Nearshore Software Outsourcing: What Is It and Why Does Your Company Need It?

Nearshore Software Outsourcing: What Is It and Why Does Your Company Need It?
The Siliconreview
24 July, 2020

Software development is in high demand for companies of all industries and sizes in today’s digital and technological landscape. Developing custom software enables companies to create programs based on the specific needs of their users or the customization of existing programs. Both routes are incredibly beneficial for the everyday workings of all kinds of companies, not just those involved in the information technology industry.

However, most companies don’t have a full software development staff in the office nor do they have readily available access to the skilled individuals required to fully develop a new software product. Nearshore software outsourcing is an ideal solution for companies who need to build their own software products but simply don’t have the time or access to do so on their own.

What Exactly is Nearshore Software Outsourcing?

Nearshore outsourcing refers to the process of partnering with a third-party company in a neighboring country for a variety of reasons, including better use of operational resources and expenses. Some of the most well-known benefits of nearshore software development include cultural proximity, close time zones and location, and minimal language barriers.

Many companies choose to go with a nearshore company rather than an offshore company (or a company located in a foreign country where prices are lower). An example of nearshore outsourcing versus offshore would be an organization working in the United States hiring a development company in Argentina or Mexico rather than working with a company out of India. Partnering with a nearshore software development provider fills the needs of clients who want to outsource their software projects but want to avoid time differences and too much of a distance.

Why Choose a Nearshore Outsourcing Provider?

There are many ways that hiring a nearshore software development team can help organizations of all kinds, including:

  • Shared Time Zone - Many organizations encounter issues or face challenges when it comes to hiring a company on another continent or in another time zone. This can cause issues when it comes to timely communication and collaboration, and resolution of problems during development.
    Nearshore development teams work in the same or a similar time zone to that of the hiring company. This helps the in-house employees and outsourced team collaborate in real-time and work together in crucial meetings for the popular Agile and Scrum development methodologies. Meetings are easily put on the calendar with this type of outsourcing instead of scheduling them at odd times to make them work for both parties. The close proximity of the outsourcing team also makes it easy should the hiring company want to meet the team in-person.
  • Staff Augmentation - Hiring and retaining an in-house team of qualified software developers is as challenging as it is expensive. The process of searching for, recruiting, and hiring a single skilled developer may take months. If unique or niche skill sets are required for a certain development project, finding the right candidate may take even longer than that.
    Nearshore development companies alleviate these employment issues for companies by providing the experts needed for the projects at hand. In addition to specific skills, these companies also allow for scalability when it comes to team size. Should business slow down or there is a reduction in the number of development projects, the nearshore company is able to reduce the number of employees on the contract. On the flip side, adding additional team members to the outsourced team should there be more work or an expedited timeline is not normally a problem.
  • Lower Costs - One of the top reasons why organizations consider outsourcing their development needs in the first place is cost reduction. After all, salary is only part of the costs associated with keeping an in-house employee. There are many additional costly aspects of in-house employees. This includes health insurance costs, benefits, employment taxes, vacation time, as well as all of the necessary computer hardware and software required to do their jobs.
    Organizations know that they are paying one flat rate for their software development team when partnering with a nearshore development company. Many nearshore companies are located in countries where the cost of living may be lower than their usual rates, thus further lowering costs. 
  • Fewer Barriers Between Teams - Compared to offshore outsourcing, nearshore companies make the process of working with an outsourcing provider much easier. As communication underlines every successful outsourcing project, it’s important that hiring companies are able to communicate effectively and in real-time with the outsourced team.
    Nearshore companies make this simpler compared to offshore companies as they are typically a more similar culture and language with the hiring company. This makes communication more effective, which results in higher productivity levels and efficiency overall.

Partnering with a nearshore software outsourcing company offers organizations a variety of benefits, including overall cost reduction, better staff augmentation, and better communication than with an offshore company. Businesses and organizations looking to complete a software development project or expand their development abilities should consider a nearshore provider to meet their needs.