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Everything You Need to Know about Nearshore Software Development

Alexander Stasiak

May 19, 20235 min read

Software development

Table of Content

  • What is nearshore software development?

  • Benefits of nearshore software development

  • How does nearshore location work?

  • Models comparison: nearshore vs offshore vs onshore

  • How to choose the right nearshore software development company

  • Risks involved in nearshore software development

  • How to mitigate risks in nearshore software development

  • To sum up

Hiring your own team with a highly skilled software dev team and not paying an arm and a leg for it is no easy fit. And it might get even more difficult if you’re limiting yourself to finding such a company only within your country.

That’s why it might be a good idea to consider some nearshore software development outsourcing services.

But what does a nearshore software development model look like, exactly? And when should you go for it?

Here are all the questions you might have – answered.

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What is nearshore software development?

Nearshore software development team often means you’re hiring a software development team from a country in the same timezone as yours or very close to it.

As all outsourcing models, it comes with its own set of benefits and downsides. 

Let’s start with the benefits.

Benefits of nearshore software development

Cost-effectiveness

The larger the talent pool, the higher the chance you’ll be able to get qualified software developers and get an experienced software dev team within your budget.

Also, it’s much cheaper to travel to meet in person if you’re outsourcing your project to a neighboring country than it would be in case of offshoring.

Time zone proximity

This basically means – your waking hours are their waking hours.

With a nearshore software dev team, you can communicate easily. Whether you need to jump on an update call or fly over for a workshop to kick off the project, working with a team that’s in the same time zone (or not far from it) nearshore team makes it easier to keep the project going smoothly.

Highly skilled experts

Depending on where you are, it might turn out that finding the right talent isn’t as easy as you’d like if you’re limiting the search only to your country.

More countries to choose from equals more chances to find your superstar dev team that’ll be a good fit for you.

English proficiency

You might have some doubts when it comes to a potential language barrier, but they’re becoming less and less apparent. More often than not, you’ll be able to communicate with your chosen software product development partner from a nearby country in English.

How does nearshore location work?

As we’ve mentioned, a nearshore software development is when you’re hiring a software development team from a country in the same timezone as yours or in very close geographical proximity.

For example, if you’re in Norway, you could hire a software dev team from Estonia (1 hour ahead) or Poland (the same timezone). 

For the US, it would mean Mexico or Latin American countries (the same timezone or a few hours ahead/behind, depending on the exact location).

For Australia it might be New Zealand (about a 2-hour difference) – you get the gist.

Models comparison: nearshore vs offshore vs onshore

There are three models for outsourcing software development: the nearshore software outsourcing, offshore and onshore.

You already know what nearshore software development means. Onshore software development is when you hire software engineers for a company from your own country. Offshore, on the other hand, means hiring one from a different country, located further away.

How do they all compare to one another? Let’s take a closer look.

Onshore software development

This might be the most pricey model out of all three. With the number of companies looking for top tech talent now, you’d need to be willing to pull out the big dollars. The best development teams might drive you over the project budget if you decide to follow this outsourcing model.

On the upside, you’d be working in the same timezone which should make communicating and in-person meetings as easy as they can be. And did we mention no cultural differences? You’ll know what to expect from the start.

Another reason to consider this type of outsourcing is data privacy limitations. 

Offshore software development

Offshore opens up the largest talent pool. Compared to the other two models, it might also turn out to be the most cost-effective. But with the costs cut, there are other things to take into consideration before you decide to go for it. 

One of the biggest is the time zone difference. Communicating might prove hard when you’re starting work right after they’ve finished theirs.

In some cases, cultural differences might also be difficult to handle, especially if you’re working with a software development team, project manager or company from a country whose culture strongly differs from yours. For example, some software development teams from Asian countries might have a different work style than company culture you’re used to if you’re from the US or Western Europe. For some, this will be a deal breaker.

And still, there’s the odd chance that communications will be distorted by a language barrier (although that’s less of a problem now than it used to be).

Offshore software development might be a good fit for you if your project doesn’t require a high level of collaboration. You can also have offshore development team outsource part of your project that your that consists of repetitive tasks that can’t be automated.

