Puerto Rico is becoming the onshore destination of choice for software engineering

Amidst diverse options for outsourcing software engineering projects, many U.S. companies are finding best options are closer to home

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Did you know that Puerto Rico is a U.S. territory? Surprisingly, in a recent poll, fewer than half of Americans knew that Puerto Rico is part of the U.S.

So as part of the U.S., service providers in Puerto Rico are technically onshorers, companies that provide outsourced services in their own country (although the term nearshore is becoming a universally-accepted term for outsourcing services closer to home).

Semantics aside, Puerto Rico is fast becoming the onshore provider of choice for software development services because it’s able to provide the same benefits (and more) that its U.S. counterparts offer, with many of the perks of offshoring.

While I’ve covered this topic in an infographic and several blog posts, something we recently read from leading outsource advisory service, Accelerance, confirms our belief that Puerto Rico provides many benefits to companies seeking software development services.

Technology acumen

The U.S. is easily one of the top technology innovation centers in the world. Our software developers are among the most highly skilled, with access to the top universities anywhere. And since today’s technology requires top-notch technology expertise, any outsourced project requires software developers with the skills needed to address today’s most complex technology challenges.

Easier collaboration

As anyone in software development knows -- especially when dealing with today’s complex technologies and devops environments -- collaboration is key to an effective outsourcing partnership. Both parties must communicate regularly about every detail regarding the software project and must be specific, concise and realistic about what they need and expect from each other. Things like weekly conference calls, daily phone calls and emails and immediate alerts when problems arise help ensure that everyone is on the same page and avoids surprises or miscommunication.

This is more easily accomplished when time zones, language barriers and cultural differences are more closely in sync. Many offshore locations are not always able to provide 24x7 support and regulations about lengths of worker shifts make it often impossible to meet urgent deadlines or promptly resolve issues.

Lower development costs

In general, with any kind of outsourcing, you’ll save costs by eliminating the employee overhead that comes with employee benefits, taxes, training and retention. According to Accelerance, outsourcing saves $350,000 for 10 offshore or nearshore developers working full-time over six months versus employing those same developers in-house. Offshore and nearshore programmers offer access to highly qualified software development teams for a fraction of what you’d pay for hiring, developing and retaining an in-house team.

Yet all outsourcing costs are not equal. While offshoring is clearly the most economical route, it’s not all about price. Issues with many offshore locations are narrowing the cost margins and companies need to consider:

  • Rising costs as offshore locations become more commoditized and begin to raise their low rates for software development and service provider services
  • The shortage of skilled software engineers as those most highly skilled take more lucrative positions with product companies
  • The proximity, cultural differences that make collaboration and communication challenging
  • The regulatory differences and work-shift culture that make 24/7 support impossible

There are clear cost benefits to outsourcing in any shape or form, yet as the industry becomes more sophisticated and segmented, companies are realizing there are many options to not only save costs, but form true partnerships that spark innovation, competitive differentiation and business growth. Puerto Rico is fast becoming the destination of choice for those partnerships because it brings the best of both worlds -- offshore price advantages with in-house innovation.

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