Nearshore, the original remote work experience, is an outsourcing of IT development and consulting (e.g. nearshore software development) where parties are usually in the same continent, same or near-same time zone, or similar working culture.
History of nearshoring
In the beginning of the 1980s, American companies began experimenting with offshoring their outsourcing projects in an effort to cut costs. A trend that became mainstream in the 1990s. However, several issues started erupting with the offshoring model that led companies to look into nearer destinations. The massive time zone difference, allied to political risk, unstable infrastructures and significant cultural differences carried significant hidden costs that started to worry executives.
In the beginning of the 20th century, the term was coined with the first providers appearing and capturing fleeing companies from traditional nearshore destinations in Asia. It then erupted, just like offshoring had 20 years earlier, to capture most of Latin America, Eastern and Southern Europe.
Benefits of Nearshoring
A hybrid between offshoring and traditional home-based outsourcing, nearshoring marries the advantages of the two. Whilst cost-effective solutions are still found (albeit on a lower scale), there are remarkably less political risks and working methods and culture are much more aligned. Hence, companies understand that they get a similar quality outcome than they would, had they chosen to outsource in-country.
Nearshore: the leveraging of technology to offer high-quality services
With the advent of exponential technological innovation allowing for real-time seamless communication and video calls, came the positioning of nearshoring from traditional BPO services to more high-quality, specialized services. Nowadays, companies nearshore their software development units, for example, hire infrastructure monitoring experts or setup high-level teams of Cloud architects and cloud solutions experts in order to upscale their capabilities.
Nearshore: the original remote work experience
One thing is companies using nearshore providers for turn-key projects; another is to use them for typical staff augmentation and team-building purposes. Through the latter, nearshore consultants are almost always (if they’re not at a client’s site for a meeting or a week of onboarding) in a remote work dynamic. Most times, they are fully integrated into their clients’ teams just like they were a normal employee of them, have a say in how work is set up and developed, put forward initiatives, and head their own projects. Albeit there are travels back and forth from providers and clients, there is indeed physical separation, which means that most communication is done online or over the phone, and work is developed inside collaborative systems. Hence, nearshore providers have been working remotely for the good part of the last two decades, being the pioneers in large-scale remote work.
Sure, it is not always easy or frictionless to go into collaboration with a nearshoring partner. Proper planning and a clear communication strategy are essential to build the right alignment between international teams, but the tools and technology are there to help ease into transition, to the point where the geographical distance is diluted and, in the end, imperceptible.