Reasons to Resort to Nearshore Software Development

During the last decade, life’s tempo grew at least two or even three times. That did not only influence our daily lives but the business world as well. Now company owners have to adjust to the harsh reality where there no longer is a place for procrastination as every second there will be someone breathing down your neck. It is only obvious that businesspeople are now trying to find solutions for their businesses that would allow them to stay competitive on the market scene and at the same time would not require a significant financial investment. One of those solutions became nearshore outsourcing. Or, if to be more specific, nearshore software development outsourcing.

Nearshore Software Development: What Is It?

Software development is a rapidly growing field these days. It is only natural that it became one of the biggest branches of outsourcing in general.

What is outsourcing, after all, you might ask? Basically, outsourcing tasks means delegating them to another, outer contractor, therefore leaving your company’s employees more time to concentrate on more urgent tasks. Outsourcing has lots of benefits like cost reduction, attracting new talents, expanding your business to new markets and many more. There are a few types of outsourcing today; however, the one that seems to be the most popular is nearshoring.

In case of nearshore software outsourcing, you hire a contractor who is located somewhere nearby, in most cases within your geographical region. Why is it so popular though? First of all, in case of hiring nearshore software programmer, you significantly reduce your expenses. Nearshoring allows you to broaden your ‘search party’ for new employees to the nearest countries. However, chances are high that these countries’ economy state is worse; therefore, software engineers’ rates will be lower. Another thing that nearshoring software development might get you is the possibility to find a more skilled contractor than you would be able to in your own country. Now you do not have limits in the form of your country’s borders, you can start looking further and find someone truly exceptional. For example, if your project involves processing and understanding data in Korean, having team members with Korean text annotation skills not only ensures accurate and culturally sensitive data analysis, but also improves communication if your business is expanding into the Korean market.

Finally, the greatest thing about nearshore software engineering services is that your contractor company will be located in the nearest time zone, so communicating with your team o even traveling to their office will not be a problem anymore.

As you see, by choosing nearshore software development services, you are giving your business a huge boost.

Nearshore Software Outsourcing: Types of Projects It Suits the Best

Every company owner, before implementing software nearshoring strategy into his business, wants to know, what type of projects it is suitable for. Well, speaking of software development, it could be said, that this particular field is absolutely perfect for nearshore software development as it is mostly technical and does not require your direct presence.

For example, we could be talking about such projects as BizzTalk, SQL Server or Salesforce implementation services. As you see, these projects do not require direct communication. It can all be done through video chat if the need occurs. Another example: when a certain company wants to build a core product for their needs. No matter how experienced their programmers are, it is always a good idea to have outer expertise in such things. This is when software development outsourcing nearshore comes in handy.

Finally, you can turn to software nearshoring services even when you or your team need a consult on how to build your product.

Lots of huge companies use nearshore software programming services these days. For example, Intel, that outsources some of the jobs to Costa Rica, where the tech industry is much more developed than in the United States and the prices are considerably lower.

Software Development Outsourcing: Nearshore Prons and Cons

Previously we briefly went through the biggest advantages of software development outsourcing nearshore strategies; however, it would be best, if we explained it in a bit more specific way to you. In the following table, you can find all the pros and cons of nearshore software outsourcing:

Pros

Cons

Cost reduction. The main reason for turning to nearshoring and outsourcing in general – is to reduce company’s expenses. While nearshoring might not be as effective in this as offshoring, it is still a great option, comparing to hiring specialists from your own country. Usually, companies, who choose nearshoring, look for a contractor in a country that currently is in a bad economy state. It highly correlates with software engineers’ rates, so, for example, if you are from the United States, you might want to look for specialists of the nearshore software development Mexico can offer. You might not realize that right away, but the difference will be significant.
Access to more qualified labor. When you are hiring someone within your own country’s borders, you are in many ways bound by them. Nearshore software development model allows you to broaden that territory, opening you access to other countries job markets to choose your specialists from. For example, Eastern Europe is well known for its outstanding IT specialists (including software developers) who in most cases have high profile education and vast experience in the field.
Easier control and communication. As company’s owner, you still want to be in charge of every process that goes on within it. Obviously, any top nearshore software development company will be more than happy to assist you with that, providing all the information you need. What is good about, you will have a really small time zone difference, enabling you to participate in all your company-contractor’s activity without any inconveniences.
No cultural or language barriers. When conducting business, cultural differences might sometimes get in the way. What is even worse is the language barriers. You see, software development is a field that requires specific terminology, that could simply be misunderstood when being translated from one language to another. That is why turning to nearshore software development center somewhere nearby is always a good idea.
Easier to take care of your documentation. Language is not the only thing that two countries of the same region might share. Usually, the laws of these countries are also alike, which makes it easier for your lawyers to take care of it.
New markets. In some cases, nearshore outsourcing can also be used as the way to enter new business markets.

