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Nearshore Software Development: All You Need to Know

Nearshore Software Development: All You Need to Know

Nearshore outsourcing companies provide services for both onshore and offshore outsourcing. It helps you invest in IT talent and project management wisely while making it easier for your business to develop high-quality products on time and without much hassle. In addition to this, it also helps in cost reduction and resource optimization.

This article will discuss nearshore software development, its importance, benefits, and key metrics to help you choose the right nearshore outsourcing organization. In addition to that, we will also talk about certain disadvantages of outsourcing your product to nearshore software development teams. So, let’s dive into it to learn more.

What is nearshore software development?

Nearshore software development outsourcing is the process of delegating software development projects to people in neighboring countries. Typically, the time difference between you and your outsourcing service provider should be in the range of 1-3 hours. Consequently, you get better responsiveness and improved communication, ultimately leading to project success.

For instance, Latin America is a nearshore outsourcing region for the U.S.A.’s software development companies. Some of the most popular nearshore software development teams and sites for the U.S.A. in Latin America are - Brazil, Mexico, Argentina, Colombia, etc.

Having said this, it is also important to mention that there can be several other locations (consider offshore) that can provide great software talent within your budget. Some of the locations might be in the Indian subcontinent.

Top reasons to choose nearshore software development

It is one of the most obvious questions that can strike anyone’s mind when looking into nearshore outsourcing. So to unravel the mystery behind it, let’s quickly go through some important reasons -

Cost efficiency

If you’re on a budget constraint and there are no affordable service providers in your region, nearshore outsourcing is the way to go. In fact, the budget limitation is one of the key reasons why companies usually opt for this outsourcing model. You can start improving your capabilities without compromising quality and your services.

Higher return on investment

Nearshore software development companies help enterprises achieve a higher return on investment (ROI). This is because there is a considerable reduction in cost due to resource management like physical workforce and cost optimization, among others. Consequently, helping the organizations in the long run by maintaining the budget while keeping the net returns higher.

Organizational efficiency

Organizational efficiency improves through the support of different teams and the high levels of experience and expertise that the team members maintain. It helps the organization in achieving its revenue targets and other business goals. Working with the right nearshore outsourcing company can add skilled experts to your workforce, ultimately improving the efficiency of your organization.

Effective communication

Nearshore software development helps in establishing effective communication between both the internal team and the nearshore team by adding values like -

  • Quick meetings setup
  • Syncs in the common time zones for better collaboration
  • Negligible language barrier as English could be the prevalent medium of all communication. All these add-on values, in turn, help in maximizing the discussion outcomes for the common good of both organizations.

Similar work culture and practice

Due to the geographical proximity, nearshore outsourcing service providers are usually familiar with the work culture, ethics, and practices. This leads to seamless collaboration between the in-house and the outsourced team. For example - Latin America focuses more on the Agile software development methodology, which is aligned with the U.S. approach.

Key metrics to look for when considering nearshore software companies

Some of the key metrics that can help you in deciding what you need to consider before going for nearshore software outsourcing are -

Proximity to the host country

In nearshore outsourcing, the outsourced company serves better if it is close to the host nation. Collaboration becomes effortless since the closeness reduces the hurdles like cross-cultural and communication barriers.

Technical skills

Technical skills are one of the crucial metrics to consider when outsourcing software development. Consider the developer's expertise in programming languages, product management, database, and among others before hiring them. Once your project requirement matches the tech stack of the nearshore software development service provider, you can move ahead with the other metrics mentioned in this list.

Cultural compatibility

Proximity to the host country brings this additional feature. Since the developers come from neighboring countries, they will have better compatibility regarding cultural values and business practices. It will help both organizations collaborate better and work towards making the project successful. This helps the outsourcing organization establish better compatibility and productivity metrics going forward.

Minimum language barriers

It is another benefit of nearshore software development outsourcing. For example - English is one of the primary languages in the north and south Americas. Therefore, partnering up with an outsourcing company that is familiar with the language will help the teams from both organizations foster a culture of collaboration and teamwork.

Nearshore software development: Advantages

The major advantages of nearshore software development are as follows -

Resolves the cycle of additional workforce requirements

Nearshore software development companies have a high level of technical proficiency and the manpower to work on different projects. It can help large enterprises in solving the additional workforce requirement issue.

Better work efficiency

Nearshore software outsourcing thrives due to its day-to-day systematic approach to work. Such service providers understand the value of both time and money. Additionally, outsourcing helps companies utilize their resources for other business-critical and priority tasks.

No hidden costs

There can be a fear of various hidden costs when outsourcing nearshore software development companies or teams. However, it is nothing more than a plain hoax. In outsourcing, the discussion around cost and budget is generally sorted out at the beginning, which includes each cost variable possible. Thus, in the long run, you do not need to worry about cost management or hidden costs.

