What to avoid when nearshoring software development ITJ

What to avoid when nearshoring software development

Nearshoring software development is a cost-effective way to manage your business. Companies all across the world have been nearshoring their IT and software jobs to other locations for years in order to be sustainable. However, businesses frequently commit a number of errors throughout this procedure, which ultimately reduces their production and has an adverse effect on their finances.

6 Things to Avoid when Nearshoring Software Development

Given the challenges of not having a software development team under one roof, this calls for a proactive approach. Check out these insightful tips on managing remote engineers to increase the effectiveness of your managerial efforts.

1. Choosing the wrong outsourcing model

What do the majority of businesses reporting subpar outcomes from their outsourcing experiences have in common? A misalignment between their company goals and the approach they chose for outsourcing software development.

There are several approaches a business can take in this matter:

Onshoring: Businesses searching for a near-perfect cultural fit with minimal language obstacles and wanting to keep their entire company inside the same regulatory framework might consider onshoring. A small skill pool and a relatively minor reduction in costs.

Offshoring: Offshoring is the practice of hiring an overseas outsourcing service provider to handle a company’s business activities. The developer rates in established outsourcing nations like China or India are difficult to match. However, they frequently come with significant time differences, cultural barriers, and travel costs.

Nearshoring: Refers to outsourcing business operations to a neighboring country. Some claim that this model offers the best of both worlds — proximity in terms of both geography and culture, as well as a wide range of highly qualified (and fairly priced) developers. This makes this approach perfect for outsourcing on both a long-term and short-term basis. Additionally, this form of software development outsourcing is ideally suited for staff augmentation and other initiatives that call for tight cooperation and open lines of communication between local and distant software development teams.

2. Choosing the Wrong Partner

It’s critical to intimately know the people involved when integrating a new team via nearshoring. Failure to do so frequently results in misunderstandings and a lack of teamwork in the future.

It’s best to check their previous work and projects, find out more about the model they apply and all the whys, investigate references or get in touch with a possible nearshore provider’s previous clientele.

You can check the company’s history to discover if they have pleased previous customers and if they have ever been sued. Long-term benefits come from thoroughly examining all nearshoring proposals before choosing one.

Prior to starting the project, be sure to spend some time getting to know your future partners. Know each person’s name, position, and duties. Before the teams begin the actual work, you can arrange a few virtual ice-breaking sessions. 

3. Lack of an Effective Communication Channel

The typical forms of contact when working with nearshored teams are virtual: emails, video conferencing, and calls. Problems arise when there is no face-to-face engagement, particularly if the communication methods used are inconsistent. In order to be effective, it is crucial to create a strong two-way communication channel.

Set up regular stand-up meetings, avoid sending too many emails, and, if necessary, have a specialized communication framework in place.

4. Ineffective Onboarding Program

Assuming your nearshoring crew can start working right away without any onboarding is one of the major blunders you might make.

This nearshoring error is a dead giveaway that your business does not view service providers as an extension of your staff. The quality of the job that is then produced may need to be compromised.

5. Failure to address knowledge gaps early

If you take the effort to identify the knowledge gaps in your internal and extended teams as soon as feasible, you will benefit most from nearshoring. Then, provide them the opportunity to share information, technological solutions, tools, and resources while also learning from one another. Additionally, setting up training sessions for your larger team or asking your nearshore provider to do so is a fantastic idea.

6. Not aiming for long-term cooperation

Your nearshoring workforce will become more familiar with your product, business, and team culture the longer you work with them. Since they are a priceless resource, you should take full advantage of their knowledge and perhaps even go above and beyond the initial, short-term project parameters. For instance, you could want to think about enlisting the assistance of your extended developers to teach and onboard young engineers or to generate new ideas and creative solutions.

Always take into consideration these tips when nearshoring software development as they constitute the base of a long-term actionable success. Only if you nearshore properly will you be able to benefit from it.

Contact us to go about the current project requirements for your business.

About ITJ

ITJ is devoted to serving fast-growing and high-value market sectors, particularly the Internet of Medical Things (IoMT), working with innovative medical device companies looking to improve people’s lives. With a unique BOT (build, operate, and transfer) model that sources only the best digital talent available, ITJ enables companies in the US to create technology centers of excellence in Mexico. For more information, visit www.itj.com.

nearshoring, nearshore, benefits of it nearshoring ITJ

Benefits of IT Nearshoring for US Companies

A well-planned and expertly carried out IT nearshore assists in advancing your US-based company’s operations. The effectiveness and flexibility of a BOT approach are unmatched, allowing you to save expenses, make better use of your resources, access a bigger talent pool, and shorten your time to market.

IT Nearshoring for US Companies

Which nearshoring location is the best fit for you? That depends on the particular requirements of your company. When searching for nearshoring companies, you should first think about:

  • The degree of expertise needed for your project
  • How closely do you require collaboration between your internal team and distant team
  • Whether you believe that having direct, immediate contact between the two teams is necessary
  • How strictly do you wish to control your additional developers
  • The financial savings you’re aiming for

You should choose nearshore development if your distant teams must collaborate closely and communicate openly with your internal personnel. Tight cooperation and almost instantaneous communication are possible by the close proximity and little time difference. For US companies, this entails expanding into countries like Mexico and Brazil.

