What is Nearshore Software Development?


Companies usually explore offshore solutions when they decide to outsource the development of certain parts of their application or projects. This practice is known as offshoring. While offshoring has its advantages, it can also have some disadvantages. In recent years, nearshoring has become an increasingly popular alternative to offshoring as it offers most of the benefits of outsourcing without many of its drawbacks.

To fully understand if nearshoring is right for your software development team, it’s important to first know what it is, how it works, and what its benefits and challenges are.

What is nearshore software development?

Nearshore software development is a model in which companies delegate their software development projects to companies in neighboring countries with lower labor costs. It allows companies to outsource their software development projects to teams in a few time zones.

This allows for improved flexibility, responsiveness and communication, which makes all the difference in the success of the project. By choosing nearshoring over other outsourcing models, you can have faster turnaround times and more control over the quality of your project without sacrificing price.

Nearshoring also allows companies to maintain close communication with outsourced workers. This type of working relationship also offers an easier transfer of knowledge and ideas between two teams working together on a daily basis, resulting in greater efficiency at all levels.

Related: Meeting Tech Talent Where They Are: An Interview with Clay Kellogg at the Terminal

Benefits of nearshore development

Nearshore software development has several advantages. They include reduced communication barriers, better profitability, improved software quality and increased development speed.

Reduction of communication barriers

Communication barriers between people from different cultures make outsourcing difficult, but nearshoring brings you closer to your developers, so you don’t have to worry about communication issues as much. Better communication, in turn, leads to more effective management and better overall project results.

Better profitability

The main reason companies choose nearshoring over onshore software development is cost-effectiveness – nearshoring is usually significantly cheaper than outsourcing to companies in the same country.

Ultimately, nearshore software development can save tens of thousands of dollars on a single project or hundreds of thousands on an ongoing basis. This could be essential for startups with limited funds or for companies that want to reduce overhead without sacrificing quality.

Improved quality

When working with outsourced teams, a common complaint is that communication gaps lead to shoddy work delivered by lower quality developers. Nearshoring inherently eliminates much of this confusion and miscommunication, increasing the likelihood that your software development needs will be met the first time.

Increased speed

Time zones play a huge role in determining turnaround times for projects involving outsourced teams. Even though some countries may offer 24/7 support, there will always be some kind of delay due to distance and cultural differences. Working with a nearshore team means reduced lead times and increased productivity.

The challenges of nearshore development

Despite the benefits of nearshoring, there are some drawbacks worth noting before outsourcing development to the nearshore team.

Verification of skills and competences

Finding a reliable partner to handle your development tasks is difficult, especially if you’re working with someone in another country. Even if you’ve done your research and found a team that seems capable of handling your work, it can be difficult to verify their level of expertise or experience.

More expensive than offshore

Although nearshoring significantly reduces your labor costs, it is more expensive than offshore development. For example, you will save money if you outsource to India, where wages are lower than in Western countries. But if you choose a nearby location like Mexico, where salaries are higher, your savings will be less.

Limited alternatives

Nearshoring by definition limits your pool of potential partners. Since geographic proximity matters most in deciding whether or not to go nearshoring, having too few options can be frustrating. It can also prevent you from hiring high-quality developers in other parts of the world who meet your unique needs.

Some cultural differences

Although you and your nearshore development partner speak a common language, it is important to keep in mind that you are likely to encounter cultural differences. Additionally, if your business practices are not aligned with those of your partner, you may not be able to completely avoid misunderstandings and misunderstandings.

Read more: What are the main risks of outsourcing software development?

How to Choose a Nearshore Development Provider

Choosing a top notch nearshore software development team can be a daunting task with many factors in play. Here are some tips to help you find a suitable team for your project.

  • Specify your software requirements: Before starting a project, create a list of everything you need from your software and make sure it’s clear to everyone involved.
  • Hire a company with a proven track record: A company with years of experience will likely have an easier time delivering high quality work than a company without much experience.
  • Ask about previous clients: If possible, ask references about their experiences working with a specific company. This will give you insight into how well (or how poorly) they perform on projects and how well they meet deadlines.
  • Look for companies that know how to prioritize tasks: When starting out with a new team, communication is key. The last thing you want is for tasks to get overlooked because your developers don’t know which ones need more attention.
  • Choose companies based on their expertise: While cost should always be considered when looking for a new developer, you should be prepared to pay for the type of expertise required by your software development project.
  • Find a team that works quickly but efficiently: Not only do you want your team to work quickly but also efficiently, otherwise you could end up paying more than necessary for overtime worked.
  • Be prepared for revisions: Software is never perfect at launch; it takes time to reach its full potential. As such, expect a few revisions along the way to make improvements and squash bugs.

Read next: Onshore vs. Nearshore vs. Offshore outsourcing: what are the differences?


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