Nearshore Software Development: Nuanced Guide
There is an increasing demand for nearshore software development from all corners of the world. But what exactly powers such an interest in partnering with these types of developers? We will lift the curtain and explore the intricacies and nuances of this topic, leaving no stone unturned.
The popularity of nearshoring software development in recent years is fairly easy to explain since the partnership offers a multiplicity of benefits, including the time zone and cultural similarities, no language barriers and much more. Clients are now more compelled to opt for seaside vendors than other kinds of options.
In this article, you will discover everything you need to know about software development for nearshore and how to facilitate such collaboration. On top of that, we will considerably go over the definition, advantages, trends and other details which are often overlooked within this subject matter. So let’s start from the basics.
What is nearshore software development?
Before we can dive deep into the exploration of every important nuance there is in regard to delegating the building of a project to a nearshore provider we first have to get on the same page about what this phenomenon means exactly.
In a nutshell, nearshore development refers to the practice of a client reaching out to a development company that is on the same continent as them or adjacent to their local country. For example, US-based corporations are typically turning to places in Latin America for nearshoring, European clients usually search for development providers in neighboring regions and so on.
A nearshore software development model has become a popular choice for a multitude of clients as it is considered a more cost-effective option without compromising on the cultural and ethical similarities as well as minimal ranges in time zones.
The ability to outsource software development services to engineers just as qualified as the local ones and receive advantages you won’t find in your own country made nearshoring worth at least a decent research. Which is why we are here to tell you all about nearshore software development outsourcing to help you paint a clearer picture of this model and maybe convince you of its efficacy enough to persuade you to participate in such a collaboration method.
Types of nearshore software programming
If you are considering applying to receive specific services from the nearshore provider then you have to be sure the type of service is going to be the right fit for your needs. Since agencies deliver a variety of offerings in software development your best guess is to analyze your requirements and see under which category your solution sits.
With the abundance of technical assistance from programmers we will focus on the six essential kinds of projects such vendors provide. Take a closer look at them to find out what exactly you need to have developed.
Custom nearshore software development
One of the predominant help this type of developer offers is bespoke nearshore software development services which can serve as an umbrella term to cover a lot of different kinds of solutions. The customization part, however, emphasizes the absolute control from the client’s side in terms of the development, i.e. specific features, functionality, design tailored to end users’ needs and so on.
Custom development expands opportunities to create software that is completely adherent to your unique desires and corresponds with your business goals. Unlike off-the-shelf solutions, a tailored approach allows for a competitive and distinct product on the market.
Web nearshoring development
Web development is as prevalent as ever and has been a necessary tool for businesses to get themselves out in the light to promote their brand visibility. With the proper nearshore software development team clients can apply for a website or web application creation according to the latest standards of optimization and efficiency.
This can include a responsive solution that operates equally well regardless of the device the user utilizes, search engine optimization, compelling user interface and user experience and many more benefits to get the business to the next level.
Mobile app development nearshoring
Mobile applications are everywhere these days with many businesses using this kind of development to increase their outreach to the target audience and make their offerings readily available. Apps are widespread in practically every industry, from simple gaming solutions to complex healthcare systems.
Ideally, you want to cooperate with nearshore developers that have extensive experience in your particular niche and profound expertise in the right technology stacks. Since you have several options of platforms to choose from you may opt for native or cross-platform mobile app development.
Maintenance and support
It won’t become a big issue to find nearshore providers who deliver ongoing maintenance and support services. Even if you did not go through the development with a specific team, many firms extent an offer to cooperate on a long-term basis of supporting your solution made by other providers.
Benefits of software maintenance & support.
On the other hand, upkeep with a nearshore team can be a great option if they developed your software in the first place as they would be aware of every intricacy and nuance of the code they have built themselves.
Enterprise resource planning (ERP) development
Unlike nearshore software development for startups the creation of a solution for an enterprise kind of business involves a lot of meticulous research and planning to, first of all, understand the current struggles of the corporation and find innovative ways to optimize processes and increase efficiency.
ERP development requires advanced knowledge of database operations and the production of software that can automate daily tasks. Otherwise, with a less experienced team you may run into more issues than you had at the beginning of your partnership.
Artificial intelligence (AI) nearshore development
Artificial intelligence is getting more traction by the day and we will touch on this topic in more detail later on. For now, what you should be made aware of is that software development nearshoring firms are rapidly expanding their service line to deliver innovative software with AI-powered tech that can put your project in a new plane.
AI to optimize nearshore development.
