Nearshore Software Development: When Is It The Best Choice?

To grow, businesses must make crucial decisions regarding strategic and operational agility. Technology is a huge factor and ensures a company can perform competitively. Software development is an area you should examine closely.

Many organizations are choosing to outsource from a nearshore team. But is that what you need, too?

We've written this article to aid in your choice. By the end, we're confident you'll understand whether nearshore outsourcing works for your organization.

Nearshore, Offshore, Onshore Software Development — What Do They Mean?

Before we dive into more on nearshore outsourcing, we'll explain the differences between outsourcing destinations.

Across all job fields, you'll find an outsourcing company may label itself onshore, offshore, or nearshore. All are out-of-house, but their geographical locations differ.

• Onshore: The outsourcing destinations of onshore companies are typically in the same area as your company. Consultants live in your area and come to your office to troubleshoot IT issues.

• Offshore: With an offshore developers company, your support staff is abroad. Remote teams are generally call-center-based and the most common country for offshore outsourcing is India.

• Nearshore: As an offshore sub-category, your team still performs remote work, but the country is in the same time zone as yours. In-person communications may also be arranged. Countries in Eastern Europe are popular nearshore outsourcing options for Western European businesses.

Onshore software development typically has higher pricing, as you're paying for in-demand specialists. Nearshore and offshore outsourcing offer lower costs as their countries follow different wage systems.

Outsourcing Software Development — Advantages & Disadvantages of Your Potential Outsourcing Company

When looking at an outsourcing company, many business owners have turned to nearshore development. But why? Why doesn't everyone use onshore software development?

Well, they decided it best suited their organization's needs. If you're stuck between choosing a nearshore outsourcing company or hiring developers elsewhere, start by examining the pros and cons.

Onshore and In-House vs. Offshore Teams

Let's start by seeing why an onshore software development company or in-house team is advantageous. Their pros and cons are similar, so we've combined the two for easy reading.

The Onshore and In-House Advantages

• Face to face communication simplifies collaboration and conflict resolution. Taking in-person means no lapse in communication.

• The language and cultural compatibility will line up. Your onshore outsourcing company speaks your native language, and the work culture is most likely similar. Matching professional norms can improve communication.

• Your working hours match up since the team is local.

The Onshore and In-House Disadvantages

• You'll pay a premium for the overhead and contract flexibility. The overheads will have high salaries to ensure the retention of local professionals.

• There's a distinct lack of local software developers. It's a competitive, in-demand field, and the employment outlook is expected to grow by 22% in the U.S. alone. This will directly impact the cost you pay.

Offshore vs. Nearshore Teams

Now we'll delve into the pros and cons of choosing an offshore or nearshore team.

The Nearshore Advantages

• Since a developer’s company is a short flight away, face-to-face collaboration is wholly possible when preferred or necessary.

• You'll have similar working hours, easing the development process. A nearshore outsourcing company won't have more than a one or two-hour time difference at most.

• You'll cut costs. Offshore is the cheapest, but nearshore still offers a lower price than in-house or an onshore team.

• The price-to-value ratio is worth it. The per-hour pricing is slightly higher than offshore teams, but productivity levels are higher as a result.

The Nearshore Disadvantages

• The work is mainly remote. Though taking a plane over is possible and relatively inexpensive, the costs over time can add up. As a compromise, companies can opt to have a project manager for face-to-face communication.

• The language compatibility and cultural norms may differ. Nearshore software development companies typically have a language in common.

Does Nearshore Software Development Jibe with Your Organization?

Choosing to outsource with a nearshore team may be what you're leaning toward.

Nearshore outsourcing will suit your organization if you want to cut costs but not lose the possibility of in-person collaboration. There may be cultural misunderstandings at first, but they'll diminish as your relationship grows.

All-in-all, nearshore outsourcing gives companies the most bang for their buck. If that's something that interests you, then it may be time to check a few companies out. Contact us today to learn more.