What is Nearshore Software Development? The Essential Guide


Companies are gradually embracing the benefits of nearshore software outsourcing to keep up with market demands and increase speed. Outsourcing has grown increasingly popular in recent times and has outpaced offshore software development. With globalization, remote teams are thriving, with software engineers working from countries within a similar time zone. The growth of nearshore software outsourcing has streamlined the lengthy recruitment process. Now, businesses can easily find the right tech talent that operates using an agile software development approach.

To understand how your company can leverage the various opportunities that nearshore software development offers, it's important to understand the meaning of nearshore software development, its benefits, and how it works.

What is Nearshore Software Development?

Nearshore software development is the partnership between a company and an outsourcing software development agency that operates within the same or a similar time zone to work on software projects and build digital products. For instance, a company in the United States can decide to work with an outsourcing company in Latin America to launch a product.

For most US companies, the cost of hiring in the software engineering industry has increased significantly, creating a dire need for cost efficiency and resource management. In fact, 69% of businesses outsource because of cost savings and at least 300,000 jobs in the US are outsourced each year. Many organizations have resorted to nearshore software outsourcing as the solution to the talent shortage of software engineers and many other technical roles. Companies like Tesla, IBM, Taco Bell, PlutoTV, Netflix, Johnson & Johnson, Google, and many other top companies use nearshore outsourcing for their projects and software needs.

The nearshore model is suitable for companies that prioritize having their teams work in the same time zone, with no cultural or geographical barriers. This is because the software development company will be closer, thereby increasing collaboration, communication, and outcomes. In comparison to the onshore model, which may appear more expensive, and the offshore model, which may differ greatly in time zone, nearshore software development is a better alternative. It allows companies to derive premium benefits similar to those achieved when working with talent in the company's own country.

The Benefits of Nearshore Software Development

The business world is rapidly changing with new technology trends like Artificial Intelligence (AI), machine learning, cloud computing, and many more. The most prominent question executives face is how they can stay ahead, keep pace with these constant changes, and maintain a competitive edge. Nearshoring is the ideal solution for these companies that want to keep thriving and building high-quality software solutions. Numerous companies choose the nearshore software outsourcing approach for these benefits and advantages:

Access to Highly Skilled Experts

One major benefit of the nearshore model is access to highly trained tech experts who have vast experience in specific fields. Many regions, like the US, have a shortage of tech talent and struggle to find the right fit for projects. This model bridges the gap and eliminates the lengthy recruitment process of finding, hiring, and managing these talents, thereby giving businesses more time to focus on core objectives. For example, Devsu has a team of 10k+ tech professionals across different fields who have experience working on complex software projects. Leveraging this expertise will not only save businesses time but also improve the quality of software delivery. In two weeks or less, you can find the right talent for your team.

In addition, your team will also gain fresh perspectives on how to approach roadblocks and issues in the software development process. Therefore, the dedicated team assigned to your project can offer a new viewpoint on how to improve the quality of your software products.

Geographical Proximity

As the name implies, nearshore outsourcing is often within close proximity to your company and is typically more advantageous than offshore outsourcing. It allows for real-time collaboration and communication since the outsourcing company is located in a nearby country. By working with nearshore outsourcing companies, you eliminate issues of time zone differences and unnecessary, expensive travel costs.

Cultural Fit & English Proficiency

Fluent and effective communication throughout the lifecycle of product development is very important. Nearshoring allows companies to access software engineers who are proficient in English language and are culturally fit. The US and Latin America share similar cultural environments, which enables successful nearshore outsourcing.

Nearshore outsourcing can produce quick results with no miscommunication, cultural or language barriers.

Cost Reduction

Unlike onshore, nearshore outsourcing is more affordable and cost-effective for companies that are trying to cut down on their budget without compromising quality. With nearshore outsourcing, you receive optimal quality at a lower cost while maintaining top-notch standards, because you don't bear the burden of providing software products like laptops or offering paid holidays and other full-time benefits. Depending on the complexity of your project, you can hire a software engineer for a short or long term, giving your company the flexibility to scale your team up or down on demand.

No hidden costs

When working with freelance software developers, there is a tendency for hidden charges to emerge, resulting in higher payments than initially budgeted. However, when you work with a nearshore company and hire a nearshore software development team, there is no concern of overcharging or fear of hidden costs because these are discussed at the beginning of the partnership.

How Does a Software Development Team Work?

Whether you're trying to launch your product to the market quickly, outsource your software development project, or find the right tech talent, the nearshore model can help your business achieve great results.