There is a multitude of benefits associated with incorporating artificial intelligence into solutions such as better analysis and predictions, generative code, risk management and other advantages.
How to calculate a budget for nearshore software outsourcing
When it comes to choosing this type of outsourcing there are a lot of obstacles in the way to truly determine just how much you can expect to spend on the development. Since we can’t accurately predict where you are located and which country you are going to choose to delegate the services, the estimations can only be very general.
The same point goes for the type of solution you are looking to create through software development nearshoring since the scope of work is another major cornerstone in terms of prices. Hence why we will tackle these details one at a time.
Let’s start with the type and the complexity of software you need to have developed because each kind is going to have a distinguished price tag. For example, custom software is generally one of the most expensive endeavors as it involves a lot of customization to your unique objectives and goals.
More basic software with foundational functionality is going to cost anywhere between $5,000 to $30,000. While a high-complexity solution with advanced features and security measures is going to go up in the cost of around $50,000 to $100,000.
As for the web and mobile applications the prices can be comparable with the same dependency on the scale and complexity you are needing from the final result. Specifically talking about mobile apps, the differences in price are likely to arise based on the kind of platform the solution is being built for within nearshore development services.
For example, opting for native development which entails creating an application for either iOS or Android operating systems is going to be cheaper compared to cross-platform development where the same source code is used to craft applications regardless of the OS. However, if you choose to opt for native building for each type of platform, you can expect to pay for two separate applications which will drive up the price substantially.
The most major discrepancy within the average price is represented within enterprise development, where the starting costs for software can be as high as $80,000 and end anywhere from $300,000 and more.
Keeping these numbers in mind, we can take a look at some of the average hourly fees from software development outsourcing nearshore vendors around the world. We are going to talk more explicitly about the trending destinations for clients on a couple of continents but generalize it for the sake of keeping it short for now.
The table below takes into account average prices for an hour of the work of developers.
| Region | Average costs per hour |
| North America | $70-$90 |
| Latin America | $40-$60 |
| Western Europe | $60-$80 |
| Eastern Europe | $50-$70 |
| Asia Pacific | $30-$60 |
Looking at the hours a nearshore developer has to spend creating your software from the ground up you can add up the hours of work (considering the complexity of the project) with the costs and get an approximate cost to start preparing your budget.
What you do need to need is to keep a realistic expectation in regard to the price of services and the timeframes for the production of your software not to get knocked down with the feather when you hear a quote from the vendor.
Key regions of software development for nearshore
Looking at nearshoring from a bird’s eye view you can notice that a plethora of countries are considered cut above the rest in terms of their popularity as a destination giving their expertise and proven track record. But as you already might have guessed the key regions clients turn to are varied depending on the initial location of the client themselves.
So in order to make this part of the article as sufficient as it can possibly be, we will divide the leading destinations for outsourcing regional countries into the perspectives of US-based businesses as well as European ones.
1. Nearshore outsourcing for clients in the US
Nearshore software development for custom software is not news to clients located in the United States, and over the recent years, we have seen a clear pattern of where they hire out the talent. As it goes Latin America is the go-to spot for nearshoring; however, Canada is among the leading places clients look into for specialists so let’s start with it.
Canada makes a compelling candidate for outsourcing the workforce because it is very similar culturally to the US, speaking the same language which eliminates a lot of barriers as well as minimal changes in regard to the time zones. Still, the charges Canadian companies put up front can generally be comparable to the US companies which means the benefits of cost-effectiveness are not as prevalent.
Mexico is one of the fastest-growing IT hubs across the globe and it makes sense why American clients are turning their attention to this country. Their IT outsourcing market is projected to reach a compound annual growth rate (CAGR) of 8.61% by 2029, with the city of Guadalajara being named as Mexico’s Silicon Valley.
Brazil is another fast-runner to the top of nearshore development options since their educational resources are as high as ever, leading to more advanced development vendors rising to the occasion. While the talent pool may not be as vast as in other countries (though this is rapidly changing), the minimal time zone differences and affordable prices encourage US clients to partner up.
Nearshore outsourcing for clients in Europe
Since a large potion of countries in Europe are considered great destinations for outsourcing development experts, clients from this continent have a myriad of options to choose from. However, taking into account that price benefits are one of the most appealing advantages of nearshoring, we will discuss locations with that perspective in mind.
Ukraine is by far the most popular nearshore software outsourcing area within the European region since the high standards of education allowed them to accumulate over 1,600 admiringly skilled software firms with many new talents graduating to enter the scene at this moment. With 1 in 5 Fortune 500 companies using Ukrainian development organizations, the trust level is clear as day.
