Digital Transformation Can Get A Jump-Start From The Nearshore Route
Digital transformation is happening at the speed of light today. From machine learning solutions to cloud migration or IoT projects, companies are leveraging digital technologies to change the way they work in countless ways, but it’s no easy task.
While specific initiatives are underway, core business must continue to move along. For this reason, many companies turn to outsourced software service providers to gain the hard-to-find skill sets, resources and people to help them with their initiatives quickly and more cost-effectively.
While outsourcing to far-off countries, often called offshoring, was the route de rigueur for the past few decades, the complexity of today’s software-driven digital transformation projects is forcing many companies to look closer to home for digital transformation partners. Offshorers may continue to meet a need for other services, but when it comes to these software-driven projects, the proximity of nearshorers — service providers in your country or region — is a key consideration for the following reasons:
• Innovation requires collaboration. There is no doubt that technology is becoming more complex and must solve very specific business challenges. In-person collaboration between software professionals and line-of-business managers can help to make sure that solutions are designed to meet real-world business problems by combining software expertise with business acumen. Design thinking that translates into solutions that understand the challenges, as well as the needs of the people who will be using them, requires collaboration.
• Strict data privacy rules. The growth of data-driven businesses. and the ability to collect data on virtually anyone, has resulted in stricter data privacy regulations everywhere, and the U.S. is no exception. For example, the U.S. telecommunications industry has rules governing the ability to share data overseas, and that includes sending data to software development providers. Since most of the AI applications that are created today require tons of training data, it can be a major problem when you can’t easily send the data to the provider.
• The convenience of similarity. Developing software and fitting it into business-transforming solutions is tough enough, but when you’re dealing with different countries, currencies, languages and cultures, it can create an added burden.
• AI is hard work. Machine learning, chatbots and other smart apps are complex and need the expertise of data scientists and software development experts who understand the latest technologies. Given the talent shortage, this type of expertise can be tough to build in-house, and nearshore firms can provide not only the AI expertise, but also the common language and cultural similarities that can make sure AI solutions are trained on datasets that address language, industry and regional requirements.
• Software expertise can be tough to find. Business Facilities Magazine noted that the United States “has seen tech jobs increase by about 200,000 each year since 2010” and that the outlook for tech employment is expected to continue growing. Yet even without a talent shortage, many companies don’t find it cost-effective to hire internal data scientists to constantly maintain and grow AI solutions. Both of these factors are creating new demand for nearshore providers close to world-class universities and with the skill set and understanding of local business needs.
Pandemic sheds light on other offshore challenges.
A Wall Street Journal article (paywall) recently reported that “as much as 90% of the 4.1 million workers in the Indian IT and business-processing industry are working at home,” yet as the article explains, the infrastructure for such remote working conditions is not in place. In many cases, programmers are working at home in crowded spaces with a lack of home offices, laptops or internet.
While the whole world is experiencing a change in how we work and live because of COVID-19, nearshoring firms in the U.S. or close to it typically have more of the IT resources and infrastructure in place to support remote working when it comes to software development.
What else should you look for in a nearshorer?
When you are selecting a nearshore provider, prices are a key consideration. Opting for the cheapest providers can be risky, especially when it comes to your major digital transformation projects. Yet going with the premium-priced providers on the U.S. mainland can be cost-prohibitive and make digital transformation an unreachable goal. Here in Puerto Rico, costs can be cheaper than many mainland states with matching expertise and quality, yet they can be pricier than offshore firms.
You also should ask about the degrees, certifications and credentials of each person who will be on your team. Seek customer references and inquire about the firm’s standard operating procedures (SOPs). It’s also important that your provider understands your specific line of business and its unique challenges and opportunities.
Digital transformation will only increase as the global crisis fully exposes the critical role technology can play in remote working, treating patients from afar, keeping people safe and keeping businesses productive. The nearshore model can help ensure you have a long-term partner with the infrastructure, resources and expertise to help you achieve digital transformation and conquer whatever comes next.
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