Organizations in a highly contested global market constantly strive to lower or maintain their costs to stay competitive. As automation, cloud computing, and artificial intelligence take centre stage in 2023, enterprises are constantly planning for digital transformations worldwide.
The International Data Corporation discovered in its 2023 research that nearly 90% of global organizations are prioritizing investments in digital tools to augment physical spaces and assets with digital experiences by 2023. Gartner predicts significant investment in software development, with growth expected to increase from 8.8% in 2022 to 12.3% in 2023. Global enterprises are increasing their investment in outsourcing solutions, with managed service budgets expected to increase from 15% in 2020 to 18% in 2023.
Nearshore software development is increasingly becoming a popular managed service for SMEs & large enterprises to innovate their offerings. Today we look at nearshore outsourcing, how it benefits organizations, what to look for in a professional nearshore provider, and where the best companies reside.
What Is Nearshore Software Development
Nearshore software development means delegating or outsourcing custom software development services to a provider located in a nearby country than your own, preferably within a one to three-hour time zone difference. Professionals define nearshore outsourcing as:
“… The process of delegating some tasks — particularly software development and business processes — to companies in neighbouring countries to get better control over operational expenditures. This can provide cultural proximity, a convenient l location and the same or similar language.”
How Nearshore Outsourcing Benefits Your Enterprise?
Nearshore software development has gained immense traction among enterprises over the last five years, allowing them to focus on operations, build products quicker and significantly reduce costs.
Cost Effective Development
Cost-effectiveness is the most obvious of all nearshore development benefits. Enterprises can easily save on recruitment, salaries, hardware & software, employee benefits, office space rentals, and other costs related to hosting developers in-house.
In their 2022 I.T. outsourcing survey, Deloitte discovered that almost 60% of U.S. businesses outsource software development due to lower development costs in South America & Central Europe. A previous article on software development costs discusses the considerable cost difference between North American, Asia, South American, and European developers.
Since nearshore development companies reside closer, communication tends to be more accessible, timely, and faster. This means there is less miscommunication which can lead to costly redevelopment and error fixing. So, countries with a lower cost of living are ideal for serving as nearshore development centres—famous examples include Mexico, Chile, Argentina, Uruguay, and Venezuela.
Communication & Collaboration
Communication & team collaboration is paramount to the software development process. Communicating the wrong requirements and collaborating with the wrong team members can be severely costly for organizations. Lapses in communication can result not just in redevelopment costs but can also cause substantial financial liabilities if the solution is in use.
Using English as the shared common language enables organizations to monitor & control the development process. Since developers are located nearby, they can collaborate during work hours and express their ideas & concerns easily during meetings.
Several professionals have discussed that the cultural alignment between North America and South America is decisive when planning to nearshore outsource development. Nearshore software development providers are generally accustomed to the unique work cultures, work ethics, and best practices of organizations in the home country. This familiarity ensures highly collaborative relationships and effective communication between the partners.
Experience & Talent
Researchers have forecasted that by 2024 there will be over 27 million developers worldwide. The U.S. hosts 4.5 million (est.) of these professionals thanks to multiple progress-driven tech hubs located across the country; however, the cost of hiring them is another story.
Europe remains one of the most popular destinations for outsourcing software development, with almost 6.5 million devs in the region. Western Europe is considered the big-budget option, and Eastern Europe is the moderately priced nearshore hub.
This abundance of skilled developers allows organizations to choose from a vast pool of experienced personnel. Therefore, nearshore outsourcing enables enterprises to find developers with the ideal expertise, specialization, lingual skills, and required education.
For example, Progatix is based in four different regions with a fantastic team of front-end, back-end, and full-stack developers, with experience and expertise exclusive to those countries. Our developers are hosted in our own offices, come fully equipped with relevant hardware & software, and are remunerated by Progatix.
Rapid Development for Faster Time to Market
Releasing new products and updates is of the essence in today’s hyper-competitive marketplace. Nearshore development allows businesses to enact rapid development while focusing on the business side of projects.
Attributed to their geographical proximity and similar time zones, nearshore providers can deliver rapid software development. With faster communication and swift collaboration, enterprises can release products & updates faster, harnessing competitive advantage.
Nearshore software development teams can also provide faster support than offshore providers, reducing delays and improving the overall efficiency of businesses. This rapid development & instant support enables enterprises to adapt to quickly evolving market dynamics.
Faster development with nearshore partners also allows organizations to scale effectively and at the right time. Bolstered by quick turnaround times, lower costs, and no fundamental requirements for training, product development can be easily scaled up when circumstances demand it.
One of the most essential aspects of nearshore providers is their versatile service delivery models. For instance, Progatix facilitates organizations with three unique service delivery models that enhance development pace: the full-service model, nearshore staff augmentation, and short-term outsourcing.