5 Advantages for Nearshoring to Mexico

  1. You are the one in control

Nearshore solutions provide you with complete control over the creation of the product. In contrast to traditional outsourcing, you have full control over your remote engineers at every stage of the development process, just like you would with an in-house team.

  1. You save money and time

Many of our clients cite the fact that the BOT model providers handle a sizable portion of the administrative and organizational headache as one of the nicest aspects of extended development. That covers everything, including setting up the workspace and workstations as well as recruiting and onboarding new employees. You are able to increase and maximize the utilization of your resources as a consequence. The development process is thereby sped up, and money is saved. Furthermore, selecting a service in Latin America will be less expensive than recruiting locally and internally in the US. Finally, the best part is that, after the training and setup, nearshore companies that handle the BOT model in their practices completely transfer the teams to your company.

  1. You have access to a vast and large talent pool

Are you looking to recruit professionals with highly specialized or in-demand skills? If so, you could find the US market to be too tiny, too competitive, too expensive, or both. However, nearshoring allows you to access a genuinely global network of experts. In addition to having the necessary experience, they are significantly more affordable than regional developers.

  1. You become more adaptable and agile

The ability to swiftly scale up or down your personnel and take care of urgent demands is provided by IT nearshoring. Additionally, it guarantees that your business gains from hiring diverse experts and people with different skill sets. Being more agile can provide you with a significant competitive edge in light of Silicon Valley’s and the US IT industry’s lightning-fast pace of innovation.

  1. Time and zone proximity

The proximity of your larger development team in terms of geography and culture also makes communication more effective. Furthermore, you may schedule physical meetings and events more regularly thanks to the shorter travel distance between your headquarters and your enlarged employees. This encourages collaboration and a sincere sense of kinship with the company culture.

There are unique binational regional capabilities to expand the BioMedTech Valley Initiative in the Baja Cali megaregion. Take Tijuana and San Diego as an example; they are both just a 30-minute trip apart by car. If company A has an IT team and a center of excellence in Tijuana, they are free to travel there for a single day and see their staff without paying additional charges for hotel or transportation. For some, flying from the US to Mexico may be a big problem; however, a 30-minute drive could be a workable alternative.

Offering specialized technology solutions and IT staffing services in nearshoring from the US to Mexico is our area of expertise. If you need assistance developing the appropriate nearshoring solution for your company or assembling a bigger development or scrum team, we would be happy to help. Be sure to get in touch.

About ITJ

ITJ is devoted to serving fast-growing and high-value market sectors, particularly the Internet of Medical Things (IoMT), working with innovative medical device companies looking to improve people’s lives. With a unique BOT (build, operate, and transfer) model that sources only the best digital talent available, ITJ enables companies in the US to create technology centers of excellence in Mexico. For more information, visit www.itj.com.

Global chip shortage

What is the Global Chip Shortage?

The supply chain bottlenecks we’re experiencing worldwide start with chips, specifically, chip shortages. Only a few previous unbalanced markets can compare to the current global chip shortage. However, it is exceptional in the breadth of product groups experiencing a supply and demand mismatch. And there are no signs of the phenomena slowing down any time soon.

Chip vendors have raised prices by 5% to 15% across the board in response to supply restrictions and rising raw material shortages and expenses. Price increases for older analog and diode technologies have reached 20% to 25%. According to Jabil, these rises, like the shortages, are likely to persist beyond 2023.

Certainly, it isn’t the first time this has happened; severe chip shortages have occurred before, including in 1988 owing to excessive demand and in 2000 due to a scarcity of many Intel products. Then there was the 2011 earthquake in Japan, which produced a significant shortage of NAND memory and screens. Today, the global chip shortage is due to an increasing lack of skilled personnel, particularly highly qualified engineers needed to develop new chips and handle production challenges for ever more complicated ones. 

Many sources quoted by the WSJ said that the supply-demand disparity is widening because of the talent shortage:

“The world’s leading chipmakers are competing for personnel to staff the billion-dollar-plus facilities they are constructing worldwide to address a semiconductor shortage. […] New chip-making facilities, known as fabrication factories, need the employment of thousands of college-educated engineers. Technicians supervise and manage the production process, while researchers contribute to developing new types of chips and manufacturing methods.”

Furthermore, according to a research by Eightfold.ai, about 70,000 to 90,000 people or more would need to be hired in the United States alone by 2025 from 2020 levels to cover the most important manpower demands for predicted fab development. So, how can companies cope with this talent shortage they are facing?

One solution is nearshoring. Nearshoring is a tried-and-true method of staying competitive by recruiting talented individuals in the same time zone but living in lower-cost-of-living locales. 

Here is everything you need to know about the tech talent shortage and what you can do about it: Are you struggling to find software engineers?

ITJ supports fast-growing and high-value market areas by assembling talented teams, saving organizations valuable time and resources in recruitment, and establishing big, low-cost, high-performance software engineering centers. Get in touch with us, and we can help you solve your talent shortage obstacles.

About ITJ

ITJ is a trusted partner in building the finest software engineering teams in the Americas. For more information, visit www.itj.com.