Top Benefits Of Nearshore Software Development

Gimena Aguerreberry
July 1, 2021

The rise of software development outsourcing as a competitive advantage has led to much debate over which of the different outsourcing models best applies to the goals of businesses.

In the last decade, the geographic options for outsourcing software development have increased. These options fit into one of the following outsourcing models: nearshoring, offshoring, and onshoring.

While traditional offshoring to Asia or Eastern Europe has always been lauded for its cheap labor, for companies that practice agile, or require better collaboration, communication, and a higher level of engagement, the advantages of nearshore outsourcing are clear.

Nearshore outsourcing is getting work or services done by agencies located in countries near you. For example, American businesses can decide to outsource their work to Colombia, Argentina, or Uruguay.

Compared to offshore and onshore outsourcing, nearshore outsourcing is a lot less complicated and a lot more beneficial. In addition to having cultural similarities with the person or team you will be working with, geographic proximity means fewer travel costs, minimal time zone difference, and better communication. Workers will likely speak the same language you do, making it far easier to discuss projects and concerns with your outsourced team.

In this article, we’ll discuss the top benefits of nearshore software development.

1. Lower Labor Cost

Nearshoring allows companies to tap into a global talent pool without the high expenses associated with hiring within the US. For example, US organizations can save an average of 38% to 48% in labor costs by outsourcing IT functions to Central and South America.

Nearshoring can be the best option if you want to find the perfect balance between the price and the quality. It might be a bit costlier than offshoring but owing to increased control, you can get a better outcome in the end.

2. Better Access & Control

When you offshore your development, the subcontracted team is located far away and you have limited access to them. Contrarily, when you nearshore, you are geographically closer to the team, perhaps just a short flight away. This makes it a lot easier for you to keep things under control. If you are planning to outsource your software development, it is better to closely monitor the process.

Nearshoring allows visits from your subcontracted team from time to time due to their proximity to your workplace.

3. Improved Collaboration

The proximity of locations helps minimize most of the cultural and language barriers that can cause significant issues in offshoring solutions. In-house and outsourced teams can collaborate more successfully to achieve the engagement, flexibility, and innovation needed for agile software development.

4. Team overlap & responsive communication

Successful software development projects are predicated on efficient communication between teams. Nearshoring makes it possible for your onsite and remote teams to share similar (if not the same) time zones, therefore overlapping throughout their workday.

Most nearshore countries only have a one-hour time zone difference with the US, this is by far the biggest advantage of the nearshore model when compared to overseas vendors, because however skilled offshore developers may be, communication with teams so far away can prove incredibly challenging and may lead to project delays and other unforeseen risks if not carefully managed.

  1. Cultural Affinity and Language Fluency

Countries in Latin America share the Western cultural values of the United States, and in addition, most of its population has been following US pop culture and events since childhood. Whether it’s through sports, music, films and Netflix series, or late-night shows, Latin Americans are regular consumers of US culture.

Moreover, Latin America’s software development workforce is mostly English fluent. In addition to government initiatives to improve English language teaching in public schools, private bilingual schools teaching English as a second language are very popular, and high-paying jobs tend to require language proficiency.

6. Improved Code Quality

Smoother collaboration, minimum language barriers, and access to world-class talent and technical skills contribute to high-quality deliverables. The proximity also makes localization easier, e.g., better-designed user-facing components that reflect the local culture, language, regulations, and preferences.

7. Trustworthy Infrastructure

For most US companies, nearshoring means working with technical teams located in Latin America. These countries are experiencing a boom in IT resources and infrastructure that can support various software development services.

8. Competitive Edge

Nearshoring helps introduce new ideas and processes that can spark "disruptive outsourcing" — an outsourcing model that goes beyond cost-saving and performance improvement to creating innovation and overcoming fundamental technical challenges for advantage over the competition.

9. Extended Talent Pool

When you nearshore your development, you broaden your pool of talent by finding a more capable workforce for your projects. Latin America has succeeded to make its mark in the IT field. It has become a popular destination when it comes to nearshore software development. Many US businesses have entrusted top developers from Latin America with their projects instead of in-house teams.

10. Easier Integration with Internal Development Team

One of the key advantages of nearshore software development is engaging with a team that possesses cultural similarities, a shared language, and technical expertise that enables the external team to integrate with your existing team quickly.

Improved collaboration and communication, and the respect that comes from working with a peer who possesses a similar level of technical expertise, increases the rate at which internal resources and external resources can form a comradery. This in turn facilitates the knowledge transfer required to get your external team to learn and adopt your processes and get up to speed on the details of your application quickly.

By accelerating the onboarding process and knowledge transfer, your external team can begin making valuable contributions early in the process, greatly improving your ROI, and ensuring your project deadlines are met.

Conclusion - Top Benefits Of Nearshore Software Development

Nearshoring offers many benefits, this model can reduce overhead costs associated with hiring an in-house management team and minimize issues associated with coordinating resources located in a different location. You can access specialized expertise and fill skill gaps whenever the need arises to support an agile development process so you can respond to market demand nimbly without being bogged down by a large in-house team or administrative tasks.

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"Top Benefits Of Nearshore Software Development" by Gimena Aguerreberry is licensed under CC BY SA. Source code examples are licensed under MIT.

Photo by Artem Beliaikin.

Categorized under software development.