Why is Nearshore Software Development Booming in Today's Market?

Nearshore software development is a booming approach to outsourcing, allowing companies to delegate software development projects to nearby countries with similar time zones and cultural similarities.

Nearshore

May 10, 2023

9 minutes read

nearshore software development

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Nearshore software development is becoming increasingly popular in today's market, offering businesses cost-effective and convenient solutions for software development outsourcing.

Nearshore software development is booming due to its advantage point compared to onshore and offshore software development. Nearshore services allow companies to access a larger talent pool at a lower cost while retaining flexibility in scaling up or down their development needs.

Nearshore locations provide cultural similarities, similar time zones, and ease of communication, which reduces misunderstandings. The COVID-19 pandemic has accelerated remote work, making nearshore software development an attractive option for companies looking to work with remote teams. As remote work continues to grow in popularity, nearshore software development is likely to become an even more attractive option for software development services.

What is nearshore software development?

Nearshore software development is an approach to outsourcing where companies delegate their software development projects to IT consulting companies or teams of software engineers in nearby countries with similar time zones and cultural similarities.

This model allows companies to access and hire developers in neighboring countries through a provider specializing in such services. This means that the customer’s teams and the provider’s teams are usually distributed in different locations but collaborate in real-time.

How does nearshore software development work?

Nearshore software development is a model of software development outsourcing where companies delegate their software development projects to companies or teams of software engineers in nearby countries with similar time zones and cultural similarities. This model allows companies to expand their access to development teams in nearby countries while maintaining their ability to share the day’s work with their team.

Nearshore software development is a cooperation model between a customer and an organization, which means nearshore services are a cooperation product between client and provider, where the client can be as involved as they wish, due to limited time differences and easy access. The nearshore development model is a perfect fit for companies worried about significant geographical differences, but who are looking for cost-reduction without sacrificing work quality.

What are the benefits of nearshore outsourcing?

Nearshore outsourcing is increasing in popularity due to its advantages compared with other outsourcing strategies. The opportunity for cooperation and collaboration is one of the most attracting qualities of nearshore software development. It is this proximity that allows nearshore service providers to guarantee their clients a quality assurance plan and dedicated development teams, as well as on-budget solutions.

Qualified Talent

Nearshore outsourcing allows companies to tap into a larger pool of skilled and experienced software developers who may not be available or affordable in their home country.

Cost Reductions

Nearshore software development allows companies to get the talent they need at a price they can afford. Selecting a nearshore service provider, can also help reduce hiring costs, as companies still have access to top candidates, but are not focused on the recruitment process.

Time Zone Similarities

Nearshore outsourcing allows for streamlined workflows due to time zone similarities, which leads to better communication and collaboration.

Cultural Similarities

Nearshore outsourcing provides better and frequent communication due to similar culture, mindset, and language.

What are the best countries for nearshore services?

When choosing a nearshore destination, companies should consider factors such as the availability of qualified talent, cost-effectiveness, cultural similarities, and time zone similarities, among others.

In light of these aspects, there are several countries that are considered the best for nearshore services, depending on location. In Latin America, popular nearshore destinations include Costa Rica, Brazil, Colombia, Argentina, Mexico, Uruguay, the Dominican Republic, Chile, Ecuador, and Panama – these countries offer access to a skilled workforce, cost savings, and cultural similarities, among other advantages.

In Europe, nearshore in Poland is considered a great option for software development due to its recognized IT sector and a wide range of services, as well as Portugal. Both countries are highly proficient in English, having a percentage of 30% to 50% population fluent in English in Poland and of 25% to 40% in Portugal.

Both of these countries are members of the EU, which means they represent a valuable opportunity of access to the EU market, as both countries have a business-friendly environment, especially when it comes to IT companies.

Nearshore in Portugal poses as a great advantage due to its favorable business environment, with lower labor costs and a more flexible labor market. Additionally, the country’s proximity to Western Europe makes it a convenient option for companies looking to outsource software development service while maintaining a close relationship with their outsourcing partner.

On the other hand, nearshore in Poland is procured due to the highly skilled and educated workforce, with a focus on technical education. This expertise translates to a higher level of technical skill in software development, making it an ideal location for complex projects that require a high degree of technical proficiency.

What are the most important aspects in a nearshore development team?

Overall, there is no one way to answer this question, it depends on the needs of each project and company. However, when assembling a nearshore development team, is customary to look for agility, scalability, cultural alignment, being that the deciding factor is usually related to quality assurance and budget.

When building a nearshore development team, it is important to consider factors such as close proximity or sharing similar time zones with the parent company, which allows for better communication and collaboration.

Additionally, companies should consider the availability of qualified talent, cost-effectiveness, cultural similarities, and time zone similarities when selecting a nearshore development partner.

Finally, nearshore development allows companies to expand their access to development teams in nearby countries while maintaining their ability to share the day’s work with their team.  The most important aspects of a nearshore development team include dedicated teams, IT staff augmentation, and software outsourcing.

Pedro Reganha, Tech Lead at Prime Nearshore, talks about his team, the client’s goal and how they were able to assemble a software development team that fit their client’s specific needs: “For this company it was very important to focus on the people rather than the specific locations where they were from or their culture, so we started selecting the correct people. Right now, we are all in Lisbon, but it could have been that it was the other way around and we were scattered around the world. We are now six people, all from different nationalities, but all working under the same roof, building the best that we can.” This experience attests to the flexibility of our group’s nearshore providers to adapt to the client’s needs and realities, in order to ensure the best solutions for each project.

Why is nearshore software development becoming popular?

Nearshore software development is becoming increasingly popular in today’s market, offering businesses cost-effective and convenient solutions for software development outsourcing.

Choosing the right nearshore software development partner is crucial to the success of your project, and businesses must consider factors such as location, language, technical expertise, and project management skills when selecting a partner. While challenges exist, nearshore software development offers several benefits that can help businesses optimize their operations and improve their customer experiences.

Key-takeaways

Nearshore software development is a booming approach to outsourcing, allowing companies to delegate software development projects to nearby countries with similar time zones and cultural similarities.

Nearshore outsourcing provides a larger pool of qualified talent, cost savings, streamlined workflows, and better communication due to similar culture, mindset, and language.

The most attractive qualities of nearshore outsourcing are proximity, quality assurance plan, dedicated development teams, and on-budget solutions.

When choosing a nearshore destination, companies should consider factors such as the availability of qualified talent, cost-effectiveness, cultural similarities, and time zone similarities.

The most important aspects of a nearshore development team include close proximity or sharing similar time zones, availability of qualified talent, cost-effectiveness, cultural similarities, and dedicated teams, IT staff augmentation, and software outsourcing.

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