Nearshore software development

As you can see, nearshore software outsourcing is right there in between these two models. It’s a happy medium that combines the offshore outsourcing benefit of cost-efficiency and a larger talent pool to choose from, with the onshore ease of working with a contractor within the same country, or nearby time zone.

Also, you probably won’t have to deal with that much of cultural differences if you find yourself a nearshore partner.

If:

you need a partner to strategize and discover how to bring your idea to life

you want to build a product, using the Agile approach

you have a project that requires regular in-person (or Google Meet) collaboration

your company needs a digital transformation, and your systems are complex

then choosing a nearshore development partner might be the right option.

But how do you know which nearshore development company to choose?

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How to choose the right nearshore software development company

Here’s what criteria you should look into:

Capabilities & expertise

This one’s a no-brainer. The entire team’s experience and skills need to be aligned with what you need. Make sure the experience includes working specifically with the technologies you’re using in your in house team.

Start with going through their website, past projects (who they worked with and what kind of projects there were) and employee history. 

When you downsize the list to a few companies, get them on a call where you’ll be able to go deep into the details and assess if they’re a good fit.

Team size

Ah, this one’s also really important. What’s the scope of your project? How much additional resources do you need? Get clear on that before you go into search mode.

Will a bigger team always be better? Not necessarily. It will depend on how big your project is. For smaller software projects, a small, dedicated team might be better. It’ll keep things simple and more cost-efficient. But for more ambitious and complex projects you’ll probably want to bring on a bigger software development partner who can handle a more robust workload.

Reputation

The proof is in the pudding, right? See what previous clients say about working with the teams that caught your interest.

Check testimonials, customer success stories and reviews to see how they were able to keep up with the demands of their clients – and what those demands were. 

And also, how many other nearshore software projects have they successfully delivered so far? The more experience a nearshore software development partner have under their belt, the more you can be sure working with them will be satisfying and fruitful.

Having said all that – you also need to keep in mind what the risks of hiring a nearshore software development company are.

Risks involved in nearshore software development

The biggest risk you’re taking with the nearshore outsourcing of your software development project is one that’s actually a possibility for every type of outsourcing work – intellectual property theft.

How can you protect your IP when you’re entering into an offshore outsourcing or agreement?

First of all, you should thoroughly vet the candidate companies. Ask detailed questions about their processes. Get deep into the details. 

Make sure they’d be taking all the necessary precautions to keep your data safe. How would they handle a cyberattack or data leaking? How do they fight off malware, viruses, and trojans? Assess if they have a plan at hand just in case.

If you’re hiring nearshore software developers (or, basically, outside of your country) be sure to also learn how your IP would be protected by that country’s data protection laws.

And when you do find a team that checks all the boxes, here’s what to do to stay secure when working with them.

How to mitigate risks in nearshore software development

Secure data storage

Store data on your servers and make sure it’s an encrypted data storage. Put an ACL (access control list) in place so they get access only to data that are necessary for them to complete the project or task at hand. Make sure APIs are secured, too.

Data encryption

Your data will be better protected when it’s encrypted before your software partner starts working on the project. That way, even if the data does fall into the wrong hands, they won’t be able to access it.

Make sure that your nearshore development partner has an infrastructure that supports your data encryption, too.

Regular audits

Cybersecurity changes rapidly. There are always new ways being invented to get past security checks. Make sure you regularly audit the software developers or dev team you’ve given your business to. Keep the audits up throughout all the processes and whole project, especially if it takes much time to complete.

To sum up

With so much to gain, nearshoring software development could be the cost effective and optimal choice when you’re looking for a software development outsourcing partner.

It’s less costly than onshoring, and at the same time allows you to avoid the risks that come with offshoring. Sure, the talent pool is smaller than in the case of offshoring, but you get to work with a dev team whose working hours overlap with yours, which might be crucial for communicating.

Have some other questions popping into your head? Reach us at .

 
Everything You Need to Know about Nearshore Software Development

Published on May 19, 2023

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