Poland is the second most chosen destination for outsourcing in Europe, considering its favorable location nearly at the center of the continent which entails fewer losses in time compatibility. With reasonable pricings and a large net of experienced and competent development providers the popularity is evidently well deserved.
Czech Republic is a great option in terms of choosing a nearshore software development company that has an EU membership, high education level, general proficiency in the English language and competitive prices as opposed to more Western regions. Being closer to the center of the continent, the efficacy of time zones and cultural understanding make the country among the top options.
These destinations only scratch the surface of the potential partners for each mainland and represent the leading and widely used nearshore places.
Tendencies in nearshore software engineering
Just like in any industry, the ever shifting digital landscape pushes technical professionals to expand their horizons and keep a hand on the pulse of the current demands of the consumers. And nearshoring is not an exception to this rule with some of the prominent trends rising to the top, forcing developers to stay on the right track.
We put together five of the most popular trends in this niche s you can understand what kind of changes are happening on the market and whether any of these advancements can become a priority for you when seeking the right nearshore software developer partner.
- Integrations with artificial intelligence.
AI and machine learning (ML) technologies have been around for a long time even if most of us didn’t pay attention to their presence. Nowadays, AI is more often implemented into the software development life cycle and communication strategies to enable a more efficient process that is not slowed down by human error.
Artificial intelligence can be implemented in nearshore software development for web apps and other solutions in areas like test automation and error prediction. There are many more use cases for this kind of technology and you should definitely discuss it with your provider.
- Advancement of low code/no code development.
While customization is still a major priority for some clients, the benefits that low code or no code platforms allow for the progress of production are no joke. Such tools let developers increase the speed of development by a mile by minimizing the amount of code that needs to be written manually.
Usually, it offers pre-built or drag-and-drop options that can be used continuously even after deployment which understandably can lower the cost of creating a solution within software development nearshore significantly.
- Focus on cybersecurity.
Cyber attacks are becoming more prevalent each year with any kind of person falling victim to it, no matter if it is a corporate company or a regular user. This puts extra pressure on nearshore specialists to put in advanced security measures in place and protect the system from data breaches.
Vulnerabilities within the code are not uncommon which leads developers to upgrading their skills and focusing on secure coding practices as well as putting safeguards in place. These can include multi-factor authentication, access control, encryption methods, strict intrusion prevention methods and so forth.
- Demand for sustainable work practices.
Any nearshore software development company is now put on the line to promote and foster work practices that promote sustainability and set a positive role model within the market to nurture actual change. Simple practices such as paperless documentation and switching to completely digitized records are the bare minimum demanded by the clients now.
Financial initiatives to the organizations protecting the well being of our environment are also reported as crucial values clients appreciate from the providers so it is definitely a virtuous trend to keep in mind.
- Improved knowledge of regional compliances.
The creation of any software solution is always marked by a strict adherence to the local regulations of the client to avoid breaking the laws or getting into lawsuits. In fact, it is one of the primary concerns with nearshore software development teams that they can overlook or misinterpret regional compliances and get the client into murky waters with the project.
This is why many outsourcing companies are expanding their qualifications and knowledge of the regulations around the continent to provide 100% secure and compliant solutions.
The difference between nearshoring software development vs farshoring
While both of the methods are related to the practice of outsourcing services to a company from a different country, the discrepancies between nearshoring and offshoring are much more prevalent than similarities. This is further evident by the sheer naming of the two types of approaches to delegating the creation of the project.
One common parallel between nearshore software developers and farshore ones is that both have a prominent potential of delivering your software with a great deal of competency and a level of satisfaction. While each country differs in its approach to educating specialists, there is nothing stopping the technical engineers from increasing their qualifications and being among the best.
With these resemblances out of the way, the choice of which method to pick comes down to a large number of factors, each of these influencing the course of the development of your solution. So, let’s take a closer look at the contrasts in the comprehensive table below.
