What Is Nearshore Software Development?

If you’re looking to scale your software development efforts while keeping costs in check, nearshore software development might be the solution you need. This outsourcing strategy has become one of the most popular alternatives for companies trying to save money on IT solutions. In fact, the global outsourcing market was valued at $92.5 billion, with a significant portion being nearshore services according to Statista. At Folder IT, we specialize in nearshore technology solutions that can strike the right balance between top-notch results and affordability. That’s why, in this article, we’ll go over the ins and outs of nearshore development, its advantages, and how it compares to offshore and onshore options. If you’re curious about how nearshoring can benefit your business, keep reading to understand what nearshore software development really entails!

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What Makes Nearshore Software Development Unique in The Industry

Nearshoring in the software industry refers to the practice of outsourcing software development tasks to agencies & freelancers in nearby countries, often within the same region or time zone. This approach offers several advantages over other outsourcing models, thanks to the way it provides the best of both worlds: time zone alignment for a lower price. Compared to onshoring (hiring developers within your headquarters location or country) the costs are almost half, while the quality, cultural compatibility, time zone alignment, and language skills are virtually identical. Now, as far as offshoring (outsourcing software development solutions to companies in other faraway locations) goes, nearshore outsourcing provides a similar service that might cost a little extra but comes without the known complications of working with offshore teams. There are a few key benefits to all nearshoring software operations, so let’s cover these next so you can better understand why hiring nearshore developers can be the most convenient choice for you. 

6 Key Benefits of Nearshore Software Development

1. Proximity and Time Zone:

If you’re a North American business, LATAM will not only be close to your location but also operate in a similar time zone. On average, most countries in the Latin America region only are a couple of hours apart from the EST schedule, ranging from complete time zone alignment to being two or three hours apart depending on the season. This facilitates real-time communication and collaboration, making it easier to coordinate standups with your outsourced development team and leading to faster project delivery and improved outcomes.

2. Cost-Effectiveness: 

Nearshore development can help reduce costs compared to onshore development while still providing high-quality services. This cost-effectiveness is due to lower labor costs in some nearshore locations, as well as reduced overhead costs associated with managing remote teams and affordable travel expenses. However, you should keep in mind that while nearshore outsourcing is generally more cost-effective than onshore options, prices can vary significantly between countries so it’s best to do nation-specific research before you dive into the recruitment process.

3. Cultural Compatibility:

Latin America is a region with a similar culture to North American work traditions. Even though the language and cultures are naturally different, LATAN’s work ethics significantly align with US business practices. In fact, many North American companies have nearshore development hubs in countries from the region, including Disney, PwC, and JPMorgan. This is thanks to the way Latin American developers can adapt to working with a North American team in a blink, and are experienced in working remotely while still delivering top-notch results. This cultural compatibility can help avoid misunderstandings and promote smoother collaboration with your team, and it’s a detail that shouldn’t be overlooked considering the number of offshore locations that don’t enjoy the same benefit.

4. Staff Flexibility: 

Nearshore outsourcing allows your company to not only hire software developers as external contractors – saving money on development costs – but also gives you the flexibility to scale or downsize your team as needed. When you hire nearshore developers, there’s no need to make them work a full-time schedule or bring them as in-house members of the team. On the contrary, an outsourced development team can easily be put on the bench for a while or made more efficient by adding a few more professionals depending on your unique business needs. Such staff flexibility gives your company the power to adapt to any changing circumstances while ensuring consistent results.  

5. Language Proficiency: 

One of the most convenient things about Latin America is that this is a region where English is widely spoken. So much so that many LATAM countries rank high in the international EF EPI Index for English proficiency, covering 113 countries every year and tracking their progressive growth or decline in their language skills. Latin America has consistently seen improvements, but even in regions where the average English proficiency level is low, the developers that export their service to US companies mostly have solid proficiency levels. This will facilitate communication with your nearshore team and minimize language barriers during both onboarding and the hiring process.

6. A Large, Affordable Talent Pool:

Another advantage of nearshoring is access to a diverse talent pool, allowing you to pick and choose what kind of IT experts you need without being bound by country of residency or proximity to your headquarters. Many countries in Latin America, such as Mexico, Brazil, and Colombia, have become popular nearshore destinations due to their large and skilled workforce, and Latin America as a whole is expected to reach a market size of $41.5 billion in IT services, showcasing the region’s growing prominence in the tech industry.

Overall, nearshoring offers a strategic approach to software development, allowing businesses to leverage the benefits of outsourcing while minimizing potential drawbacks and avoiding the common pitfalls of offshoring. By partnering with a nearshore development team, you can easily access top talent, streamline communications, improve staff flexibility, and reduce IT costs, leading to more successful software projects and reliable results.

How to Find a Reliable Nearshore Software Development Partner 

Whether you want to hire nearshore developers or just access more affordable IT solutions, partnering with a trusted nearshoring agency will probably be the most efficient way for you to get started, Here;’s how you can ensure the nearshore outsourcing company you work with is not only legit but also has your best interests in mind:

Check Their Records

When looking for a reliable software development partner, you should always start by researching companies that have a proven track record in delivering high-quality projects. This is a great way to get started while keeping your options as open as possible. Look for testimonials and case studies that demonstrate their expertise and ability to meet deadlines, these should ideally be somewhere on the web for you to find and ensure they’re real.

Analyze Their Expertise

Consider the company’s experience in your industry and with the technologies you plan to use. Will they really be able to understand your vision? A company that has worked on similar projects is more likely to comprehend your needs and deliver the desired results with a greater level of efficiency.

Look For Reviews

This one might seem like a given, but always check the company’s reputation online. Look for reviews on websites like Clutch, Glassdoor, Reddit, and Google. Once you’re sure it’s them, pay attention to both positive and negative comments to get a balanced view of their strengths and weaknesses.

Cross-reference To The Moon

Ask for references from past clients to better understand what their work dynamic is, what their English eve is like, and how committed they are to client satisfaction. Contact these references to get their feedback on working with them and then try to ask about their experience, the quality of the work delivered, and the company’s communication and project management skills.

Test Their Technical Skills

Evaluate the company’s technical expertise, both on the page and during the interview rounds. As a first step, do look for certifications, awards, and partnerships with North American technology providers. This can give you confidence in their ability to handle complex projects. However, you’ll still need to test their technical expertise in real time, and that’s what the interviews are for. Take the time to ask the right questions, pose real-life coding scenarios, and share your project details to ensure a good fit. 

Ready To Access Nearshore Technology Solutions?

Opting for nearshore software development solutions can greatly benefit your business, as well as set your company up for the future of remote/distributed work. We hope this article was successful in giving you a first approach to this outsourcing strategy, and we want to remind you that at Folder IT we do offer nearshoring services for various kinds of project needs. From IT staff augmentation to nearshore custom development, our technology solutions can make your life much easier. If you’re ready to access nearshore IT services, get in touch today to schedule a free discovery call!

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