Similarities in Culture & Work Ethics
Professionals worldwide discuss that cultural similarities can be very influential when choosing a nearshore partner. Some compare it to having a colleague who shares an interest in tea or coffee; others exemplify it using the same tools & technologies.
Cultural similarities can lead to substantial benefits, for example, improved communication & constant collaboration. Nearshore development facilitates businesses by working with teams with good English language skills and a work culture that better reflects organizations in the U.S. Enterprises can communicate project objectives efficiently and collaborate confidently since the nearshore team is located within convenient time zones.
An essential aspect of uniformity in culture & work ethics is that the software is exclusively developed for the end user. Since the nearshore team is acquainted with local audiences, they can create appealing designs, preferred functionality, and end-user-focused features.
Which Features To Look for in a Nearshore Software Development Partner?
Now that we know the essential benefits of partnering with a nearshore development company for software, it is vital to highlight the core features that determine an excellent nearshore outsourcing provider.
English proficiency is essential for effectively communicating project goals and changes to developers. Partnering with nearshore development teams with adequate English language skills is also essential to develop effective collaboration daily. Therefore, enterprises should evaluate the language proficiency of different providers before hiring one.
Determining the technical expertise of a nearshore development partner is critical to the quality of code and the cost of the project. Evaluating the various coding languages & infrastructures, database, security, project & database management skills is significant in deciding whether the nearshore provider is ideal for the organization.
Most providers publish their tech stacks and expertise on websites, so it’s a great place to start that research. A more straightforward way is to drop an email or have a live chat conversation with their team.
Work Experience & Reviews
Hiring a nearshore development company with vast & credible experience is crucial to building high-quality software. Providers with a decorated history of outsourcing services and a decent portfolio should be the ideal target.
A great way to evaluate the experience of a nearshore development partner is by going through customer reviews on review websites and social media platforms and feedback from prior customers.
All-Inclusive Development Services
An all-inclusive nearshore development company generally offers a complete mix of services, including development, design, project management, consultancy, testing, and support services. Choosing an end-to-end service partner can significantly benefit organizations in terms of cost, time to market, and software quality.
Having a complete team is both cost-effective and time-saving. When compared to hiring a project manager, a development team, a designer, a testing professional and I.T. support engineers individually, an all-inclusive provider will already have these resources in place.
Location & Time Zone
The location of your nearshore partner is just as necessary as language proficiency and technical expertise. Hire a provider in another continent, and there will be time, language, and culture issues. Hire one too close, for example, in Canada, and you will sometimes have a higher cost, a limited team, and limited expertise.
Ideally, your nearshore partner should be within a 2 to 4-hour proximity. Anything above the 4-hour window will not be viable for collaborating and communicating effectively throughout the day.
Size of the Team
The size of a nearshore team is significant for development timelines, project scalability, and having the necessary expertise at hand when needed. A smaller team will not only have limited experience and capabilities but also need help scaling with the changing dynamics of the project.
Why Progatix Is a Top Choice for Nearshore Software Development?
Progatix has been at the forefront of software development since 2003. Our solutions are already helping over 1000 SMEs and corporations worldwide to automate their operations, empower their workforce, improve cost efficiency, and enhance productivity.
Based On Three Continents
We are based on three continents: North America, Asia, and Europe. Organizations can visit our regional headquarters for in-person interactions or connect with our team through leading tools like Slack.
All-Inclusive Software Development & Consultancy Services
Progatix offers an all-inclusive suite of software development, digital consultancy, and enterprise I.T. management services. We have been privileged to work with a fantastic mix of small, medium and large-scale enterprises, solving their core business issues with digital technology. Visit our services page to learn more about our groundbreaking solutions and consultancy services.
An English-Proficient Team
Our team is well-versed in English, allowing us to deliver a superior nearshore development experience.
Expertise with Over 18 Development Languages, Infrastructures & Libraries
A Decorated Portfolio of Solutions Delivered
Our prestigious portfolio includes solutions ranging from websites, ecommerce portals, B2B & B2C mobile applications, enterprise software, progressive web applications, and A.I. & machine learning solutions. View our remarkable portfolio here.
A 100+ Team of Software Professionals
Progatix hosts a vast team of developers, testing experts, designers, digital marketers, digital consultants, and I.T. managers to assist with underlying business needs. Our development team includes phenomenally talented front-end, back-end, and full-stack developers. Dedicated project managers lead all development projects. Our team also includes expert DevOps & support engineers to assist organizations with diverse information technology needs.
Agile Project Management
We follow agile project management methodologies and ensure our teams are continuously trained with leading industry best practices & tools to enhance the development experience.
Choosing the right nearshore software development company to outsource enterprise-level software, mobile applications, and consultancy can be arduous. Organizations must carefully evaluate and research multiple options to determine software development providers’ linguistic capabilities, skills, experience & abilities.