Why Nearshoring is Replacing Outsourcing?

Your Remote Team Next Door

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Working in a modern business environment often means an ongoing search for effective and innovative strategies to enhance your company’s growth. Sometimes it is hard to make these strategies work in your home country.

This is the point when you start Googling alluring and vaguely understandable words like “outsourcing”, “offshoring” and since recently, “nearshoring”. You’re on the right track now. To make your search more consistent, it’s probably better to abandon “outsourcing” and “offshoring” investigations and concentrate all your clicks on “nearshoring”. Word on the street is that nearshoring is crushing its near to obsolete ideological predecessors and is rapidly becoming the brand new way of building a remote team.

Quick intro: The difference between outsourcing and nearshoring

A short vocabulary overview before we start. Let’s say you’re helming a rather big company. Being a progressive leader, you strive to create an outstanding website. Your first inclination is to take a header into the depths of web development agencies and hire one to cherish and pamper your site. This is outsourcing.

Eventually, intrusive thoughts about the agency’s skyrocketing fees will unavoidably bring China, the Philippines or Vietnam to mind—traditionally perceived as low cost markets. Assuming that you’ve already succumbed to the temptation (we all do when it comes to saving money), you’ve built your team overseas, congrats are in order. You’re in the offshoring business now, and this is probably when you suddenly realize: what if I don’t want to have my team somewhere so far away that a 20 hour flight or a teleportation device is the only acceptable means of reaching it?

Fortunately, there is a chance of building diligent and professional teams on your doorstep, in one of your neighboring countries, for instance. This is what we call nearshoring.

Now that you know the terms, let’s see how nearshoring can benefit your business and why is it becoming so popular. Here are 4 reasons:

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Time zones are causing unnecessary communication rifts

One thing that overshadows the craft and excellence of any overseas specialist has to be their distant location. Sound obvious? It actually is. The most prominent drawback of offshoring is dealing with different time zones. Communication problems inevitably arise when you have your team halfway around the world. Only those, who’ve been through this, know of the sore attempts to schedule a meeting when one party leisurely drinks the morning coffee whilst the other pours themselves the tenth energy drink to stay awake.

A nearshore team will certainly eliminate these inconveniences. However, it’s clear to say that it may render your remote team a little frustrated… “I know that the deadline’s overdue but it’s down to time differences” is now an excuse of the past!  Your newly founded nearshore team is under that spyglass and is a tangible, easily manageable and valuable commodity to your business.  

Outsourcing consultant, Ventoro, says that nearshoring is a perfect way to make the collaboration convenient for both sides. It can solve the problem of night shifts and ridiculously early work starts. Moreover, management will be able to organize a meet-up with the remote team more frequently.

Things are easier when you share cultural values

This may sound petty as we don’t really care about cultural differences as long as the work is done properly. And let’s get one thing straight – multi-culture rocks. But we are not talking about a Chicken Vindaloo that’s been delivered to us a bit more spicey than we can handle, or the way one greets new people, or takes off shoes indoors. We are talking about the way people do business, and without adding any positive or negative connotation, let’s agree that doing business is different depending on where in the world you are

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Distant countries may, simply due to very geographical distance, have traditions or cultural facets that aren’t in line with yours. The most confusing thing about these cultural differences is their almost extrasensory ability to pop up at the most unexpected of times. For an example, no matter where in the world you look, you will find clashing national holidays, and this is never nice – but having a nearshore team will reduce these occurrences. European cultures are veritably alike, and so you’ll share—not all of them—but many traditions, holidays and days off.

And let’s not forget about language. We have a strong belief that the closer your remote team is the less communicative problems you are likely to have (and communication is the root of most problems). Recent research by one Slovenian professor Odyssey Belchevsky claims that all (or most) European languages share the same Proto Slavic root. He even calls it the “Mother Language of Europe”. We probably wouldn’t go that far, but he gets his point across. Having a common, quite closely related root in languages may make communication just a little bit easier.

A nearshoring team can save you money—despite being close

Let’s face it, nobody is going to build a remote team, if it’s not going to save them money. Let’s not forget that there’s a possibility that talent and enthusiasm are also at stake, but cost reduction remains the main reason to build a remote team. As increasingly, the practice is showing,  neighbouring countries can offer the best correlation of cost and competence.

We certainly wouldn’t be throwing nearshoring into the bag  if we had no solid proof that it’s going to benefit your business. But what is that proof? How about this for size… Ukraine, one of the most popular nearshoring destinations in Eastern Europe, recently won the European Outsourcing Excellence Award. The jury recognized Ukraine as the best country to nearshore your business with regards to the cost vs competence ratio. Apparently, the era of nearshoring is rapidly approaching.

A marriage of quantity and quality

As the expression goes, “you pay peanuts, you’ll get monkeys”—or does it?  It’s clear that everyone would like to make their buck go that little bit further.  Who doesn’t?

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Although our bitter reality has few examples of getting both “quantity and quality” at one time, nearshoring is definitely one of them. The engineering legacy of the former Soviet Union combined with the modern  technical education sets the abilities of Eastern Europe specialists exceptionally high. Continuing with a  Ukrainian leitmotif, Datamonitor Review states that 7 of 10 leading Central and Eastern European IT companies are either located in Ukraine or have tight connections with it. The data speaks for itself. Approximately 13 000 – 14 000 IT students annually graduate from 880 Ukrainian tech universities. Together they compose a proper base to build a remote team on your doorstep.spacer_yellowNearshoring may have its challenges but on the other hand, you can’t expect that leading a remote team is going to be as straightforward as simply breathing. Political instability, legislative procedures and language flaws of your neighboring country can also overshadow your success. These should probably however never be showstopping fears—Ukraine, for an example, has a thriving and largely unaffected development sector despite regional conflicts. In summary, the advantages of nearshoring are substantial. Compared to barrier-intense offshoring and short-lasting outsourcing, nearshoring can be that golden middle road you’ve been looking for.