LATAM Nearshoring: The Lies, the Highs and the Why’s







LATAM Nearshoring: The Lies, the Highs and the Why’s

Published: 2024/03/14

7 min read

Nearshoring refers to the practice of transferring part or all of a company’s processes to a nearby country. This contrasts with offshoring, in which business operations are moved to a distant country. Nearshoring aims to reduce costs while benefiting from geographical, cultural and temporal proximity.

As nearshoring becomes more and more popular, you may be wondering what makes it so convenient. Why do North American companies consider it a better option than hiring staff in-house? What makes it more advantageous than offshoring? Before investing time and resources in nearshoring, you may have some doubts and fears. Read on to get the truth behind nearshoring misconceptions, learn about some of the measurable benefits it can bring and why you should consider finding a nearshore partner to help with your software development.

Clearing up nearshore software support misconceptions

Nearshoring services will lower the quality of my product

When developing a product, you want the best possible outcome, so you may worry that letting someone outside the company handle it will risk the final quality of the product. However, you should keep in mind that nearshoring companies have highly developed staff selection programs, designed to attract the best candidates in a given market. At the same time, a nearshore partner will want to work with you as part of your team – integrating into your daily work, being present in meetings and joining in the work you have already started or are ready to start. Quality is the top priority for a nearshore team that wants to form a long-term relationship with a client.

Communication will be a problem

Language should be a factor in choosing a partner. One of the strong points of Latin American countries is their proficient levels of English. Argentina, for instance, has one of the highest English knowledge levels in the world. At Software Mind, we have switched all our internal communications to English, so that no barriers exist between clients and staff. At the same time, there is a very similar cultural background between Latin and North America, which makes it much easier to be on the same page when it comes to culture, social etiquette and working styles.

The process will increase my costs

The costs of offshoring and nearshoring are very similar, and sometimes nearshoring is even less expensive. But apart from the service itself, you should consider the aggregated costs that you would be reducing by hiring a company near your location: face-to-face meetings will require fewer travel hours, working in the same time zone will speed up any follow-up process, and the exchange rate in Latin America tends to favor US dollars.

As human beings, and even as organizations, we tend to fear the new. There are lots of questions, “what ifs” and uncertainties. As a company, we understand that. But we can assure you from our long experience in the market that nearshoring is worth trying. It can add significant value to your operations, increase the quality of software products by delivering talent into your projects and even reduce your costs in the long term.

3 reasons you should turn to nearshoring

Nearshoring is a trend that is here to stay. If you have not considered it yet, you may be wondering what it is that makes it so attractive to companies such as Google or Microsoft. Do they not have enough room to hire developers in-house? Is it a matter of cutting costs? Will quality be compromised? These are all perfectly reasonable questions, so, here are answers based on real-world experience.

Nearshoring enables clients and partners to work in the same time-zone

This may seem like a minor detail… until you have to carry out daily meetings at midnight just to match your partner’s working hours. Being in the same time zone (with maybe just one or two hours of difference at most) is a huge advantage. It avoids unnecessary delays when there are corrections or adjustments to be made. At Software Mind, we like to work inside our partners’ teams, so matching time zones enables us to take part in all team meetings and always stay up to date with the latest information.

Nearshoring means working with people who share a similar cultural background and a common language

Latin America shares many cultural similarities with North America and people are familiar with the American work style. All this can make work a lot easier and mitigate potential misunderstandings. Most Latin American countries put a strong emphasis on learning English during school and college years. As a result, most professionals, especially in the technology industry, are practically bilingual.

Nearshoring enables you to get skilled professionals when you need them

Latin America has some of the most qualified software development professionals in the world. You may not be considering moving your headquarters here, or even opening a branch, but you can profit from wide expertise and training by hiring a nearshoring company that can provide you with their best talents that fit your present needs and scale to your growth. You can enlarge your company in a fast and easy way, delegating the task of building the best team to a partner so you can focus on your core business.

