Outsourcing is becoming more common and instead of questioning if you should do it, discover what type of outsourcing your company should do. Should you outsource in your own country? In your state or city? If you do it in another country, how do you decide which one to use?
If you don’t already know the differences between onshoring, offshoring, and nearshoring, check out our blog: To OffShore or Onshore? How About the Best of Both Worlds?, or our eBook for a more in-depth look: Hiring In-House vs. Outsourcing.
Here, we make a case for choosing to nearshore over both other types of outsourcing – onshoring and offshoring - from the perspective of an American company and using Colombia as our model nearshoring country:
- It is cheaper than onshoring: It is no secret that Colombian and many other non-American software development companies are less expensive than their American counterparts. While the average American software developer made $83,000 per year in 2014, Colombians are getting that same job done for under $13,000. But the truth is, you want that Regulations to keep people from being exploited are becoming more demanding in Colombia. But the good news is that you will still see a significant reduction in your costs (think ½ or more), while your Colombian employees will have their wages raised by working with an American company. The price tag is better for both parties, a win-win situation.
- No need to onboard: Onboarding is a commitment. And an expensive one. The nice thing about project-based relationships is that you can try working together, and if it doesn’t work out you go your separate ways when the project is finished. If both parties enjoy working together, they can keep working together on a per-project basis for as long as they want, without getting serious or complicated.
- The language barrier is minimized: While not as fluent in English as Indian developers, Colombians are increasingly learning the language of the north, as Americans and Europeans are starting to travel to Colombia for vacation and retirement. Furthermore, there is a significant amount of Spanish in the United States and continually increasing in many companies.
- You share time zones: If you’ve ever conducted business with an Indian developer, you understand how inconvenient a 12-hour time difference can be. Colombia overlaps with American time zones, making communication and scheduling much easier.
- In-person meetings are cheaper and easier to arrange: Sometimes situations happen, and you cannot do everything over the phone or Skype. In preparation for this possibly unforeseen event, keeping your outsourced work in the hemisphere is the right call. Unlike India and Bangladesh, you can get from the US to Colombia in as little as 3 hours, depending on where you are located.
- The legal structure and business cultures are similar: The governments of Colombia and the US have a long-standing relationship, and the Colombian government has been looking to the US in its recent years as a model for structuring itself now that it is in a good place with a rising economy. This is important, as potential legal disputes can be handled quickly and with ease in the absence of complex legal environments that don’t connect. Business culture in Colombia is similar as well, and Americans find Colombians to be friendly, responsible, and easy to work with.
- Medellin is the Silicon Valley of Latin America: It may come as a surprise to you, but Medellin, Colombia is nothing like the HBO series, or like it was in the 1990s. This metropolitan city has been dubbed the “Silicon Valley of Latin America,”  and is the only Latin American city, other than Sao Paulo, Brazil, to rank “top 25 most innovative cities in the world.”  If you visit the city, you can see why - it has state of the art public transportation systems, modern, inventive buildings, and a thriving tech culture. Nourished by the Colombian government and its many public-private joint initiatives, the citizens of Medellin look forward to living up to its name.
If you are thinking of outsourcing a software development project, consider looking nearshore to Colombia. While it has yet to hit the radar of many, those who are in on the secret are getting a head start, sweeping up qualified and talented developers before the masses move in.