Companies often explore foreign solutions when they decide to outsource the development of parts of their application or projects. This practice is known as offshoring. Offshoring has advantages, but it can also have disadvantages. In recent years, nearshoring has become an increasingly popular alternative to offshoring as it offers most of the benefits of outsourcing without many drawbacks.
To fully understand whether nearshoring is right for your software development team, it’s important to first understand what it is, how it works, and what the benefits and challenges are.
What is nearshore software development?
Nearshore software development is a model where companies delegate their software development projects to companies in nearby countries with lower labor costs. It allows companies to outsource their software development projects to teams within a few time zones.
This provides greater flexibility, responsiveness and improved communication, making all the difference in project success. By choosing nearshoring over other outsourcing models, you gain faster turnaround times and greater control over the quality of your project without sacrificing price.
Nearshoring also allows companies to communicate closely with outsourced employees. This type of working relationship also provides a more effortless transfer of knowledge and ideas between two teams that work together on a daily basis, resulting in better efficiency at every level.
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Advantages of nearshore development
There are several advantages of nearshore software development. They include reduced communication barriers, better cost effectiveness, improved software quality and increased development speed.
Reduced communication barriers
Communication barriers between people of different cultures make outsourcing complicated, but nearshoring brings you closer to your developers, so you don’t have to worry about communication problems. Better communication, in turn, leads to more effective management and better overall project outcomes.
The main reason companies choose nearshoring over onshore software development is cost-effectiveness: nearshoring is usually significantly cheaper than outsourcing to companies in the same country.
Ultimately, nearshore software development can save tens of thousands of dollars on a single project or hundreds of thousands on a continuous basis. This can be critical for startups with limited resources or companies looking to reduce overheads without sacrificing quality.
When working with outsourced teams, a common complaint is that communication gaps lead to poor quality work being delivered by substandard developers. Nearshoring inherently eliminates much of this confusion and miscommunication, increasing the chances of meeting your software development needs the first time around.
Time zones play a big role in determining lead times for projects with outsourced teams. Even though some countries offer 24/7 support, there will always be some delay due to distance and cultural differences. Working with a nearshored team means fewer delays and increased productivity.
Challenges of nearshore development
Despite the benefits of nearshoring, there are some drawbacks worth noting before outsourcing development to the nearshore team.
Verify Skills and Competencies
Finding a reliable partner to carry out your development tasks is difficult, especially if you are working with someone in another country. Even if you’ve done your research and found a team that seems capable of handling your work, it can be difficult to verify their level of expertise or experience.
More expensive than offshore
While nearshoring significantly reduces your labor costs, it is more expensive than offshore development. For example, you will save money if you outsource to India, where wages are lower than in western countries. But if you choose a nearby location, such as Mexico, where wages are higher, your savings will be less.
Nearshoring limits your pool of potential partners by definition. Since geographic proximity is most important when deciding whether or not to go nearshoring, it can be frustrating to be short of options. You may also find yourself hiring high-quality developers in other parts of the world that meet your unique requirement.
Some Cultural Differences
Although you and your nearshore development partner speak a shared language, it is important to keep in mind that you are likely to encounter some cultural differences. In addition, if your business practices are not aligned with your partner’s, you may not be able to completely avoid misunderstandings and miscommunications.
Read more: What are the main risks of software development outsourcing?
How to choose a nearshore development provider?
Choosing a top-notch nearshore software development team can be a daunting task with many factors at play. Below are some tips to help you find the right team for your project.
- Specify your software requirements: Before starting a project, make a list of everything you need from your software and make sure it is clear to everyone involved.
- Hire a company with a proven track record: A company with years of experience will likely be able to deliver high-quality work more easily than a company without much experience.
- Ask for previous customers: If possible, ask for references about their experiences working with a specific company – this will give you insight into how well (or poorly) they perform on projects and whether they can meet deadlines.
- Look for companies that know how to prioritize tasks: When you first start with a new team, communication is key. The last thing you want is tasks to be overlooked because your developers aren’t sure which ones need more attention.
- Choose companies based on expertise: While costs should always be considered when looking for a new developer, you should be prepared to pay for the kind of expertise your software development project requires.
- Find a team that works quickly but efficiently: Not only do you want your team to work quickly but also efficiently, otherwise you may end up paying more than necessary for extra hours worked.
- Be prepared for revisions: Software is never perfect at launch; it takes time to reach its full potential. So expect some revisions along the way to make improvements and eliminate bugs.
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