Nearshoring is a solution to a need that has been growing non-stop in the IT world: a lack of qualified people to fill positions. Working with a company that shares your culture, understands your language and shares your time zone can help you enlarge your teams with highly trained professionals the moment you need them.

The economic benefits of nearshoring

As US companies tirelessly hunt for ways to be more efficient, save on costs and truly connect with their customers, they’re starting to wonder: “Why go halfway across the world when we can stay closer to home?” So, what’s this all about? Let’s dive into the economic whirlpool of nearshoring and sift through its perks and pitfalls.

  • Reduced Costs: Nearshoring can lead to significant savings. Talent costs in Latin America are lower than in the United States, but without the extreme differences that can sometimes lead to problems when offshoring projects.
  • Improved Communication: Sharing a similar time zone makes real-time communication easier – leading to faster decision-making and reduced delays. This can translate to operational efficiencies and faster time to market for products and services.
  • Cultural and Language Similarities: A closer cultural alignment can lead to better understanding and collaboration between teams. This often results in fewer misunderstandings, improved product designs and better-adapted services for the target market.
  • Boost in Regional Economies: Nearshoring can stimulate economic growth in the chosen countries by creating jobs, increasing income and fostering technological and skill-based development.

Trade Agreements: Numerous countries participate in regional trade agreements that diminish tariffs and streamline regulatory procedures, enhancing the appeal of nearshoring as a cost-saving approach. While our clients sign US contracts when partnering with us, they continue to benefit from the cost efficiency of nearshoring due to our diverse team of engineers from across LATAM.

3 questions to ask yourself when thinking about finding a nearshoring partner

Applying a new strategy can rightly cause apprehension – decisions should be made after thoughtful consideration and due diligence. Here are three strategic questions you should ask yourself before choosing to nearshore:

Am I willing to expand my business? And if so, how?

As obvious as it may seem, being clear about what you want to pursue must be the first step before starting any plan. Without clarity and determination, all your efforts will probably be in vain. Aiming high comes with attached costs, but these can be controlled without impacting your current resources. By partnering with a nearshoring company, like Software Mind, you can grow your business by working alongside a partner that is as committed as you to tackling your project in the best possible way. Nearshore support also gives you the resources you need to make up the perfect team in the blink of an eye, without losing focus on your goal.

Is my company’s identity established?

Having a true understanding of what your business stands for and a thorough analysis of your partner-to-be’s values is a must when giving nearshoring a go. You can’t underestimate the importance of teamwork, cooperation, and communication when you are creating a team, and partnering with a company that works by the same values ensures seamless onboarding and a stable, long-term partnership.

What about cultural fit?

Partnerships work better when both companies are located in nearby areas and have similar time zones, language and work culture. The reason is simple, effective communication is crucial in successful relationships. For instance, building a partnership with a staff augmentation company from Latin America is an excellent option for companies in North America.

Get trusted nearshore support from a proven partner

For businesses looking to adapt to change, overcome unexpected challenges and maximize efficiency, nearshoring is proving to be the competitive edge they need. Beyond the dollars saved, it’s about tapping into domain expertise and accessing talent on a global scale. That’s why companies across sectors turn to Software Mind, whose Latin American specialists have the knowledge, experience and culture fit that ensure fast onboarding, smooth collaboration and meaningful long-term support. To find out more about how nearshore experts can help you, fill out this form.

About the authorJavier Minsky

CEO at Software Mind LATAM

Javier, an accomplished Systems Engineer with a bachelor’s degree from Universidad Tecnológica Nacional and a master’s degree from Universidad de Belgrano, co-founded Virtualmind in 2005 and served as its visionary CEO. Under his leadership, Virtualmind, now operating as Software Mind LATAM, has grown significantly and become a leading software industry player known for cutting-edge solutions and high-quality staff augmentation services for North American companies. Javier is passionate about innovation and is committed to continuous professional development, for everyone at Software Mind LATAM.

Subscribe to our newsletter

Sign up for our newsletter

Most popular posts