- Understanding the Nearshore Model
- The Key Elements of Nearshore Outsourcing
- Choosing a Nearshore Software Development Company
Understanding the Nearshore Model
What is nearshore software development? To address that, let’s note the primary difference of the most in-demand IT outsourcing models:
- Nearshoring: Refers to outsourcing to a geographically closer company in a different country. It allows moving operations to a more cost-effective location with fewer time zone differences and cultural gaps. A Western European company can outsource in Southeast Europe because of similar time zones and fewer cultural differences.
- Offshoring: Refers to a company outsourcing to a vendor in distant countries. These countries are usually several time zones away, have different economic conditions and may have significant cultural differences. Generally speaking, this model is the least costly option. Usually, it involves locations such as India and Asia, to name a few.
Outsourcing Model | Nearshoring | Offshoring |
---|---|---|
Location & Time Zone | Nearby – exact or similar time zones | Distant country – significant time zone difference |
Cost | A middle ground between offshore & onshore | Least expensive |
Cultural Difference | Minor | Substantial |
In addition, there’s also onshoring, which is outsourcing to a contractor in the same country. Often, this model is the most costly option and arguably the least flexible.
You can find plenty of coverage on the nuances between each one. In this overview, we’re most concerned with the nearshore development approach.
The Key Elements of Nearshore Outsourcing
To understand nearshoring further, we need to identify the parts that make it a preferred option. The demand for skilled talent and cost efficiency often drives such a choice. However, an underlying factor is the need for a genuine nearshoring partner.
From experience, we think this unique blend can create an environment where collaboration between both clients and talent thrives. So, let’s explore what these aspects entail and how they can contribute to your project requirements and success.
Geographical Proximity and Time Zone Alignment
One of the traits of nearshore software development is outsourcing to a nearby country. Naturally, this ensures that teams operate in similar or matching time zones.
We don’t have to remind you that a software development project demands high levels of coordination. Whether modernizing legacy applications, extending core functionalities, or crafting an MVP, the ability to sync up is invaluable.
Usually, product owners from the client’s side should work closely with the outsourced team. The opportunity lies in combining the strengths of in-house and outsourced talents to drive progress effectively. To that point, the location is crucial for quick decisions, and keeping projects on schedule and within scope.
The minimal time difference, combined with short flight distances, even allows in-person meetings when necessary.
To demonstrate clearly, we’ll use our case. As a provider, our teams operate in North Macedonia, and use CET (Central European Time). We’re a short flight away from Western European countries, and have no time difference with the following regions:
- Benelux (Belgium, Netherlands and Luxembourg)
- DACH (Germany, Austria and Switzerland)
- Scandinavia (Norway, Sweden and Finland)
The result? Ease of communication and no jet lag when meeting with your development partners.
Additionally, partnering with companies in geographically and legally familiar regions can simplify contracts and compliance, reducing potential risks.
Cultural Similarities and Communication
Effective communication and a cultural match are crucial in nearshore outsourcing. But speaking proficient enough English is only one part of the story. Another aspect is understanding each other’s work culture and business etiquette. Finding this common ground stimulates a more intuitive collaboration between teams, reducing problems often found in cross-cultural interactions.
Qualitative insights are not the only basis of this claim. A study by the University of Aberdeen on outsourcing highlighted recognising and managing cultural differences right from the start. Moreover, it showed that cultural differences, especially in service orientation, can affect the success of outsourcing relationships. Over 75% of respondents stressed the need to consider culture more carefully in future contracts.
In line with this, nearshore development companies should implement measures such as workshops and thorough onboarding processes. The preparation sets the stage for a successful partnership, leading to improved collaboration and project outcomes.
Find out more about Xessable’s approach on our expertise page.
Flexibility and Scale
Nearshore software development gives businesses the agility to adapt as their needs evolve. Such flexibility can be a game-changer for managing existing projects and scaling for future growth.
Additionally, the drive towards digital transformation across various sectors has escalated the demand for skills in software development. The trend, coupled with the findings from Deloitte’s 2022 global outsourcing survey, underscores the challenge of talent acquisition. With 50% of executives mentioning it as a limitation, the need for a broader, vetted talent pool is apparent.
We’re well aware that costs often dominate outsourcing discussions. Yet, nearshoring presents a balanced approach. Specifically, it’s not just a cutback move but a blend of quality and cost-effectiveness. As a model, it sidesteps the high costs associated with local recruitment and the uncertainties of offshore engagements.
That’s why we’ve taken the liberty to outline a few overlooked and emergent destinations for nearshore software development. Recent rankings from fDi Intelligence have spotlighted cities and regions that combine cost-effectiveness with a promising business environment. In the report, several attractive hubs appear, presenting an opportunity for businesses looking to scale efficiently and sustainably.
Source: fDi’s report on European Cities and Regions of the Future 2024
Choosing a Nearshore Software Development Company
Cutting through the noise and focusing on what truly matters is essential. That poses the question:
What should you as a business focus on most in making such a decision?
Transparency is paramount in this selection process. A company should set clear and realistic expectations from the outset. Be wary of providers that promise instantly available talent. Rushing can lead to a mismatch in skills and project goals, stressing the need for a careful selection and more than just capacity building.
At Xessable, we’re all about clear answers and straightforward solutions.
- Quality First: Fast solutions don’t always translate to great results. We prioritise finding the right team members for your project who can become an extension of your in-house team if needed.
- Honest Estimates: We’re transparent, and you won’t hear unrealistic promises from us. Specifically, we provide sensible timelines and estimates, focusing on delivering results.
- Partnership Over Transaction: We view each project as a partnership. Whether you’re a startup or a small enterprise looking to innovate, we adapt our services to support your growth.
- Team Stability: Our talent’s loyalty is our strength, with an average retention rate of three years. In return, you get a dedicated team that’s reliable and invested in your success.
- EU Compliance: With a presence in the Netherlands, we offer more than just nearshore software development services. We make dealing with EU compliance and contracts straightforward, removing a significant worry off your shoulders.
Agile Nearshore Development with Flexibility and Expertise
As a nearshore outsourcing company, we’ve refined our expertise by tackling projects across diverse sectors:
- Hospitality
- Cleaning
- Leisure
- Recycling
- E-commerce
- IoT and Industry 4.0
Our project portfolio is varied, demonstrating our ability to adapt:
- Web and mobile applications
- SaaS platforms
- Intranet solutions
At the core of our solutions is a robust technology toolkit including (but not limited to):
- .Net Technologies: .NET Framework, .NET Core, .Net X (X = latest version), Blazor
- Web Development: PHP (Symfony, Laravel), Python (Django)
- Client-Side Libraries/Frameworks: Vue.js, Angular, React, JavaScript, TypeScript, jQuery
- Mobile and Cross-platform: Android, iOS, Xamarin/.NET MAUI, Flutter, Node.js
- Cloud computing platforms: Microsoft Azure, Amazon Web Services, Google Cloud
- Methodologies: Agile, Scrum, Kanban, Scrumban, adapting to workflows that suit you.
We form teams of skilled professionals tailored to your needs, including:
- Software engineers
- QA engineers
- DevOps engineers
- UX/UI designers
- Other profiles, based on project requirements
Indeed, there’s no one-size-fits-all template for approaching such a decision. But a reasonable level of awareness and a conversation is a great place to start. That being the case, we invite you to book a free consultation. We’re open to exploring how we can bring your project to life and contribute to your success.