Nearshore development allows your team to function smoothly with efficient processes and workflow. When choosing nearshore outsourcing software development services, companies often opt for two models — Integrated Teams and Dedicated Teams. The chosen model will depend on the duration, type, and complexity of the project.

Integrated Teams

Integrated Teams occur when your company is looking to fill talent gaps on the development team. In this case, your software outsourcing partner will work closely with your in-house IT team to complete a project. Some people refer to this as nearshore staff augmentation, moreover, this is a way of using your nearshore partner for a long or short-term project.

Considering integrated teams can help speed up the development of your projects because you can easily find the right tech talent who can start working immediately without any hitch. This method gives you the opportunity to tap into various talents beyond the shores of the US and explore other expert tech professionals.

Dedicated Teams

A dedicated team is one where the development partners outsource a team of software developers to your client on a long-term basis. This method is similar to the role of an in-house development team. However, in this case, the dedicated team will be more consistent and can be scaled up or down as the project progresses. As stated earlier, with these methods, you bear no responsibility for providing administrative expenses, benefits, or software tools.

A typical dedicated team will consist of DevOps engineers, UX/UI designers, Quality Assurance (QA) specialists, business analysts, product managers, project managers, front and back-end developers, full-stack engineers, and mobile developers. This model is mostly suitable for companies working on long-term projects. It not only helps your company reduce the costs associated with hiring and firing but also ensures consistency throughout the project, facilitating quicker product releases. Top tech giants like IBM, Apple, and Amazon adopt the dedicated team model to better achieve successful results.

Also, startups can take advantage of a dedicated team to develop their Minimum Viable Product (MVP) faster and reduce employee costs. According to Clutch, in 2022 more than one in five businesses hired a nearshore outsourcing provider, and 90% planned to outsource their business projects to enable scalability and growth. Projects with vague requirements can benefit from having a dedicated team because it provides the right amount of time for the team to understand the project more thoroughly in the discovery stage, without wasting resources.

How To Choose The Right Software Development Team

There are essential elements to consider when selecting a software development team. Understanding that software projects can be long-term and would need continuous maintenance and occasional product updates; here are some criteria to look out for:

Define the Project Requirements & Objectives

The first step is to define your project requirements and objectives before contacting a custom software development company. Create a list of your project needs and identify the key roles needed to accomplish the project. At this stage, not everything needs to be defined, but a clear idea of what is to be built and timelines should be set to help each member of the team understand what is expected.

Develop the comprehensive steps for potential vendors, along with some non-negotiables. This will help adjust your list according to your business needs.

Research Software Development Companies

After identifying your project criteria and requirements, find the right software development company that aligns with your needs. To do this, use software development review companies like Clutch to review companies' testimonials, portfolios, and locations. Check details such as the project size, previous clients, industry focus, company size and structure, services, and more.

Review Portfolio and Domain Expertise

Focus on reviewing the software development company's portfolio, examining the customer reviews, and reading the case studies if available. Conducting this review will confirm if the company is the right fit for your business needs and will fulfill its role as a software development partner. It will also give you a comprehensive understanding of the types of projects the company has undertaken in the past and the results achieved from those projects. In addition to these, reviewing the level of experience the company has accumulated over the years will play a significant role in determining if they indeed possess the experience they claim to have.

Access Communication Style

When choosing a software development company, consider one with strong communication skills. Effective communication can greatly impact the success of a software project. Hence, a software outsourcing company with good communication skills will discuss and share insightful feedback and ideas throughout the development process.

Development teams should always be on the same page during the development cycle, therefore, ensuring that each team member has a high level of English comprehension and understanding enhance the project outcomes.

Select Development Partners

A development partner can be identified by observing their actions from the beginning of the discovery call to the completion of the project and beyond. A development partner will not act as an external agency but will ensure that they understand your business needs and deliver a high-quality software product. Partners will also align with your business needs, and understand your customers.

Development Methodology

Companies have achieved a higher success rate with agile methodology. Over 71% of companies in the US use the agile software development approach because it increases speed to market. Thus, before selecting an outsourcing company, consider the development methodology they use, whether agile or waterfall. This will give you an idea of how the development team works and what to expect during the development lifecycle.

Devsu, Your Software Development Partner

Devsu has over a decade of experience in custom software development for companies. As a nearshore software development company, our team of tech experts provides digital solutions for businesses using the agile software development method. By choosing Devsu as your software development partner, you gain access to a pool of 10k+ tech professionals and expert guidance. Get the best tech talent to work on your software projects. Contact us.


Subscribe to our Newsletter

Get the latest insights on technology right in your inbox