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Nearshore Software Development – Everything You Need to Know

May 26, 2020

In the current world of software development, outsourcing is a crucial necessity. Even in this year, IT businesses are continually innovating to find ways to remain relevant amongst the competition. Outsourcing allows companies to focus their time and money on the development of core competencies. They are hiring contractors to carry out jobs that could have they cannot complete with their in-house teams. Outsourcing typically helps software development companies to optimize their resource utilization and achieve sustainable results.

There are several outsourcing models, offshore, onshore, and nearshore software development. In this article, we elaborate on the nearshore software development model’s topic and why it is essential. Read on to learn more.

What Is Nearshore Software Development?

The nearshore outsourcing model involves the delegation of software development tasks to contractors in neighboring countries. Businesses do this mainly to have better control of their operational expenses, thus improving their bottom lines.

Nearshore outsourcing provides certain benefits like cultural and language similarities, location proximity, and lesser differences in time zones. That helps IT software development companies to get their required jobs done at lower costs with efficiency.

Mexico and Canada serve as nearshoring locations for software development companies in the US. Similarly. In Europe, Ukraine is often the preferred nearshore outsourcing country for nations in Northern and Western Europe and the Middle East. Ideally, the time difference between the software company and its nearshore contractors should be between 1-3 hours.

Nearshore vs Offshore Software Development

So, how does nearshore software development vary from offshore outsourcing? Especially, since in both the models, the jobs are outsourced to contractors in a different country.

Offshoring specifically refers to outsourcing jobs to contractors in a distant foreign country. For example, the most common model is where companies in the US offshore their work to Asian countries. The main aim when opting for IT offshoring is to look for a country with a lower hourly wage rate or salaries and a considerably big talent pool. It typically helps software development companies in cost-cutting while hiring quality engineers and developers.

On the other hand, Nearshoring specifically looks for contractors in nearby countries to control the delegated work better. The time difference between the involved companies is that there is a significant overlap of business hours during which people can collaborate. For offshore software development, that kind of collaboration is difficult since there is, at the most, only a few hours of business hours overlap in most cases.

Pros Of Nearshore Software Development

Here are the main advantages of the nearshore software development process:

1. Better Collaboration

With fewer time zones differences between the two businesses, it becomes easier for the involved parties to collaborate. An increased amount of overlapping business hours allows both teams to discuss and develop codes in a more cohesive and connected manner.

2. Lesser Time To Market

By outsourcing their jobs through nearshore contractors, businesses can significantly reduce their operating timelines. With this model, they do not need to carry out all the jobs by themselves. Instead, they can delegate and achieve faster results. Also, as nearshoring allows better collaboration, there is an overall reduction in the time to market.

In this competitive market, less time to market is a crucial marker for business success.

3. Access to Talent Pools and Resources

It is not always easy to find the required talent in-house. One of the most significant advantages of nearshore outsourcing is that it allows companies to access the enormous global talent pool. It also helps businesses reap the benefits of other nations’ infrastructure and technology capabilities to build a robust IT product or service.

4. Focus on Core Business Capabilities

When companies outsource some of their IT requirements through nearshoring, they can focus more on their core competencies. Nearshore software development ensures that businesses invest the required time and resources in the necessary tasks. It also prevents the in-house employees from becoming overwhelmed and burnt out from excessive functions that are not equal to their skill levels.

All in all, it is an effective way for businesses to concentrate on what is essential.

5. Improved Risk Management

When companies divide and delegate their IT development components and operations amongst various nearshoring vendors, they take a step towards mitigating risk. It is always considered prudent not to put all capabilities in the same hands. The more you divide responsibilities, the better it is for risk management. The only caveat is that proper vendor research must be carried out before jobs are allocated to prevent avoidable issues.

6. Better Integration

Nearshore software development results in better overall integration because of the similarities in culture, language, and technical expertise. This kind of ease of integration is not possible if you opt for offshore outsourcing.

7. Cost Reduction

The increased demand and scarcity of quality resources has to lead to increased costs in most countries. However, software development companies can navigate this issue and reduce their hiring costs by tapping into the global talent pool through the nearshore outsourcing model.

8. Seamless Communication

Same or close-enough timezones and similarity in languages allow for better communication channels between the vendor and the software company. This kind of accessible communication is the key to better collaboration and product development. When you outsource to a distant foreign country, communication can become tricky due to the various language and cultural differences. Nearshore outsourcing, however, takes care of that issue.

Why You Should Consider Nearshore Software Development

As someone with decision-making authority in an IT software development organization, you must consider nearshore software development as a viable option for outsourcing. It not only can help you to get the necessary job done but also can be a cost-effective method of doing so. Moreover, with vendors in the same or close time zones, it becomes easy to manage the entire process without much hassle.

In this era of technological advancements and innovation, the nearshore software development model is a great way to build cost-effective solutions that benefit everyone involved.

At ParallelStaff, we create relevant solutions that can help you with your needs related to software development, talent acquisition, and retention of developers.

If you are looking to implement nearshore software development in your organization or want to know more about the model, then do not hesitate to contact us for more details.

Miguel Hernandez