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Nearshore Outsourcing: A Better Option for IT Services and Software Development?
The key to cost savings and better results with your company’s IT services and software development is closer to home than you may think.
As the global demand for software development and virtual services continues to rise, many businesses find it challenging to get the labor they need. One project may require hundreds of programmers while another can make do with the in-house team. And with so many skillsets that all need coordination, IT and programming costs can quickly skyrocket.
If you’re facing these challenges, you may be considering outsourcing your IT needs. But, consider this: traditional outsourcing may add as many hurdles as it removes. Here’s why you should consider nearshore IT outsourcing to augment your staff.
“Outsourcing” typically means hiring an overseas team for work that your in-house team can’t manage, whether due to lack of time or expertise. Staff augmentation is similar but more geared toward expanding your team with specialists (hence the name). This spares you the cost of hiring in-house experts.
Staff augmentation is essentially a more reliable way to delegate tasks. The workers have a more in-depth understanding of your business and how you operate — as compared to an outsourced agency that may handle hundreds of other businesses’ tasks. This deeper focus makes staff augmentation ideal for highly technical needs, such as tech support, software management, and other IT roles.
The Cost of IT Services
Whether you’re hiring a repair tech, network administrator, or programmer, you’re in for an expense. Network administrators earn anywhere from $75k to $150k annually. IT consultants or managers can easily fetch six figures. Plus, you have to purchase all their equipment, pay benefits, and potentially rehire if they leave their position.
Contracting out your IT needs isn’t necessarily cheaper, though. Booking a local managed IT firm or private developer can cost you up to $225 per hour.
And of course, not all tech-oriented roles are the same. There are massive skill gaps among the most common types of IT specialists, including:
- Consultants and analysts
- Systems engineers
- Network administration
- Tech support
- Quality control
- Software development
- Software testing
- UX design and optimization
- Process/workflow development
- Staff management
- Project management
Even a robust in-house team can barely cover all these responsibilities, which is why most businesses find themselves seeking outside help, especially for big projects.
Tech enterprises often use virtual teams that include a mix of in-house and outsourced employees and contractors. Non-tech businesses tend to outsource most of their IT tasks. In both cases, remote teams offer diversity and agility that 100% in-house teams rarely can.
Remote Work Provides a Source of Agility
Even before the pandemic, remote teams were becoming the norm. Especially in a high-turnover industry such as IT, it’s crucial to hire qualified candidates quickly. Remote work allowed companies to leverage global talent. On-demand contractors and cross-functional teams helped make tech projects more agile — able to be easily adapted to shifting priorities and deadlines.
A remote IT team may include regular employees or contractors, either of whom may work remotely part- or full-time. While that flexibility helps attract top candidates and lower overhead costs, it also has drawbacks: Contractors cost much more per hour and are not part of the core team. Also, projects tend to take longer when team members are spread across different time zones.
Businesses that outsource IT and software roles overseas face even more challenges. The agility of remote teams is counteracted by language or cultural barriers. And with such large differences in time zones, it’s virtually impossible to host full team meetings or get issues resolved quickly — ostensibly two of the key benefits of virtual teams.
That’s why nearshore staff augmentation is emerging as a better solution for IT or programming needs. Businesses can still benefit from agility (and cost savings) but can expand their team with workers who speak their language, literally and figuratively.
Why Nearshore Staff Augmentation Beats Offshore Outsourcing for Software Development
If you need to hire extra workers for a big project — say, a new app — it’s tempting to book the cheapest labor. But that’s rarely a good idea. Take this example from one USA-based startup as an example.
They wanted to create a custom web-based platform for project management. To save on costs, they outsourced the app development overseas. However, they quickly faced issues: the developers all had different workflows, and there was no one to efficiently manage their tasks. The language and cultural barriers led to prototypes with bad grammar and navigation elements that made little sense to American users. And, without a network administrator or cybersecurity expert on board, these trade secrets were being exchanged on channels where competitors could easily gain access.
The platform launched, but the performance issues created a huge backlog of bugs and copy errors. Those outsourced developers washed their hands of the project. Now, the startup had to hire new techs to maintain a platform they knew little about.
As they started to grow, they realized they needed an IT business analyst to help them plan new features for the platform. An influx of new users put a lot of pressure on their servers, causing downtime that cost them money…and plenty of frustration.
By managing this project with a full development team from Day 1, the startup could have avoided a lot of headaches and extra expenses.
Nearshore software development would have provided the people and processes they needed to set up their platform for success.
The Benefits of Nearshore Outsourcing for IT Services and Software Development
In nearshore outsourcing, a company hires a company that provides workers in countries that are geographically (and often, culturally) close to their own. This solves the time-zone differences and language barriers. In particular, nearshore staff augmentation does just what it says: it expands your team.
Rather than delegating tasks to a disinterested overseas contractor, your managers and team get to work more closely with a dedicated workforce. Often, the augmented team includes various roles with consistent oversight and attendance at team meetings.
This is a far cry from hiring random developers or techs around the world who don’t talk to each other — or even speak your language well. Coordinating all those overseas workers and overcoming communication gaps can easily add months to a project.
And that’s another thing: if you need continual support, as many software projects or businesses do, staff augmentation offers a helpful relationship with a technical team. Rather than “one and done” contracts, you benefit from a sustained workforce. Plus, it’s easier to implement fixes, new features, or quality control when your team is nearshore.
Nearshore IT solves many of the problems of traditional overseas outsourcing, and it also unlocks new potential for businesses. Whether you need short-term expertise for a major project or an affordable, sustainable solution for IT management, nearshore staff augmentation enhances your in-house team.