Why offshoring is moving closer to home?

The offshoring business is booming. Whereas a few years ago, only a few U.S. companies were setting up shared-service centres and adopting outsourcing, nowadays nearshoring has become a popular strategy in the development community. It’s true that cost pressures are encouraging companies to gain the benefits of pooling services and locating them where skilled labour is cheap, but the approach provides a wide range of advantages including the ability to cost-effectively outsource parts of the project to a skilled team. This enables the internal developers to focus on other mission-critical aspects that might be more in-line with their particular areas of expertise.

At the beginning, India was the biggest beneficiary. It has the advantage of a massive supply of ultra-low-cost graduates and a good decade of experience. But while India will continue to enjoy strong growth, the future of offshoring will not be a race to get lower costs. In fact, locations closer to home—nearshoring operations in Mexico and South America— are being a key focus of expansion for companies based in USA. That should not surprise us, basically because the new offshoring functions require more interaction. As offshoring becomes mainstream, companies are pushing beyond the standard offshoring activities, like finance and IT support, to more complex and customer-facing operations.

So, we can start to answer the question: why offshoring is moving closer to home?

The current burgeoning of “nearshoring” locations (like Mexico -in North America-, Costa Rica -in Central America-, Argentina -in South America- or other South American countries with very different competitive advantages and disadvantages), closer to home than India but not as cheap is due to many reasons. In short, most american companies feel more comfortable with the cultural and geographical proximity of nearshore locations and most are willing to pay the small premium needed to get a service centre that addresses business needs.

When it comes to nearshoring in the U.S., many development firms opt for developers in Argentina. The South American nation offers a number of perks for nearshore projects, including: globally recognized as a great outsourcing location, skilled workforce, geographic location (with similar time zones), and a perfect cost/quality balance.

Global recognition

According to international outsourcing and nearshore / offshore experts, Argentina is at the top of the list for any foreign company looking for software providers and software related services.

Skilled workforce

Argentina is particularly attractive for those who wish to outsource custom software development mainly due to its offer of highly skilled programmers known for being creative and dedicated, and also for providing great expertise in technology platforms. In fact, Argentina is a real pool of very innovative and talented people in different areas.

Geographic location

One of the reasons why Argentina has earned the reputation of a major IT hub is its multilingual workforce. Argentinian professionals are known for their excellent linguistic skills. Most Argentinian IT specialists speak english very well.

Multilingual skills

Nearshore outsourcing to Argentina helps eliminate communications obstacles due to different time zones. US and Argentina time zones are similar, making it easier when it comes to collaboration.

A perfect cost/quality balance

Cost is a main concern for any project, including outsourced software development. While there are other countries that can offer lower costs, projects outsourced to Argentina are not expensive considering the quality level.

TISA Software offers nearshoring services in Argentina, combined with Houston based location. To learn more about the benefits of working with TISA, contact us.

Ariel Sztern

About Ariel Sztern

Ariel is a Software Engineer with more than 20 years of experience in Software Development with experience in managing projects in more than 16 countries

Nowadays Ariel is responsible for managing the operation in USA as President of TISA Software LLC.

Beyond his technical knowledge and passion for the technology Ariel enjoys watching the NBA and playing Ping-Pong, he also likes sci-fi movies and was recognized as one of the 40 under 40 by the Houston Business Journal in 2014.

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