Hard to find a trustful partner. Nearshoring requires you to find a contractor who does not simply understand the way your business works, but will also be on the ‘same page’ with you in terms of the project you are hiring him for.
Cultural differences might not be that significant, however, there are times when they come in the way. We are talking about such things as national holidays, working hours and all other moments that can affect the work on your project.

As you see, there are far more benefits to nearshore outsourcing, than there are disadvantages. That means that it is worth at least a bit of your time to check this option out.

Nearshore Software Development: How Much Can You Save?

We say – quite a lot. Think about it, the first thing that you will notice about nearshoring are the prices of plane tickets. There is no way that you will not have to travel to your outsource team, so keep in mind that flights within the continent are always cheaper. The bigger is the distance – the bigger your travel expenses will be and sometimes the financial difference between nearshoring and offshoring will not be able to cover that.

Another thing to consider – cultural differences. They can also be pricey and influence the communication process with your contractor a lot.

Finally, let’s compare rates of different countries’ software development contractors so that you will feel the difference yourself. All the numbers will be taken from Upwork and PayScale:

As you see, by hiring your software development team from Eastern Europe you can significantly reduce your costs.

FAQ

What is nearshore software development, and how does it differ from other outsourcing models?

Nearshore software development refers to outsourcing services to companies located in neighboring or nearby countries. Unlike offshore outsourcing, which involves partnering with companies in distant regions, nearshoring offers advantages like closer time zones, cultural similarities, and easier travel logistics. This proximity often leads to better communication and collaboration.

What are the primary benefits of choosing nearshore software development?

Nearshore software development provides cost-efficiency, access to skilled talent, and the advantage of working within similar time zones. It also helps reduce language and cultural barriers, making collaboration more seamless and effective compared to offshore outsourcing.

Which companies should consider nearshore software development as a strategic choice?

Companies seeking to scale their development teams quickly without compromising on quality, or those who want to enhance their in-house capabilities without the challenges of offshore communication, should consider nearshoring. It is particularly beneficial for businesses requiring frequent interactions and agile workflows.

How does nearshoring impact project timelines and delivery speed?

Nearshoring can significantly improve project timelines and delivery speed. Proximity allows for faster communication and decision-making, minimizing delays caused by time zone differences. Additionally, overlapping work hours enable real-time collaboration and quicker feedback cycles.

What are the risks associated with nearshore software development, and how can they be mitigated?

Risks include potential differences in work practices and legal frameworks. To mitigate these, companies should conduct thorough due diligence when selecting a nearshore partner, establish clear communication channels, and ensure all legal and contractual obligations are well-understood by both parties.

Resorting to Nearshore Software Development

We say that there are plenty of reasons for you to consider this option. Sure, it might be not as compelling in financial terms, as offshoring; however, nearshore outsourcing allows you to find that ‘golden middle’ between reducing costs and keeping the control over your project. With nearshore solutions, you will always be able to keep in touch with your team and fix any issues whenever they might occur.

More and more companies turn to nearshoring these days, as it is one of those solutions that are both convenient and cost-effective. Not to mention the fact, that nearshoring has one of the highest productivity levels out of all outsourcing solutions that currently exist on the market. That means that less amount of people on your nearshore location will give you better results than a twice as big team on an offshore location.

In any case, nearshoring is a perfect way to get your software development projects done quickly and for a considerable price. Most companies have already learned that now it is your turn.

Angelika Bohdan

Angelika is a Blogger and Content Marketer passionate about the topics covering IT resources optimization, building nearshore R&D centers in Eastern Europe and outsourcing business processes. She has over 5 years of experience in managing IT projects and discovering the ways to optimize business processes inside technological companies.

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