Nearshoring Activity

By: Vera A. Leonik


Today the outsourcing of business processes and business collaboration of that kind have become a competitive advantage. For leveraging internal business resources enterprises of all kinds turn to collaborative arrangements with external resources which are often overseas. All of that is done for reducing costs and raising service quality. Having a present–day state of Internet service development companies can now perform business operations everywhere. So types of outsourcing are diverse and challenging at times.

Companies are driven by diverse aims for outsourcing. These are reduction of development costs, coverage of peak-loads, focus on core competence, need for special expertise, higher flexibility in case of budget adjustments, higher productivity of external partners. No doubt that certain risks and challenges in starting and conducting outsourcing projects are possible. In that cases you deal with different languages and cultures, long distances and different time zones, spending more time and effort on establishing trust and long-term relationships, overriding communication barriers and activities of that kind.

Nearshoring means a transfer of business or IT processes to companies in a nearby country, often sharing a border with your own country. In the US, for instance, nearshoring describes work sent to Canada and Mexico. It is a popular model for companies that don’t want to deal with the cultural, language or time zone differences involved in offshoring

Core Essence of Nearshoring

Nearshoring (or nearsourcing, "nearshore outsourcing") is a form of outsourcing in which an activity (e.g. business processes, software development) is replaced to locations which are, generally, cheaper and yet geographically nearer than offshore locations. As with "offshore," the term "nearshore" was originally used in the context of fishing and other ocean based activities which was later adopted by the business world.

Softtek, a Mexican company which provides nearshore outsourcing to the US and the European Union has copyrighted the term "Near Shore©." Major nearshoring destinations for US businesses are Mexico, Central America and Canada, Western Europe, Ireland, Eastern Europe. Most organizations give preferences to nearsourcing over offshore outsourcing for a variety of reasons (both internal and external), including physical and time zone proximity, cultural affinity and other ones.

Affirmative Nearshoring facts

• Shared cultural values/Similar mindset/Proximity

Sense of humor, the directness of communications have always been important cultural elements of successful interactions and a constant point of frustration when crossing cultural barriers. Being different from the start can easily create tremendous hurdles in a project. But proximity can be a potential access to the extended market. Besides a nearshoring company's staff can possess engineering and technical talent and you are much more eager to feel free talking over project pitfalls due to the similarity of school and university education in neighboring countries.

• Time Loading
By outsourcing a project to a distant country a company has to think about frequent traveling demands. Certain projects require frequent traveling from both the customer and the provider end of the venture. Effective and efficient email or over-the-phone communication is a core step to success on the way of working over an outsourcing project. So selecting a supplier in a close-by zone may improve the efficiency of day-to-day information exchange.

• Short Duration Resources

Nearshoring companies can provide short duration resources for project requirements management, project implementation and short troubleshooting. In such cases companies do not have to use expensive resources of their own country for starting and delivering a project. Usually nearsourcing organizations provide remote services and appear in a customer’s location in a short period of time. Nearshoring sourcing model serves as a good alternative to an outsourcing projects’ performance. It reduces costs and risks of working with distant foreign companies. Besides close proximity to a service provider allows companies to develop intimate working relations. Moreover being in the same time zone is a huge advantage in a software development.

• Lack of Management Complexity

The more the distance the more management complexity appears with time, resources and budget. Managing teams is a hard thing. Managing staff abroad is even harder and troublesome. Vendor relationships are not an easy thing. Lack of proximity leads to lack of direct control. Besides you will not be always sure in your financial payback. This is a commonplace in offshore outsourcing. Nearshoring as a rule provides close-coupled mill. Being close helps when working over complex projects require additional time and spent effort for more interaction of top- engineers and production workers.

Nearshoring can have its own features that are more or less appropriate for a company. But if you understand the customers demand and will be able to express personal touch of a local person whom people can trust and work with, demonstrate your proficiency and situation awareness then successful collaboration is possible. Nearshoring is a flexible, holistic and integrated approach to improving your business results. You will be able to get the best from international cooperation with partner companies during project development interaction. But other motives can also come into play.The overwhelming majority of nearshoring companies are also experts in many adjacent areas and offer variety of additional services which appear to be an affirmative bonus for both parties. With a minimum of administrative overhead, but extremely flexible regarding time, place and content they offer IT and management consulting, eLearning
and escrow services, additional establishments of business contacts. Experts in companies of that kind ensure skills and supporting services in project management and business analysis, business process optimization, quality assurance, technical documentation and software localization. If the lack of one of the stated above facts is crucial for business then appropriate assistance can be provided onboard. It can be done by a nearshoring partner. Nearshoring is a new wave of the future.


Vera Leonik , eMarketing Specialist at Qulix Systems – Custom Software Development Company, located in Minsk, Belarus, Eastern Europe. Our client-oriented approach and effective offshore software development services are the things that will help you to achieve your business goals. For more detailed information on SCM/e-marketplace, please feel free to contact us. Copyright 2007© Vera Leonik. All rights reserved.