What Is Nearshore Software Development? Everything You Need To Know

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There’s a reason why 64% of global companies outsource their software development. They have recognized the significant advantages of doing so and hope to leverage those to save money while still cutting their time to launch. These days, the most effective outsourcing comes in the form of nearshore software development

Today, we will give you everything you need to know about nearshore software development. 

  • What nearshore development is and how it works
  • Significant advantages and potential disadvantages 
  • Potential nearshoring regions for US-based companies
  • How to choose the right nearshoring development partner
  • How to get started with the nearshoring process
  • How ParallelStaff can help get the ball rolling 

What Is Nearshore Software Development?

A nearshore software development company uses a strategic outsourcing model in which companies collaborate with experienced software engineers in nearby countries to cut costs while still shortening their time to launch. 

In the nearshoring model of outsourcing, geographical proximity plays a significant factor in success. Because nearshore partners share time zones, work hours, and other significant overlaps in language and culture, communication and collaboration have the potential to increase exponentially.  

When viewed in contrast with standard outsourcing, significant advantages of using a nearshore software development service over alternatives like onshoring and offshoring become increasingly apparent. 

Onshoring vs. Nearshoring

If your company is based in a major US city like Chicago, NYC, or Los Angeles, you may have already investigated—or even experimented with—onshoring.

Through the process of onshoring, you can partner with teams in nearby towns and suburban areas, where cost of living and salaries are lower. While onshoring can be a savvy move, it doesn’t come close to delivering the savings nearshoring can.  

Offshoring vs. Nearshoring

In offshoring, companies in the United States partner with development teams in other countries—often across oceans and vast time zones. While initial savings may look attractive, companies that choose this model often find over time that wide gaps in language, time zones, and cultural approaches to work impede progress. 

Nearshoring, however, is a subset of offshoring in which companies are able to access tech talent in a nearby country. Their close proximity allows them smoother and more effective working relationships. 

For companies based in North America, this often means looking into nearshoring partnerships in South America and Latin America. 

Advantages of Nearshore Software Development 


Nearshore software development offers distinct advantages that leads companies in the United States to choose it over both offshoring and onshoring. 

Direct advantages of nearshoring include: 

  • Better collaboration. Close proximity means overlapping work days due to little (or only slight) time zone differences. This allows for seamless, synchronous collaboration between your home team and your offsite, nearshore development partners.
  • Lesser time to market. Many skilled software developers sharing the workload greatly narrows the window of time it takes to bring a project from idea to reality.
  • Improved risk management. Given adequate vetting, dividing the project among various skilled teams can mitigate risk and keep you from putting all your eggs in the same development basket. 
  • Access to talent pools and resources. No matter how good your on-site development team, there will always be skill gaps. There will also be periods when you have too much work for your current team to handle. Nearshore software outsourcing allows you to widen your talent pool without the cost and hassle of onboarding new full-time developers. 
  • Focus on core business capabilities. Nearshoring custom software development grants your in-house employees room to breathe and focus on their core responsibilities without getting overwhelmed. 
  • Seamless communication. When working with nearshore developers, online collaboration tools—from video calls to synchronous and asynchronous messaging and project management systems—augmented by occasional onsite visits help communication flourish. 
  • Better integration. The similarities in languages, cultures, work ethics, and time zones afforded via nearshore software development services lead to much more seamless communication than, say, when working with developers across the world. 
  • Cost reduction. Offshore outsourcing, though it may seem “cheaper” in the short run, can lead to eventual hurdles that slow down production, ultimately costing you more in the long run. 

Potential Nearshoring Regions for US Companies

Simply sharing proximity with a country is not enough. The best nearshoring software development partnerships happen when the country in question has specific factors in place.

Three common factors that make a country suitable for nearshoring include the following:  

  1. Cultural alignment. Shared cultural values enhance trust and speed collaborations. On the other hand, contrasting cultures can sometimes lead to misunderstandings, conflicts, and needless inefficiencies.  
  2. Economic and political stability. These two factors, often intricately connected, lower the chance that your project will be interrupted as your nearshore partners deal with unpredictable economic or political upheavals.  
  3. Similar time zones. Being able to work and communicate synchronously during work hours helps you make the best use of your time and keep your project on track.  

Due to these three important factors, companies in the United States often look south to Costa Rica, Argentina, Brazil, and Mexico for available nearshore development teams. 

Costa Rica

In recent years, an outsized number of US-based Fortune 500 companies have outsourced tech and IT work to Costa Rica.  

Given the country’s stability, flourishing democracy, and strategic location, this comes as little surprise.

Argentina

Thanks to Argentina’s free trade agreements with multiple countries in the Americas (including the United States), paired with its highly educated and skilled workforce, the country has increasingly become a nearshore destination for North American companies. 

Brazil

With sufficient digital infrastructure, a skilled workforce, and low labor costs, Brazil has long been considered a viable option for nearshore software development.

However, amid all these options, one country stands out as a clear choice.

Mexico 

Though you do have other options, we have found that hiring Mexican engineers is just a good idea. And we’re not alone in this opinion. There’s a reason why Mexico is a popular region for nearshoring software development. 

Over recent years, the Mexican government has systematically invested in the country’s tech landscape, leading to a highly skilled, available workforce with advanced technological capabilities. 

