Software outsourcing has helped companies in all industries to stay productive, save on costs, and complete projects on time. Traditional outsourcing models, such as offshoring, proved to have many flaws that are only obvious in retrospect. The limitations of the offshore model pushed companies to come up with new solutions. At this point, the nearshore model seemed like a perfect fit.
In this article, we will review nearshore software development basics and how US-based companies can leverage development teams in Latin America.
Understanding Nearshore Software Development
It involves delegating partial or complete software development tasks to companies or consultancies that employ IT talent in countries geographically close to your country. For example, a company in Austin, TX, hires a React Consultancy that provides them with three senior software engineers based in Colombia to complete critical parts of their corporate chat application.
An additional example includes a company in San Francisco, CA hiring a Ruby on Rails Consultancy to develop iOS and Android apps that are fully integrated with their existing web application. The consultancy built a dedicated team based in Latin America to complete the project.
Different engagement models fit all kinds of businesses and projects. Nonetheless, the foundation is the same: qualified IT talent, located within a minimal time difference of 1-3 hours compared to you, working as part of your local team or working on developing a specific project.
Nearshore software development helps companies get their products and ideas to market more quickly. Companies that do not specialize in software development can focus on their core expertise while still building a quality product. Let’s analyze the benefit for US-based companies of having Latin American software development teams:
Advantages of Latin American Development Teams:
- Help to keep up with huge fast-growing projects. These types of projects often face a lack of skilled developers to stay on track with the plan. Nearshore outsourcing is a great option in this case. Part of the project can be delegated to a software consultancy for taking the load off your main team.
- Software projects are developed more quickly. Part of the entire development cycle can be outsourced to skilled developers and managers. Latin American development teams help you avoid delays to other sectors of your company by delivering the projects on time based on mutual agreements.
- Software development costs can be reduced. Outsourcing your software development projects is actually much cheaper than having onshore talent. Nearshore outsourcing helps your company skip training in-house developers and providing them with specialized resources and tools that involve an expensive upfront cost and time.
- Spend more time developing your business. Focus on your business’s core expertise and leave the software development to highly skilled professionals.
- New ideas and knowledge. When outsourcing through a consultancy, you get the knowledge base they’ve built over time. The members of FullStack Labs Team of more than 100 software engineers share their expertise with one another, so when one developer is stuck with an issue it only takes one Slack message and a couple of minutes for them to get assistance from other skilled professionals.
Disadvantages of Latin American Development Teams:
- Offshore outsourcing is still cheaper than Nearshore. Leaving all the negative points of offshore aside, it still provides the lowest rates.
- Lack of clarity regarding Project Management and Quality Assurance. Some consultancies undermine the need to clarify who will be responsible for these two tasks. That’s why we always define who will be responsible for these critical tasks.
- There is a lack of face-to-face interaction with technical leads and team members. Even though the team's location is just a couple of hours away, there is still a need to take a plane in order to meet technical leads and team members face-to-face.
Nearshore Plus, Our Approach to Nearshore Software Development:
At FullStack Labs, we practice what we call Nearshore Plus. That means our team is a mix of US-based and Latin American designers, developers, and project managers. But every project, no matter its geographic mix, gets a US-based technical lead and project manager to ensure physical proximity and maximum communication.
We identified that the Nearshore model could provide more value to our clients by also adding local resources. If you want to learn more about nearshore software development and want to know if it’s the right approach for your business, drop us a line — we’ll be happy to chat with you.