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What is Nearshore Software Development? – CIO Insight

Companies commonly explore overseas solutions when they decide to outsource development for parts of their application or projects. This practice is known as offshoring. While offshoring has its benefits, it can also have some drawbacks. In recent years, nearshoring has become an increasingly popular software development trend and an alternative to offshoring because it provides most of the advantages of outsourcing without many of its drawbacks. 
To fully understand whether 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.
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Nearshore software development is a model wherein companies delegate their software development projects to companies in nearby countries with lower labor costs. It enables companies to outsource their software development projects to teams within a few time zones. 
This allows for increased flexibility, responsiveness, and improved communication, making all the difference in project success. By choosing nearshoring over other outsourcing models, you can have faster turnaround times and more control over your project’s quality without sacrificing price. 
Nearshoring also allows businesses to maintain close communication with outsourced workers. This type of work relationship also offers a more effortless transfer of knowledge and ideas between two teams working together daily, which results in better efficiency at every level.
Related: Meeting Tech Talent Where They Are: An Interview with Clay Kellogg at Terminal
There are several advantages of nearshore software development. They include reduced communication barriers, better cost-effectiveness, improved software quality, and increased development speed.
Communication barriers between people from different cultures make outsourcing complicated, but nearshoring brings you closer to your developers, so you don’t have to worry as much about communication issues. Better communication, in turn, leads to more effective management and better overall project outcomes.
The main reason companies choose nearshoring over onshore software development is cost-effectiveness—nearshoring is usually significantly cheaper than outsourcing to firms 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 critical for startups with limited funds or businesses that want to reduce overhead costs without sacrificing quality. 
When working with outsourced teams, a common complaint is that communication gaps lead to poor quality work being delivered by subpar developers. Nearshoring inherently eliminates much of this confusion and miscommunication, thus increasing the likelihood that your software development needs will be met the first time around.
Time zones play a considerable role in determining turnaround times for projects involving outsourced teams. Even though some countries may offer 24/7 support, there will always be some sort of delay due to distance and cultural differences. Working with a nearshored team means reduced delays and increased productivity. 
Despite nearshoring’s advantages, some drawbacks are worth noting before outsourcing development to the nearshore team. 
Finding a reliable partner to handle your development tasks is difficult, especially if you’re working with someone in a different country. Even if you’ve done your research and found a team that appears capable of handling your job, it can be hard to verify their level of expertise or experience. 
While nearshoring reduces your labor costs significantly, it is more expensive than offshore development. For example, you’ll save money if you outsource to India, where wages are lower than those in Western countries. But if you choose a nearby location like Mexico, where wages are higher, your savings will be less significant. 
Nearshoring limits your pool of potential partners by definition. Since geographic proximity matters most when deciding whether or not to go with 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 requirement.
While you and your nearshore development partner speak a shared language, it’s important to keep in mind that you’re likely to encounter some cultural differences. In addition, if your business practices aren’t aligned with those of your partner, you may not be able to completely avoid misunderstandings and miscommunications.
Read more: What are the Key Risks of Software Development Outsourcing?
Choosing a top-notch nearshore software development team can be a daunting task with many factors at play. Below are some tips to help you find a suitable team for your project.
Read next: Onshore vs. Nearshore vs. Offshore Outsourcing: What are the Differences?
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