At the beginning of 2023, globalization continues its course despite all the events that have profoundly impacted both the economy and some technological advances that, in theory, could be available but have had to wait given the limitations arising from phenomena such as the pandemic. COVID-19 which hit most of humanity without discrimination, however, nearshore has increased its application in many countries, a practice that is becoming more and more common not only here in Spain, but in much of Europe.
Nearshore, also known as nearshoring, It is identified as a type of subcontracting or outsourcing of some of the company's services or activities to countries other than its own, which allows for reduced expenses, generally due to lower wage costs, although it can also be convenient due to higher quality raw materials, certain tax advantages or access to technical skills.
On this occasion the nearshore We will understand it from a software perspective, which is when a company subcontracts the work of software development to a country adjacent to their own. For companies in the US, nearshore outsourcing generally means sending work to software teams in Latin America or North America, but in Europe, the main destinations are Spain, Portugal, the Czech Republic, Hungary, Slovakia, Romania, and Bulgaria, since, unlike offshore, companies that choose nearshore opt for nearby countries to benefit from their geographical proximity, economic and political ties, as well as cultural and legal similarities.
The main motivations for carrying out this practice are: Reducing costs, optimizing business strategy, and accessing technology.
These are the 7 advantages of nearshore:
Nearshore shipping offers a double advantage for businesses. On the one hand, geographical proximity allows for cost savings in shipping goods, as well as avoiding the typical obstacles and customs duties incurred when trading with countries outside the European Union. It also implies reduced transport times and more efficient customer service, and the best part is that the same applies to software development.
2. Low investment:
This nearshore trend is growing rapidly and will continue to expand this year. Working in this way allows companies to hire technology experts and maintain team cohesion without requiring significant budget investments.
3. Boost growth:
Clearly, one of the main benefits will be reinvesting in other areas by outsourcing some services, which will produce scalability, increasing revenue through an internationalization strategy.
4. Attracting talent:
By not having a single headquarters or location, and instead outsourcing to different countries and territories, technology companies primarily facilitate the workflow for multiple talents, reducing the time required for integration.
5. Competitiveness:
Outsourcing certain processes creates a more flexible structure, allowing for a quicker response to market changes. This makes a company more competitive compared to those with more rigid structures.
6. Quality
By relocating directly, the work team is far away, therefore access is more limited, affecting the hierarchical structure, However, if it is done nearshore with geographical proximity, it is easier to monitor the necessary quality standards.
7. Cost savings:
According to the University of Navarra, the intention of 80 percent of companies that apply this practice is to save costs, explained by the benefit of reducing fixed costs, mainly salaries and social charges; basically, it is outsourcing that can save staff, time, resources, facilities and much more.
If you are interested in applying for nearshore services for your company or project, in The Cloud Group We are ready to assist you with our wide range of technology services, including custom software, artificial intelligence, Big Data services, and custom plugins. Feel free to contact us through our dedicated phone lines in the six countries where we have a direct presence, or call us at [phone number]. +34 910602524 in Spain.
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