Shared time zone

A shared time zone helps the outsourcing organization connect and contact the nearshore software development teams during the same daylight hours. As both teams can connect and brainstorm in real time and no unwarranted delay occurs, which is not the case in the offshore model. Thus, it saves time and boosts productivity during active hours significantly.

Operational efficiency

Factors like - work efficiency, cross-cultural similarities, and efficient communication all together help achieve optimum operational efficiency. Ultimately, it's a win-win situation for the organization to outsource its software development projects.

More control over the project progress

Outsourcing to a nearshore software development company helps the organization have better control over several project modules. For example - the organization can monitor, validate, and analyze the progress made by the nearshore software development team. However, this can be very tricky and complex at times when there is no proper sync between both organizations. That’s why make sure to establish active communication channels for uninterrupted communication and updates.

Nearshore software development: Disadvantages

On the flip side, there are some challenges as well, like -

Communication for longer durations

If the distance between the regions is too far, there can be a communication gap between the teams. In addition, not keeping sound and effective communication among both internal and nearshore teams can sometimes lead to communication gaps.

Project technicalities

Due to remote communication, technical conversations and project technicalities may suffer. This, in turn, may cause the effectiveness and lack of productivity towards achieving the goals.

Selecting the right tech stack

Choosing the right tech stack is crucial for the project’s success. However, due to a remote setup, there can be intermediate hurdles in the selection and management of the tech stack. This can be a setback for the project itself as all the functionalities are tech-dependent.

Cross collaboration

Due to a lack of regular person-to-person meetings, the teams often may be unable to do the perfect sync they expect. This gradually causes deprecating collaboration among different teams.

Quality concerns

This is one of the major challenges when discussing outsourcing a nearshore software development company. Due to the level of technical expertise and skill set differences, there can be several concerns concerning the overall quality of the product. Therefore, it is essential to validate this factor before partnering up with an outsourcing service provider.

Closing notes

Nearshore software development companies can be game changers for any organization in the long run. It can help in growth, achieving efficiency, and maintaining organizational level productivity. Therefore, if you’re looking for the convenience of onshore outsourcing but with the benefits of offshore, then the nearshore model is the perfect gateway for you.

In addition, if you are looking for a systematic way of hiring remote software talent in nearby locations, you must try Turing. It is a one-of-a-kind platform that utilizes the perfect amalgamation of the planetary talent pool and AI in the form of an Intelligent Talent Cloud. It helps companies source, vet, match, and manage the world's best developers remotely. Join 300+ companies that trust Turing for their hiring needs. Sign up now and get a 2-week risk-free trial period.

Author

  • Content Writer - Turing.com

    Abhishek

    Abhishek is a Geek by day and Batman by night. He loves to talk about Data, and his passion encircles around Trekking, Hitch Hiking, Gardening, and analyzing Ancient Indian Texts. His geeky stuff got highlighted at Microsoft, Code Project, C-sharp Corner, etc.

Frequently Asked Questions

Onshore means outsourcing software development in the same country or region. In contrast, nearshore indicates that the company you hired is in another country with close geographical proximity.

Yes, there are several considerations that should be kept in mind. For example -

  • Cross-checking the tech stack and its compatibility
  • Expertise in the domain and the peer reviews
  • Team size and level of skill set available with them
  • Analysis of the internal team
  • Mapping the project requirements with the future scope

Here a some of the key factors that you must consider when looking for a nearshore software development partner:

  • Technical skills
  • Experience and reputation
  • Communication process
  • Cost
  • Scalable infrastructure

Some of the associated risks in nearshore software development are -

  • Lack of effective teamwork and cross-collaboration. Establishing an active communication flow through different channels can ensure the team cooperates and lead to project success.
  • Less one-to-one meetings for project discussions. Implement mandatory one-to-one meetings monthly for small teams. On the other hand, if the team is big, try to schedule a meeting once in 2/3 months.
  • Timezone and work schedule imbalances. Utilize a centralized and cloud-based calendar where everyone updates their work timings and schedules. Consider fixing a time overlap where everyone in the team must be online, you can use this overlap for team-wide meetings and priority discussions. This would simplify collaboration and eliminate any wait time due to timezone differences.

Even if you are not a trained project manager, the first and foremost aspect of a successful project is to understand the scope of the project. Ensure to set and communicate all goals including outsourcing goals, so the remote team understands what’s expected of them. Invest in a centralized cloud-based project management system to track and measure goals. Furthermore, aligning work methodologies, and workflows and establishing an effective communication flow can be the key to a successful project in a nearshore setting.

Some of the major benefits are as follows -

  • Geographical proximity means similar (if not the same) time zones
  • Time overlap is a huge plus
  • Skilled and experienced workforce
  • Lower cost
  • Culture affinity and language fluency
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