| Distinctions | Nearshore development | Farshore development |
| Time zones | Opting for a nearshore firm can still possess some discrepancies in the time zones, but they are going to be significantly lower, in the range of 1-3 hours at most within a continent. | Farshore, as implied by the name, entails finding a partner from a distant location from the client. This can ultimately increase time zones to 8-12 hours if the provider is on the other side of the globe |
| Cost-effectiveness | Software development nearshore might decrease the costs by either a small or significant margin depending on the country of choice. For example, a German client choosing a Ukrainian provider is going to notice a sizable difference in cost yet not in the enormous margins. | Selecting a company from a far place across the world may yield opportunities to decrease the project budget substantially as some of the regions are known for affordable prices. For instance, a US-based client opting for an Indonesian vendor can save on the fees almost double the charge. |
| Work environment | A nearshore solution can enable the client to travel to the destination themselves and oversee the progress if they wish. It undoubtedly makes communication with the team members more efficient as opposed to being locked into online meetings only during nearshore software programming. | While the opportunity to travel to the agency’s country is still on the table, it becomes much more challenging and unsustainable. Communication can also present a set of cons as the internet connection and differences in working hours may hinder progress. |
| Cultural alignment | Countries that are regionally closer to the client’s area are more likely to be culturally similar yet not without differences. However, these are unlikely to put the client between a rock and a hard place, especially considering the likelihood of the languages being comparable. | The farther you go to outsource the development, the more cultural challenges you are likely to encounter as places on the other side of the globe differ greatly in terms of customs and work ethics. While English is considered to be a universal language, some barriers to understanding can still be prevalent. |
| Talent pool access | Being constricted by only a few selections of the countries for nearshoring, the opportunity to catch the best fish in the sea can be decreased. In other words, no matter where the client is continentally, they are confined to the choices within their immediate region which may not always be represented as an extensive IT hub. | Unlike nearshore software development teams, farshoring allows the client to search through an endless selection of the best providers in the whole world and find the truly most extraordinary company for their business needs. Such an option does not restrict the employer to a smaller number of options; instead it enables them to be extremely picky. |
By looking through all of the aforementioned unique points allocated to each option, you can make a fully informed decision of whether nearshore software development services suit your business objectives the best or whether other choices on the table are possibly more equipped for the production of the project.
How to find nearshore software developers
If by this point you are convinced that opting for a nearshore specialist is the right way to go for your business then the next natural question arises as to where you should look for the experts. Obviously, it has to be noted that the location you are residing in and the place you want to outsource from are going to influence your search process.
Still, we want to equip you with the general guidelines to help you find and choose a team for highly qualified nearshoring software development. Consider taking the advice below on how you need to configure your research and hiring process.
Going in blind is not going to do you any favors and will only make the finding process more difficult than it needs to be. Take into consideration every requirement you are having for your project, write down every feature you want to be implemented, get a general idea of your design and so on.
When your idea for a solution is cohesive, any nearshore software programmer will have an easier time understanding your vision and seeing if they are capable of delivering on the promises. It is also helpful to have your documentation at hand when continuing with the other stages.
There is a plethora of online resources where some of the best providers are waiting to be called and invited onto a project. A quick online search will reveal where these vendors reside with most of the platforms allowing for a detailed filtering system to make sure you get as specific as you want.
It is a good idea to bookmark or somehow remember the companies or freelancers you are inclined to partner with the most and keep the list at hand for the next phases of your research.
Getting down to the bottom of the skills and qualifications of the developers is one of the most important activities as it will definitively tell you if the vendor is truly cut for the job. What you want to focus on is finding case studies within the portfolio with related projects that resemble your solution.
Looking at how they approached solving problems and what the final solution looked like is going to tell you a lot about the provider’s dexterities. On top of that, you can scoop around for potential accreditations in regard to software development nearshore to see if their competencies have properly certified.
The reputation that a vendor has built for itself so far is among the clearest representations of their skills and trustworthiness. On the same or other independent review outlets you are capable of checking what former clients and business partners have to say about their experience of collaboration which can shed light on the hidden nuances that affect the partnership.
In addition, you should be looking for any awards and accolades accumulated by the company from independent entities as of now to start building trust in terms of the services being recognized as a major achievement.
After you have completed everything above and have a short list of the top candidates you need to move forward with the interviews. This is where you can get specific about services, like “Do they provide nearshore software development for desktop apps?” or terms of cooperation such as timelines, budget needs, contractual concerns and more.
When you find the firm that suits your objectives and requirements the most and you have finished your search process, extend them an offer for a partnership and get your project up and running.
In conclusion
The efficacy that nearshore software development brings to the table is undeniably the reason as to why it has become a widely sought after choice for clients that want to build their projects as optimally as possible. With the outsourcing market not showing any signs of slowing down it can be a great time to learn all about this particular topic.
In our guide, we explored the definition, process, key benefits, budget concerns and many other topics that revolve around this type of collaboration model. With this information now available to you it won’t be an issue to make an informed decision of whether to opt for nearshore software development outsourcing and if it fits your needs the most.
