{"id":59870,"date":"2024-05-19T10:16:08","date_gmt":"2024-05-19T08:16:08","guid":{"rendered":"https:\/\/intellias.com\/?post_type=blog&p=59870"},"modified":"2024-06-24T11:12:46","modified_gmt":"2024-06-24T09:12:46","slug":"nearshore-software-development-in-latam-the-definitive-guide","status":"publish","type":"blog","link":"https:\/\/intellias.com\/nearshore-software-development-in-latam\/","title":{"rendered":"Nearshore Software Development in LATAM: The Definitive Guide"},"content":{"rendered":"

While the world has been long abuzz with offshore software development, many in the U.S. and Canada have almost forgotten about the convenience and obvious benefits of nearshore outsourcing.<\/p>\n

The global market is a very dynamic and fluid environment. Conventional models of doing business constantly evolve, following the supply curve and the ever-changing geopolitical and economic status quo. Today, nearshore software outsourcing is steadily regaining its popularity as a highly manageable and cost-efficient alternative to building or growing an in-house team.<\/p>\n

As per a 2022 report by Accelerance<\/a>, at least 60% of companies outsource some of their software development tasks, and the combined revenue of the outsourcing market is expected to reach a whopping $133.3 billion by 2025. Nearshore software development accounts for a huge (and constantly increasing) percentage of this growth.<\/p>\n

Other sources are even more optimistic in their assessment of the share of outsourced IT functions, like this piece of the 2022 Deloitte Global Outsourcing Survey<\/a>:<\/p>\n

\"Nearshore<\/p>\n

Source: Deloitte<\/a><\/em><\/p>\n

In this article, we take a look at how the nearshore development model can make a dramatic change in the agenda of many companies in the U.S. and Canada. We\u2019ll also detail how these firms consider the key advantages and risks associated with this approach to building and maintaining software solutions of any scale and complexity.<\/p>\n

What, exactly, is nearshore software development?<\/h2>\n

As the term unambiguously suggests, nearshore software outsourcing is the practice of awarding projects to companies located in a foreign country or region that is relatively close to the client\u2019s location, often in the same time zone or one with a minimal time offset (typically between 1 and 3 hours, allowing for a very comfortable time overlap).<\/p>\n

Such engagements can range from one-time projects to hiring full-time dedicated nearshore development teams fulfilling the role of in-house experts with considerable cost optimization. On top of that, you can enjoy the simplicity of traveling to your nearshore software team\u2018s location at any time, and stronger bonds between you and your nearshore development partner (in fact, Deloitte states<\/a> that 87% of organizations view external workers as an integral part of their workforce).<\/p>\n

Let\u2019s take a closer look at the types of outsourcing that are typically used in the industry.<\/p>\n

What are the types of software outsourcing?<\/h2>\n

In general, outsourcing comes in four distinct forms:<\/p>\n

 <\/p>\n

\n\n\n\n\n
Onshore outsourcing<\/th>\nNearshore outsourcing<\/th>\nOffshore outsourcing<\/th>\n<\/tr>\n<\/thead>\n
You outsource to a state-side company, perhaps one located on the opposite coast from your HQ but stay within the country and its legal arena. No language barrier, familiar time zone differences, and generally the same mentality. However, there are significant development costs that are comparable to what you\u2019d be spending if hiring engineers on your payroll.<\/td>\nNearshore software development companies achieve a balance between onshore and offshore development teams by providing a healthy mix of expandability, affordability, and the geographic proximity that many companies place very high on their development partner checklist.<\/td>\nYour software is developed by a remote engineering team, which allows you to further save on development costs and, potentially, leverage a wide selection of competent engineers. Some communication challenges are to be expected, but they can usually be solved by establishing a strict routine of daily sync-up meetings.<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n

 <\/p>\n

This hybrid approach can leverage several offshore partners at once or combine them with nearshore ones to avoid vendor lock-in or distribute work according to company specialization or project priorities.<\/p>\n

\n\n\n
Multi-shore Outsourcing<\/th>\n<\/tr>\n<\/thead>\n<\/table><\/div>\n
\n

As you can see, choosing the right way to outsource your project is not easy, as multiple important factors come into play simultaneously. With that in mind, nearshore development teams do sound like a balanced option, so let\u2019s take a closer look at how the process works.<\/p>\n

How nearshore software development works<\/h2>\n

Nearshore is a relative term, so the location of nearshore outsourcing providers is defined by where the client is. For example, Australian companies are more open to outsourcing to the Philippines, Vietnam, or other countries in South-East Asia.<\/p>\n

In order to optimize software development costs, European businesses typically work with nearshore outsourcing companies based in Central and Eastern Europe.<\/p>\n

In the case of the United States and Canada, nearshore destinations in Latin America are the most obvious choices thanks to the ease of travel, matching or only slightly different time zones, as well as typically high \u2014 and steadily elevating \u2014 English language proficiency.<\/p>\n

Thanks to the geographic proximity of Latin America to the U.S., outsourcing software development or other IT functions to this region can be done more efficiently, with frequent mutual meetings and onsite sessions being a lot more budget-friendly and technically viable.<\/p>\n

Speaking about the process, establishing a successful collaboration with a nearshore provider typically involves several key stages, each of which is critical to the team’s success. They include:<\/p>\n