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Nearshoring

Thanks to IT outsourcing many businesses no longer need to hire expensive IT software development teams. It’s one of the most common services all over the world. However, the success depends on choosing the right partner and you can choose where they are located.

Nearshoring – what is it?

When a third party provides services from a geographical position relatively close to the company’s territory, it’s called nearshoring. Or, in other words, nearshoring happens when a company is outsourcing to a neighboring country.

Nearshoring gives a guarantee of clear and flexible cooperation between businesses. It also provides a lot of opportunities. Independent of location, you can work with individual tech experts or fully operational teams without hiring a whole new department.

This is the best option when there is a need to accelerate work on the project and implement new solutions. It’s a great way to speed up a market. Quite often there are also budget constraints that could be overcome by choosing nearshore outsourcing.

Nearshoring vs offshoring

Nearshoring is a concept that is similar to offshoring but with some additional advantages. Both words refer to the relocation of work to another country, but its proximity to yours is the most essential difference. Offshoring is the practice of outsourcing operations to countries with lower-cost economies. It’s the cheapest alternative, but there are many trade-offs with offshoring, such as various time zones, language barriers, cultural differences, or tax and legal issues.

You may also hear of onshoring that is inverse of offshoring; it refers to the transfer of business process within national boundaries to a lower-cost area.

Advantages of nearshoring

  • Saves costs. Nearshoring is cost-efficient. It decreases the money spent on wages while providing better solutions for projects. Often companies are located in countries with lower hourly wages and that’s one of the opportunities to save money. 
  • Better control over projects. Communication is easier, and frequent meetings (thanks to close distance) increase productivity. Also, outsourcing teams are more likely to have better infrastructure as it is their main source of work.
  • Cultural similarities. There are some differences in culture between European countries, but the definition and understanding of professionalism are in most cases the same. There won’t be many work dissimilarities.
  • Same time zone. Nearshoring is a guarantee for the same time zone and it provides stabilized workflow. Traveling when necessary to meet in person is also much simpler.

To learn more about nearshoring, see the blog posts below.