often the same in South and Central American countries, making meetings much easier to manage while keeping travel expenses low. Work can go faster since it's completed in the same day (as opposed to overnight in India), resulting in a day's delay if corrections need to be made with little to no collaboration.
This time lag elimination is especially needed in the mobile app development world, where the pressure to develop and re-develop is hefty. In Agile development, which is used for top-level app development and increasingly required, team connectivity is a must. With teams in close proximity, in-person collaboration can take place with relative ease.

2. Talented Work Forces

Latin America has a large supply of experienced workers. In particular, Uruguay has emerged as one of the top providers of nearshore-ready IT staff. The country, with a population of around 3.3 million over 176,000 square kilometers, is one of the most progressive and stable countries in the Americas, and enjoys expansive government investments in tech for its students. As a result, Uruguay has emerged as a top supplier of highly competitive IT staff, making it ideal for nearshore outsourcing.

3. Language Proficiency

In 2014, the U.S. Census Bureau reported that 54 million people in the U.S. identify as Hispanic, making people of Hispanic origin the nation's largest ethnic or racial minority, which means in LatAm, language is not typically a barrier. Most countries In South and Central Americahave well-developed English programs. In Uruguay, studentsboast a high degree of proficiency--usually because in the tech sector, English is a requirement.And more importantly, South and Central America countries have a grasp of English that is noticeably better than that of workers in the Far East.

4. High Tech Compatibility

It's not an exaggeration to say countries in South and Central America are exploding with IT growth. The Uruguayan IT industry has enjoyed early and dynamic growth compared to other countries in the region, with a fast process of internalization that started in the 1980s. An overall thriving techsector in the region accommodates the investments made by big names like Microsoft, Oracle, and Cisco.

Silicon Valley-based funds are paying attention to nearshore development, too. Sequoia, one of the biggest funds in Silicon Valley and which fosters the growth of potential technology leaders, made an investment of $10 million in Latin America, with support for the Uruguayan company Scanntech.

In Uruguay, boutique software development is booming, with an excellent selection of companies with workers who have high degrees of specialization, and typically solidexperience.

Looking at the list above, it's easy to see why nearshore outsourcing is so successful. Add in traditionaloutsourcing cost issues - worker and production costs in China and India are rising, while Central and South American countries remain or are lowered--and take into account travel times and costs and the loss in productivity resulting from an inability to meet on critical processes, and nearshoring becomes not only smart business, but a necessary means to stay competitive.

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