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Nearshore software development is the process of outsourcing software development projects to neighboring countries or locations that are in close proximity.
Interesting fact: 57% of international organizations with more than 2500 full-time employees outsource projects to nearshore development companies.
Ukraine, Romania, Poland and Belarus are the top nearshoring destinations for businesses located in Western and Northern Europe.
The United States, on the other hand, would be a great choice of nearshore software country for Mexico-based organizations.
Most nearshore development companies price their projects on hourly rates. The cost varies from agency to agency and usually, it depends on:
For nearshore services, you can approximately pay between $25 - $50 to companies based in Eastern Europe.
Indian nearshore software developers may seek rates starting as low as $15 per hour whereas the cost of US-based agencies ranges between $50 and $100.
The business process outsourcing services in the US market are projected to generate $135.5 billion in 2021.
This practice of nearshore outsourcing is becoming increasingly popular among businesses that seek software development services.
Its advantages go beyond time-zone compatibility and include:
While successful software development partnerships are primarily based on effective communication, a huge difference in time can cause various problems.
Unlike offshore teams, nearshore teams operate in the same or similar time zone which permits seamless interaction between internal and external teams.
This allows companies to be more frequently available for their clients, enables face-to-face meetings and solving issues in a timely manner.
Countries located on a shorter distance may also understand the language of their neighbors.
For instance, there are many bilingual software developers in the US that speak Spanish fluently. This allows them to serve clients from Mexico successfully.
Research shows that the biggest reason why companies outsource their business activities is cost saving.
On the one hand, working with a nearshore development company requires traveling on a shorter distance which allows the business to reduce travel costs.
On the other hand, similarly to offshoring, nearshoring can be often more cost-effective than hiring an in-house team or outsourcing a project to a home-based company.
However, the lower cost is not a result of decreased quality of products, but rather the lower cost of living that lets nearshore software companies seek cheaper prices.
Countries located in the same region often share different similarities in organizational culture, work ethics and values.
As a result, businesses can collaborate with a nearshore software development outsourcing partner more easily.
Fewer cultural differences empower internal and external teams to bond, develop emotional partnerships and facilitate better interaction.
For example, nearshore software firms operating in North America have a deep understanding of the culture, the politics and laws of South America which allows them to simplify and speed up the software development process.
To make sure you are investing your time and money in a partnership that works, consider the following factors:
Nearshore software development outsourcing is becoming increasingly popular among businesses and organizations because of:
Most of these companies charge per hour starting at $25 and going as high as $100, depending on the agency’s location, seniority and project complexity.
The suggested steps to selecting the best partner for your business are:
