Nearshore outsourcing benefits include lower costs, faster action, and closer access to top talent. Nearshore outsourcing can help companies get work done quickly and efficiently and save on travel costs. Nearshore partners are usually within an hour’s flying time of most international locations.

It ends up being a win-win situation for everyone, enhancing collaboration on both sides and making communication easier and more pleasant. Make sure that your nearshoring partner is flexible in this regard and will be able to easily scale your team up and down on demand. It makes sense to discuss how long it takes on average to increase or reduce the team by a certain number of specialists, so you have a full picture of whether the agency can meet your scaling requirements. It is crucial to understand how the legal side of cooperation is ensured. You need to check how your IP is secured from a legal point of view, and what commitments and obligations the provider undertakes from a legal perspective. In a nutshell, a comparison between different outsourcing options would look as follows.

What is offshore software development?

All new developers then receive training on data protection and security, as well as industry and client-specific training as needed. Unlike most of our competitors, we provide employee training, good working hours, interesting software development projects, profit sharing, and equity ownership. Without these incentives in place hiring from a software factory will likely lead to a lot of turnover and retraining and become less cost-effective over time. Once we understand the concept of nearshore software development, the next question is what differentiates nearshoring from other engagement models. In this blog post, we are going to take a deep dive into nearshore software development. We’ll look at what nearshoring is and what separates it from other engagement models.

The worldwide tech talent shortage has recently become a major problem and it is becoming rather difficult to hire a skilled team. The three types of software outsourcing are Onshore, Offshore, and Nearshore. According to the YouGov report, 48% of companies outsourced offshore and predicted a total market value of $620 billion by 2032. The founders admit that cooperation with Ukrainian developers was flawless and that they faced no difficulties establishing their team. Having the same goals with the developers they were hiring was a positive sign, and it created a special team feeling. Software development market statistics of the tech countries — Poland, Ukraine, Romania, Czech Republic, Hungary, Bulgaria, Belarus, and Croatia.

• Alternatively, you might directly solicit input from software development agency clients to better understand the benefits and drawbacks of outsourcing.
• Company in order to find developers faster and more cost-effectively.
• Regardless of whether you opt for onshoring, nearshoring, or offshoring, outsourcing as a whole has proven to be a highly efficient cooperation model.
• Many companies choose this model because it is cost-effective, poses minimum risks, and solves the problem of talent shortage in the contractor’s own company.
• That’s why software development companies prefer to use one or two of the same type.
• But today, we will focus on nearshore outsourcing and its advantages.

Offshore software outsourcing is when you hire a vendor in a distant country to handle development, typically used with countries in Asia, such as China, or India. Better communication, in turn, leads to more effective management and better overall project outcomes. MagicFuse is a product development and consulting company, focused on the technical side of Salesforce. IT recruitment agency connecting best tech talents with businesses around the world. TechMagic is a software and web development company that builds dedicated teams skilled in JavaScript, Node.js, Angular, React, AWS, Serverless, and Salesforce.

As you see, there’s no right or wrong answer to which model is better, all of them suit different circumstances and different needs. Regardless of whether you opt for onshoring, nearshoring, or offshoring, outsourcing as a whole has proven to be a highly efficient cooperation model. In a modern global market, there’s little difference between whether your developers sit by your side at the office or do the same job from another country or continent. Offshoring is the cooperation model that comes to most people’s minds when they talk about outsourcing. In this scenario, the project is being delegated to the vendor in a faraway country, maybe even another continent, in an entirely different time zone.

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These differences might include attitudes towards responsibilities and authority that might be surprising to you and cause a conflict. Since TurnKey is based in Silicon Valley, you never have alternatives to nearshore software development outsourcing to worry about contacting someone and getting an answer the same day . This way, you can get a response and immediate assistance when you have an issue or question that needs resolving.

This can be beneficial in a few ways, such as better communication and stronger culture due to a common language, and minimized time zone differences. However, onshoring does come with some potential drawbacks in cost and geographical restrictions. For instance, if a company is headquartered in Sweden and decides to opt for a nearshore software development team, it will search for a supplier in Estonia, Lithuania, Ukraine, etc.

There is a good chance you may find a Laker fan or Dallas Cowboy lover working on your development team. The main problem recruiters face when hiring skilled developers is that there just aren’t enough of them. A good developer is hard to find, and you just have to imagine how hard it must be to hire an entire team. Developed countries have a sizable demand-supply mismatch in this area, and it’s not to say that there are too few good developers in the US, it’s just that demand is much higher than in other countries. Nearshoring is exactly what it sounds like – outsourcing your project nearshore, to the countries nearby. A typical example of nearshoring would be a US company outsourcing its project to a vendor from Mexico or Canada.

Proximity and time zone

You need to start by looking for a company that understands your language well. Any issue in communication can lead to late projects, additional costs, and the development of an inferior program. Remember to talk to representatives of the companies you are considering and evaluate how well they can understand your requirements.

If you decided to go ahead with nearshore developers, thoroughly analyze your desired product and understand what software programming languages and frameworks are needed to develop it. If you are looking for a highly-experienced and qualified nearshore engineers, create a list of demands and crucial details to pass on to the nearshore software center. They will then manage to provide you with a list of suitable candidates. Another distinction between nearshoring and offshoring is the cultural differences between the client company and the outsourcing company. When offshoring, the two companies are regions or even continents apart.

Experienced Teams

All of those elements will show you whether a project is likely to be delivered according to your standards. Regardless, all CTOs and Project Managers who consider offshoring will need to create a checklist in order to make the right choice of external company. Those elements, when well-analyzed, increase the chances of a successful cooperation with the external team.

The financial services industry, specifically the banking sector, would benefit from developers who have more extensive knowledge of building secure applications and have a strong understanding of NIST. Great nearshore developers have outstanding recruiting teams that not only can scour the market for great talent but also can interview candidates technically. In fact, many nearshore development firms will market their ability to hire only the top 1-2% of the market but neglect to highlight their ability to retain such talent.

FAQ about Nearshore Outsourcing

For example, if North American companies start working with Polish teams then they have to make some accommodation for the different time zones. However, there is still enough overlap of working hours to enable a collaboration and to set up meetings. External teams usually adjust to the clients’ work time without it being a problem for them. Any challenges the teams face may be smoothly addressed thanks to effective communication. Let us show you a few tips on how it may support the remote software development process. Successful offshoring will be the result of a thorough analysis before choosing a service provider.

Choose to offshore if:

Thus, it is critical to thoroughly analyze your business case to make sure nearshoring fits it well. We combine decades of experience, tried-and-proven delivery processes, and deep tech expertise to deliver superior services worldwide. Despite that, Nearshore developers still provide substantial savings compared to Onshore options. Dedicated Nearshore development teams provide you with a turn-key, well-oiled, development machine. Nearshore outsourcing companies based in the US typically offer Errors and Omissions (E&O) Insurance, providing risk management systems that are not necessarily common in Latin America. This type of insurance provides you with both the protection you require and the peace of mind you need to focus on your project.

Cooperation with nearshore outsourcing businesses helps to solve this issue when nearby nations typically have similar legislation. Assume you live in France and wish to delegate certain work that cannot be done in-house to a team from another country. At the same time, you want to save money yet don’t want to deal with time-zone offsets.

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Eastern Europe accounts for around 1.3 million Eastern European software engineers and other tech experts, so customers can choose from a wide range of potential candidates to suit their needs. All these benefits enable customers to hand out the tasks, organize online meetings, and carry out processes necessary for effective team management and result generation. Nearshore outsourcing helps to optimize costs, save time, compensate for staff shortages, and improve the overall company efficiency, to name a few. Such a solution enables increased productivity because both your teams will work simultaneously when your in-house employees have their time off. As per fortune, 52% of small businesses will continue to outsource their non-core functions even in the post-pandemic economy. Costs and quality of engineers are the only significant factors that determine offshore development.

Working within the same time zone leads to a more stable and productive workforce and increased output. Moreover, travelling between locations is far easier in the nearshore model. But over recent years, some countries have become real leaders in delivering software.