Nearshore Software Development Trends for 2020
Posted on November 18, 2019
Out of a need for quick expansion or better access to talent, companies have shifted from a local to a global mindset in order to reach top talent. The way we develop software around the world has completely changed in just a few short years.
Offshoring by no means is a new practice, it has been around basically since the internet started. What has been escalating recently is a shift from offshoring to nearshoring.
Both terms refer to the practice of outsourcing your team somewhere else, for many different reasons:
- Lack of local talent
- Access to specialized talent
- The need to augment fast
- Location & infrastructure needs
- and many more…
The main difference is time zone and culture. When you offshore, you hire a team anywhere in the world in any time zone. By nearshoring however, you hire as close as possible and in your time zone.
For us, the biggest pain points we help our customers with are: Quality, same time zone, similar culture and geographical location (being a few hours away by plane).
I believe this is why nearshoring will overtake offshoring.
For the past 4 years (since we transitioned from agency to nearshore team model) I’ve seen many trends come and go, but some are here to stay:
High demand and limited talent pools are driving companies to find nearshore teams
Local talent pools are usually overshadowed by rising demand. This means companies are finding it hard to source local talent to meet their needs. This is currently driving companies to evaluate other options like offshoring & nearshoring their teams.
Companies will transition to consider their nearshore teams as their own
One of the biggest concerns we see our clients have when working with a dev shop or agency is that they have to adopt another’s processes to produce THEIR results. This just introduces more friction all around.
Our nearshore teams on the other hand are no longer “developers-for-rent” by the hour. They are full time-dedicated individuals that you can consider as part of your own team.
These teams share the vision, take in the culture and adopt prosses to deliver results.
The shift from offshoring to nearshoring will continue
Same time zone? Check. Similar culture? Check. Easy travel? Check. Quality? Check.
It’s definitely a no-brainer for many companies and startups to shift to a location easier to work with and access. I’ve been seeing this trend over the last few years and I strongly believe many more US-based companies will shift to nearshoring in 2020.
A more specialized nearshore provider market
Nearshore team providers will keep specializing in 2020. You will be able to find providers that specialize in specific frameworks, technologies, blockchain or AI.
There are two reasons for this specialization: first, the more talent you have specialized in a specific field, the easier it is to attract, train and retain said talent. Second, it is good business to establish yourself as an expert in a field (by acquiring the experience) and then offer services to your target market.
Jack-off-all-trades service companies and agencies are (still) on decline.
Hands-off team management
Providers (like us) are taking the nearshore model a step forward by providing 100% hands off team management. This means you don’t need to worry about HR, office, management, retention, etc.
Focus on your product while everything else is taking care of.
High quality over cost
Most of the time, the cost benefit of hiring an offshore team had a big drawback: quality. Your team might be cheaper than hiring in-house, at the cost that you don’t get the best talent.
Some offshore/nearshore companies are able to provide a cost benefit by offering Junior level candidates that are then sold to you as more experienced developers. These types of teams lack the expertise to produce a high quality product released on time.
At Ideaware, we are very transparent about the individual team members we are bringing to the table, and in case we are hiring for a team, we involve our customers as part of the process. We’ve seen other companies in Colombia doing the same.
This transparent process ensues you get the experienced talent you need to execute your vision.
As the globalization trend continues, the easier it will become to work with nearshore teams. Improved communications, tools and processes keep making remote work better.
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