successful nearshoring strategy
Software Development

7 tips for a successful nearshoring strategy

date: 14 November 2017
reading time: 6 min

Originally published in November 2017, last updated in April 2020.

Offshoring used to be a popular outsourcing strategy for many successful companies as did onshoring but offshoring isn’t without its problems, including customs hassles, cultural differences and issues with time zones. However, benefits such as ease of doing business, geographical proximity, quality of service delivery, lower risk and cost savings have made nearshoring a hot trend.

A simple nearshoring definition would be the act of outsourcing business to a country close to yours. This helps the process run smoothly by eradicating language, time-zone and cultural differences. Nearshoring is incredibly popular in 2020 for many reasons and its benefits are plentiful. Undeniably, entrusting some of your key business tasks to nearshore locations has many benefits. Bearing this in mind, IT nearshoring is surely a great idea to grow your business – but you have to do it right! There are myriad of details to take into consideration when working with your outsourcing business partner but the milestones of successful nearshoring cooperation come down to these 7 key factors that you can’t afford to forget about.

1. Communication

It is a no-brainer that effective communication is crucial for running a successful nearshoring project. Nothing valuable ever comes from hiding problems and a good communication strategy can remedy that. Unlike onshoring, the quality of the outcome of nearshoring depends mostly on fluent and clear links between the customer and the vendor, so do write and speak regularly with your remote team! When working with people from another country, it is a good idea to assess any possible differences in communication at the very beginning of your cooperation and then simply maintain high standards. Use video conferences rather than voice calls and ensure regular meetings with a clear agenda.

You’re unlikely to have too many cultural differences with nearshoring and whereas undisturbed and clear communication is essential this is only a step one of the process. With offshoring you have to deal with different time zones, nearshoring means that your time zone and that of your supplier should be within an hour or two of one another, leading to easy communication between your companies. In such a situation, you can always flex your working hours to accommodate any time zone discrepancies.

2. Defining clear scope and an action plan

Scope determination is the Achilles heel to outsourcing IT project management, so make sure you communicate your needs clearly to the software development company. Take time to explain exactly what outcome is desired and double-check with your partner that you are on the same page. Many companies make the mistake of not setting this out from day one when putting together their nearshore outsourcing plan. Make sure your partner knows what the deadlines and goals are throughout the development process. Defining clearly the scope of action and following a rigorous plan allows smart distribution of work and ensures your satisfaction at the end of the day.

3. Understanding each other

As you are cooperating to develop your business, it is crucial to understand each other. Help your remote software development team to understand the product, the goal of the project and the end result desired by your customers. Make sure to clearly articulate your expectations and project management strategy.

Sharing your company’s values, your corporate action plan and your goals will result in building a mutual understanding and empathy. Do not omit a proper explanation of your business decisions, let the team get the sense and the rules of your game. This investment pays off quickly!

4. Establishing a relationship of trust

All relationships that people build should be based on trust in the other person’s true intentions whether you’re offshoring, onshoring or nearshoring. Without trust it is difficult – if not impossible – to cooperate towards a common business goal. If you are worried about sharing confidential information with the vendor, do not hesitate to introduce a proper NDA between the two companies.

With nearshoring, it is crucial to get to know the team and visit each other when possible. Meetings or social events build relationships and trust. This will also help you to give a face to a name and create bonds with the vendor. Not to mention an added ease of checking progress status and correcting a course of the project if needed. And since nearshoring means proximity, you can benefit from easier and cheaper travel, lack of visa requirements for the EU and similar (or even the same) time zone.

5. Developing a winning team

The benefits of cultural proximity and an established relationship of trust can all be lost without the winning team attitude. Don’t forget to prioritise people over processes and technology. At the end of the day, it all comes down to the human to human communication. Building an engaging environment is an important success factor. It will help you coordinate efforts towards a shared goal and arouse a feeling of being in this together, wanting to do well or to be the best.

6. Focusing on leadership and management

The success of your nearshoring project often depends on the management factor. Responsible and reliable project management equals effective decision making, better problem resolution, controlling the scope of the project and delivering successful products on time. This results in increased control and decreased risk factors. It also means a happy team that is not struggling to reinvent the wheel. Good roadmap supervision demonstrates time and cost-savings, leaving freedom and support, going hand-in-hand with enhanced overall effectiveness.

7. Being agile

There are many challenges to consider when nearshoring your IT project. Maintaining organisational agility surely helps to master change, tackling problems and managing risk. It allows you to benefit from the swiftness in iterating software and from increased productivity, making your human resources available when and where you need them. An expert outsourced IT team will not blindly say yes to everything you request, but will rather propose alternative solutions with the best interest of your project in mind such as advising them to use cookies. Remember – the more questions, the better. However, don’t forget to make sure they are willing to adapt. The right mix of competence and experience with energy and flexibility is what you’re looking for.

Every major business change implies new challenges and nearshoring is not an exception. Yet, it is a valid and less expensive alternative to offshoring further afield in the long run. Many companies have a bad experience with offshore contact centres due to cultural and language issues, so take advantage of cooperating with people in your close cultural proximity through nearshoring.

Apply the strategy of small steps and, if necessary, start with a pilot program. This will give you a viewpoint on your future cooperation and help build trust that your team is hard at work. Focusing on the areas discussed above will ensure successful implementation of your nearshore strategy and bring new quality to what you do.

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