The technological market in Mexico has consistently been developing. The country sees modernization as cultivating a skilled I.T. workforce who can work remotely and bring home foreign currency…Modernizing Mexico’s infrastructure enables its citizens to compete with the international workforce and technology. Consequently, a robust infrastructure and a focus on improvement have led to an exponential rise in the number of skilled developers and remote workers in Mexico. (Entrepreneur)

Even better, companies that partner with Mexican engineering teams report very low cultural barriers. 

Though Mexico is a bit more of a high-context culture than the United States is, American and Mexican workers share significant overlaps in many basic cultural norms. Both cultures value hard work, good education, and respect. 

These shared values aid in communication and speed collaboration. 

The Process of Nearshoring

If you’re looking to hire a nearshore team for the first time, it would be a good idea to acquaint yourself with the big picture first so that you know what to expect and don’t miss any steps along the way. 

Step 1: Conduct an initial assessment and engage in project planning.

Identify your software development project requirements and assess the scope and scale of the project. 

This will put you in a strong position to clearly define your goals and objectives to communicate to your nearshore development team, putting them on the right track from day one.

It will also give you all the information you need as you investigate whom to partner with.

Step 2: Choose the right nearshore partner.

First, you’ll want to evaluate potential locations. Once you’ve centered on a country or region, investigate different nearshore software development services within that area, assessing the capabilities and expertise of nearshore teams.  

During this phase, it’s of utmost importance to conduct due diligence on potential partners. Anyone you partner with must first be able to demonstrate proof of concept, proof of expertise, quality control, and a demonstrated history of completing projects on time. 

Step 3: Establish effective communication channels.

Once you have chosen a nearshore partner, your next step should be to ensure you have clear and effective communication protocols in place. 

While you have a wealth of options, choose only the collaboration tools that will best pave the way for a smooth flow of information in both directions. 

Step 4: Implement project management methodologies.

Take time to select an appropriate project management framework to take your project from concept to initiation to planning, execution, performance, and completion.

A clear project management methodology will help you define roles and responsibilities, clarifying what the home office will be responsible for and what the nearshore team will focus on delivering. It will also allow you to easily monitor progress and milestones and aid communication as you work together toward launch. 

Step 5: Adapt to cultural differences. 

While working with nearshore software development teams always poses lower cultural differences than offshore teams across the world, that doesn’t mean there you will never face any potential pitfalls. 

Building strong cross-cultural teams doesn’t happen by accident. Part of your due diligence will include a bit of work to understand cultural nuances that could potentially impact your partnership, then taking them into account in a way that fosters a collaborative work environment that’s beneficial to all.

ParallelStaff Nearshore Software Development Solutions

When it comes to nearshore software development solution providers, ParallelStaff is your top choice. We make it possible for you to connect and onboard world-class engineers in Latin America in record time. 

We offer:

  • Cost savings 
  • Rapid scaling 
  • Increased flexibility 
  • Improved quality control 

We offer exceptional service, top-tier talent, and seamless, 10-day onboarding!

Software development services offered by ParallelStaff IT team include the following:

  • Front-end development: ParallelStaff’s diverse team of professionals offers unparalleled expertise for all your front-end development needs. The client-facing side of your project is the first impression, and our developers are highly skilled in UI/UX using HTML, CSS, and JavaScript. Your app will not only be functional but also look like a professionally designed app.
  • Back-end development: We’ll handle the behind-the-scenes server side so you can concentrate on outward-facing engagement with your audience and clients! This includes Java, .NET, C#, Visual Basic, VB.NET, PHP, Python, ASP.NET, Django, Perl, Laravel, Code Igniter, ASP, CakePHP, NodeJs, Ruby, Ruby on Rails, C++, GoLang.
  • Full-stack development: We’re masters of end-to-end applications. Our developers are fluent in Java, .NET, C#, Visual Basic, VB.NET, PHP, Python, ASP.NET, Django, Perl, Laravel, Code Igniter, ASP, CakePHP, NodeJs, Ruby, Ruby on Rails, C++, GoLang. We can handle whatever you need.
  • Mobile development: No matter what mobile application you’re shooting for (Android, Objective-C, Swift, React Native, Ionic, Cordova, PhoneGap, Xamarin, Xcode, Kotlin, Flutter), our skilled developers can get it done.

Whatever your needs, we are here to bring your projects to life. To leverage these benefits for your own upcoming launch, partner with ParallelStaff today.

To learn more and connect with us about a potential partnership, book a call. We’d love to learn more and discuss how we can partner with you to help you achieve your goals.

FAQs

  • What is the difference between onsite and nearshore? Having a software developer onsite means they are on the ground with you every day, whether that means on location in your offices or part of your core team in your virtual office space. A nearshore developer lives in an adjacent country and works on projects companies wish to outsource.   
  • What are the disadvantages of nearshoring? Nearshoring can pose risks related to security, quality control, and incompatible infrastructure. However, taking time to investigate potential partnerships and look for vetted companies with a proven track record can mitigate any potential disadvantages. 
  • Which countries are considered popular nearshore destinations for software development? Here in the United States, companies generally seek nearshore development partners in Latin American and South America, paying particular attention to Mexico. 
  • What factors should be considered when selecting a nearshore software development partner? When approaching nearshore outsourcing, it is always wise to evaluate potential locations, carefully assess the capabilities and expertise of nearshore teams, and conduct due diligence on any potential nearshore software development partners.
Miguel Hernandez

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