Nearshore Outsourcing: Understanding How It Works

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Nearshore is a business strategy that involves outsourcing certain tasks or processes to a company located in a nearby country, rather than a far-off location. You can also hire talent from nearshore companies and add to your team temporarily, saving time and hiring costs.

The idea behind nearshoring is to take advantage of another country’s cost savings and talent pool while minimizing the cultural, language, and time differences that can arise with offshore outsourcing.

Picture this example, which is more common every day:

A US agency that wants to reduce costs, chooses to partner with an outsourcing company from Latin America rather than partner with one in India. Why is this?

  • In Latin America, there are matching time zones with the US, which means that the US agency team can work at the same time that the team of the outsourcing company, resulting in a way more fluid communication.

And then, the same benefits from offshoring are applicable to nearshoring:

  • Life cost is lower in Latin American countries. This means that partnering with a Latin American outsourcing company can help agencies reduce costs, while they still can work with an incredibly talented pool. Is a win-win for both parties!
  • Language is not a barrier because nearshore outsourcing companies have a prepared team with English proficiency.

How does nearshore outsourcing work?

Working with a nearshore outsourcing company is just as easy as working with any other outsourcing company.

  1. Identifying the need: The client identifies a need for a specific service or project and determines that outsourcing is the best solution.
  2. Selecting a provider: The client evaluates several nearshore outsourcing companies and selects one that meets their requirements. This blog post can help you with that.
  3. Contract negotiation: The client and the outsourcing company negotiate the terms of the contract, including the scope of the project, the timeline, the budget, and the responsibilities of each party.
  4. Project initiation: The outsourcing company assigns a team of specialists to the project and begins work on the client’s behalf.
  5. Communication and collaboration: Regular communication and collaboration between the client and the outsourcing company are essential to ensure that the project is moving in the right direction and that any issues are addressed promptly.
  6. Project completion: The project is completed according to the agreed-upon timeline and budget. The client reviews the work and provides feedback to the outsourcing company.
  7. Ongoing support: The outsourcing company may provide ongoing support and maintenance to the client, as required.

Keep in count that this process may vary depending on the company.

How is Offshoring different from Nearshoring?

Offshoring is the practice of outsourcing work to a company located in a far-off location, typically on a different continent.

Unlike nearshoring, offshoring can result in cultural, language, and time differences that can make collaboration and communication more challenging.

In summary, if you are looking for reliable talent to add to your team temporarily, and you want to avoid communication or cultural issues without sacrificing your budget with in-house talent, the best option is to nearshore.

We have experienced IT talent available to add and adapt to your project in a flexible way, no matter what stage the project is at. Contact us if you want to learn more about the benefits of nearshoring and how we can help.