Growth of Information Technology (IT) sector during the last decade has pushed many companies to find new ways of operating. The growth trend of IT will keep touching new highs as it is predicted to see a major growth globally. Researches at IDC have predicted that the global IT industry will reach $5 trillion in 2019. With the boom of information technology and software development, the needs of field experts are endless. There is a huge shortage of IT experts & software developers globally, especially in Europe. Countries like Germany, Switzerland and Austria are facing a large gap of Software developers. In this article, we will discuss how nearshoring can help your company fill the labour gap in your IT organization and optimize the costs of your overall project development. But firstly, a brief for each form of outsourcing:
What is Offshoring?
Offshoring is a specific form of outsourcing. It is the practice of contracting a crucial business process to another company which can be located in another country (geographically far), or in another continent. The most popular locations for Offshoring are India and China. The main promise of Offshoring is cost optimization. The labour cost in third world countries is lower which also affects the overall quality. Even though as a concept, offshoring is great, cultural differences, language barriers, and lack of meetings are just some of the challenges that organizations face when they Offshore. In the other hand, Nearshoring, which is another specific form of outsourcing, is getting more buzz since it eliminates almost most of the issues of offshoring.
What is Nearshoring?
Nearshoring is the practice of delegating your development processes to another company which is in a country that is closer geographically to a company’s headquarters. The term “closer” doesn’t necessarily express the location, it can express the close relation in culture, sharing the same time-zone, having a similar lifestyle or the flights are shorter (1-3 hours). For Europe, South-Eastern or Eastern European countries could be considered for nearshoring, while in US, nearshoring countries can be Canada, Mexico, or other Latin countries. While the cost may not be as lower as in India or China, there are some other advantages that fill that difference.
Offshoring vs Nearshoring
In the past 3 decades, offshore outsourcing became a trend for reducing development costs and filling the talent needs of European companies. Language barriers, cultural misunderstandings and customer services have tarnished the reputation of Offshoring; thus, Nearshoring has become the new Offshoring. With nearshoring, companies have achieved to solve communication issues and achieve better results by cooperating with companies which are closer geographically and closer in terms of cultures, lifestyle, communication and expertise.
What to look for in a Nearshore Software Development Partner?
Nearshoring has many advantages over traditional offshoring. It highly increases the project’s chances of succeeding, especially if you know what to look for on your software development partner. The first thing that you need to look when choosing your nearshore partner is the experience. Working with mature companies can make a difference because they already have experience and know how to handle projects like yours. You can always ask for references. Another thing that should be considered is communication. Communication is key to successful nearshoring. Proper communication with the source will make the whole process easier. The perfect solution would be if your partner would have a local agent in your country so you can meet and discuss directly without having to fly to another country. One of the most important factors that should be considered is the IP protection (Intellectual property). IP is a vital part of outsourcing because an organization’s ideas must be protected under the law if it is to develop software in another country.
Nearshoring has slowly taken the thrown from offshoring and is becoming the most popular outsourcing method. In the next few years, it is predicted that nearshoring will take a major place in most of the organizations.
If you are a company located in Switzerland or Germany and you are looking for a trusted nearshoring partner, then Vizah GmbH could be the perfect nearshoring partner.
Local Presence: Vizah has local presence in: Switzerland, Germany,
Experience:Vizah has worked with some of the largest organization in Switzerland, see the references.
Communication: Vizah Team are easily accessible, and you can communicate in German or English.
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