factors to consider when choosing a nearshore software development company

When it comes to outsourcing, companies tend to go towards an Offshore destination. Offshoring provides a lot of advantages in terms of unlimited options of consulting firms, the vast talent pool in a variety of technologies, and lower costs. However, the concept of Nearshoring has come up strong. Let us look at the aspects of how Nearshore outsourcing helps compared to Offshore.

What is Nearshore software development?

Nearshore software development is a process by which software development work is assigned to a company that is very close to the home country that the customer is in.

The advantages of nearshoring are as follows:

  • Cost reduction: The costs of a Nearshore software development is usually much cheaper than it is compared to the work you do in your home country
  • Having ample overlap time to work with the nearshore vendor compared to the offshore vendor.
  • Facilitating face-to-face meetings with the nearshore vendors because of the proximity.
  • Lack of internal expertise (particularly in assessing technical competence) for IT roles makes it difficult to recruit internal employees.
  • Technology is changing rapidly, which means that you need to have people who are skilled in the current project you would like to accomplish. You may not have all the skills and hence you choose to outsource.
  • IT capacity requirements vary over time and internal teams cannot scale up and down with demand cycles comfortably.

When should a company choose Nearshoring Compared to Offshoring :

Nearshoring is very useful to you if you are looking to augment your existing in-house teams with another team that can work agile. Needless to say, the communication aspect is very important. Communication happens seamlessly when the time difference between the two locations is less. So, the work timings can sync up. Nearshoring may also be useful if constant face-to-face meetings are required while the project is going on. So, a nearshore location will be advantageous. Language and cultural compatibility will be another scoring point on why an organization should prefer a Nearshore location company over an Offshore location company.

Choosing the company to develop the outsourcing software that offers the best value and performance can be difficult. Nearshore software development teams offer the best combination of experience, collaboration, and value for your budget. However, not all software development companies in the area are created equal.

When choosing a Nearshore software development team, consider the following factors.

How to choose a Nearshore development company

1. Do they have a presence in your home country:

Nearshore software development company

The major problem faced while executing offshore projects will be the time zone. The popular offshore destinations such as India and China are almost 10 to 12 hours from that of North America and 5 to 6 hours from the European countries. This leads to limited overlap between the two teams when they work. The advantage to you from a nearshore vendor would be the limited time difference. You will be able to work with them in the same time zones for many hours. This is specifically useful when your methodology is agile. The added advantage is that the nearshore company has a presence in your home country. This facilitates lots of face-to-face interaction.

2. Experience in the industry:

Apart from just knowing software development technology, you also want a team that understands the needs of the industry. Real understanding can only come from industry experience. For this reason, it is helpful to choose a company that has worked in your industry and has solved similar problems. When you look at their employees, you want to look at people with years of experience. Experienced and novice management offering up-to-date training and ideas have an advantage.

3. Communication process:

When outsourcing, you want to be able to communicate easily with the project team. With a good software development company, you can talk directly to the team that completes your project. It is fair that you are considering a company that is good in technology. However, you will need to speak with the team that is working on your projects. It could cause a breakdown in communication if you are unable to do so. The different working hours also make communication difficult. When it comes to communication, time is money. So you want a software team that you can reach out to easily.

4. Language proficiency and work timings

Time overlap and language proficiency - Nearshore development

You will have to evaluate if the teams have language proficiency. If that is one of the main reasons why are you choosing a nearshore location? You will be giving up on the cost arbitrage of an offshore location since your team members may not have the language proficiency of the offshore location people. So, it is important that you test that out. You will also have to get a commitment on the work timings of the nearshore team so that you will get a good idea of the overlap time of work between the two teams.

5. Can they scale:

You will have to work with an organization that has the ability to scale. You will need transparency in terms of the work done by the developers. Lack of that will lead to you not having visibility. The teams may be given multiple projects and they may not have the focus and the required time to be able to complete the tasks on time. So, it is always good to select a vendor that can scale.

6. Daily work practice:

There are several strategic factors to consider from the start to ensure that your partners are productive with your team. To what extent have their developers integrated with you? Will developers be analytical and solution-focused and not just deliver what is asked of them, regardless of the consequences? How many hours the nearshore team will spend on your project? Could your team wait a day to discuss the problem? If you're opting for an offshore programmer, an 8 to 12-hour time difference means you're likely to experience these long breaks regularly. Considering these factors beforehand can be important in getting your project on time and within budget.

7. Costs for Nearshore software development:

Cost of project in Nearshore Software Development

Simply put, when you are outsourcing the right way, you need to get the best service at the right price. Many consultants and contractors offer high daily rates without offering full value. The right partners have the structure, expertise, and knowledge to achieve the results you want and can do so at a lower price due to their cost base. Spending less on software development also frees up your budget, so you can get quality software services without compromising on important projects or other aspects of your business.

8. Company Culture:

The outsourcing company culture is important because it has a direct impact on employee longevity and the quality of customer service. Finding an up-to-date partner with a strong culture and who can find a way to stand out from other IT companies can be the difference between success and failure.

9. Scalable Infrastructure

Culture, Work timings, and costs are important factors. However, good communication infrastructure is also important. The nearby locations to the major countries need not necessarily have a good infrastructure. The lack of infrastructure may cause breakdowns at work because of slow connections, loss of data, etc. Since the location is in another country, infrastructure is also a very important factor to choose the location.


There are lots of things to watch out for in outsourcing software development, and there will always be a risk. Whether you are undertaking your project to nearshore, onshore, or offshore company, it is important to maintain a strategic vision, a clear plan of action, adequate research, and open channels of communication.

While technical skills are important, you should take all of these factors into account when choosing a Nearshore software development company to get great software results and performance.



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