What Is Nearshore Development and When to Use It

Is the sky-high cost of software development hindering your business growth? If you're searching for ways to build high-quality custom solutions without breaking the bank, nearshore software development might be the answer. This outsourcing model offers a compelling middle ground between domestic development and distant offshore teams.

Whether you’re building an enterprise solution or a consumer app, selecting a development team is one of the most important decisions you’ll make in the process. For many projects, nearshore software development is the right approach. In this guide, we’ll explore the benefits and potential challenges of nearshore development and take a look at a few best practices to land on the right nearshore team for your project. 

What is Nearshore Software Development

Nearshore software development is an outsourcing model in which companies partner with software development teams in geographically close countries, often within the same or similar time zones. 

There’s a reason that, in the past couple of years, 80 percent of American companies have considered nearshore development. Compared to alternatives, the nearshore method offers several key advantages. 

Benefits of Nearshore Software Development

Cost Savings

Talent shortages and high demand in some countries, including the U.S., can render onshore development too expensive. At the same time, offshore development often poses quality concerns. Nearshore development can be both cost-effective and high-quality, making it an ideal option for budget-conscious companies.

Time Zone Alignment

When your development team is too many hours ahead or behind, collaboration can be exceedingly difficult. Nearshore software development closes this gap. Being in the same or similar time zones means faster communication, streamlined project management, and real-time collaboration.

Cultural Similarities

The further away your development team is, the more likely you are to experience cultural differences. Finding common ground on project standards like communication, time, and subject matter is often easier with a smaller cultural (and geographic) gap. The nearshore model facilitates easier collaboration thanks in part to a shared cultural understanding. This is particularly true when you’re working with providers in North and South America. 

Access to Skilled Talent 

You don’t have to stay in the United States to find a great development team. Many nearshore regions are home to an abundance of qualified developers. Latin America, in particular, offers access to skilled and reliable talent.

Proximity and Travel

For some goals, nothing replaces face-to-face collaboration. Having a nearshore development team can make it easier to meet up for site visits or team-building exercises as needed. Similar time zones minimize the hassle of travel and bring in-person meetings within reach.

Factors to Consider When Selecting a Nearshore Development Partner

Simply landing on the right development model for you is not a guarantee of success. If you decide that nearshore vs. offshore development or onshore development is right for your company, keep these key considerations in mind.

• Technical expertise and experience in your industry - Familiarity with your specific field reduces startup time and delays due to unforeseen issues.
• Communication skills and language proficiency - Look for a team with a shared language, usually English, to minimize communication hiccups.
• Established development methodologies and processes - A clear way of working offers confidence about the quality and pace of development.
• Portfolio and track record of successful projects - Find a team with a history of happy clients, ideally with projects similar to yours. 

Be sure that the nearshore software development company you choose has not one but all of the qualities listed above. 

Potential Challenges with Nearshore Development Partners

No team is perfect 100 percent of the time. Teams are, after all, made up of humans. While you can’t anticipate every challenge you might encounter, be prepared for these possible nearshore software development hurdles.

Cultural Differences

While you can expect more cultural similarities with nearshore vs. offshore development, you’ll still encounter some differences, too. Notions of time and standard work schedules are just a few areas where your nearshore teams and their domestic counterparts might not see eye to eye. 

Luckily, these differences don’t need to doom your project if you anticipate them. You can get ahead of cultural conflicts by clearly defining expectations before development begins. Regular dialogue and feedback along the way also help. When you identify clashes early, you can address them before they have a significant impact on your project.

Intellectual Property Protection

Before you agree to partner with a development vendor, consider how you will protect your intellectual property (IP). In particular, think through the access your team will have to patents, copyrights, trade secrets, or any other company IP. Your data in the hands of bad actors can wreak havoc. At a minimum, stolen intellectual property can dampen innovation at your company or jeopardize your competitive position. 

Protections do exist. Strong contracts, including a non-disclosure agreement (NDA), must become part of your standard operating procedures. Also, don’t be afraid to ask a nearshore software development company about the safeguards it has in place to protect your IP. Reputable partners will have established safety measures to ensure confidentiality, vet team members, and prevent and respond to unforeseen security breaches.

Minor Time Zone Discrepancies

Unless your nearshore development partner is located in the same time zone, you likely won’t be working an identical schedule. Even without a time difference, your start and end times might not align. So, before the project starts, set a flexible work schedule. Plus, have a plan of action in case an issue arises outside of working hours.

It might be helpful to define a few hours each workday when all team members are expected to be “online.” This arrangement will give everyone on the team a clear window of time for scheduling collaborative tasks or meetings. It can also speed up communication and help avoid lags in response time that delay your project.

Best Practices for Working with Nearshore Teams

Regardless of industry, these practices are critical to any nearshore software development project. To foster a team culture rooted in success, emphasize them early and often.

Clear Communication and Project Management Protocols

Perhaps more than any other factor, clear communication is a must for a smooth project. Establish at least one channel for team collaboration. With dozens of project management tools out there, it’s not hard to find an excellent option to facilitate this type of connection. 

Clear protocols also help to minimize issues. Every member of the team should understand his or her role as well as where, when, and how to get or share project resources. 

Plus, set project management norms from the get-go. For example, how will the development team request an extension if a portion of the project needs more time? And, how will team members receive important project information or data? These are just a few of the questions to iron out for success.

Regular Progress Updates and Reviews

Small issues have a good chance of staying small if they’re caught early. That’s why a regular cadence of check-ins and reviews is so important. Your project manager should set an expectation of how, when, and how often team members will offer updates. The right format will depend on your project and team. 

To balance ease and thoroughness, try scheduling a mix of brief and more detailed reviews. For example, weekly summaries might be all that’s necessary during some project phases, while periodic testing and QA can help to spot bugs and mistakes before they’re difficult to resolve.

Trust and Transparency

Successful collaboration of any kind—especially with remote development teams—requires trust. Of course, developing it requires time. Still, you can foster trust with your nearshore development team by following through on your promises, providing necessary resources promptly, and responding to requests with frankness and timeliness. Doing so will set the tone for your partnership. 

If project parameters change, work products need revision, or anything unexpected arises, be sure to communicate that to your development team as soon as you can. Respectful transparency like this demonstrates trust. Your openness will go a long way toward building a strong working relationship.

Successful Nearshore Partnerships

You don’t have to look far to find many examples of successful nearshore software development partnerships. Companies leverage the nearshore method for various development goals with great results. A few possible use cases for nearshore partnerships have included:

• Custom web and mobile app development
• Legacy system modernization
• Cloud migration and implementation

Whether you’re building something from the ground up or revamping an existing solution, finding the right outsourcing partner is key. Designli, for example, builds development teams in the Americas to offer our clients the benefit of working in the same or similar time zones.

We make every effort to staff projects and teams with nearshore developers, depending on what’s needed. This normally means assembling a dedicated development team to become like an internal software team. For such engagements, timezone differences can hurt communication.

In any case, forming an on-demand agile team yields terrific results. For example, hiring a dedicated development team from Designli gave National Trench Safety the freedom to address pressing software needs first—in this instance, overhauling their existing portal. Then, we moved on to other applications. Our long-term relationship allowed us to achieve digital transformation with a whole suite of custom enterprise applications: WorkZone, RADR, and JobBox.

To build WorkZone, the dedicated development team dismantled the inefficiencies in the legacy customer portal and replaced it with a comprehensive interface that connects directly into the company’s ERP. The result is a simple, engaging, and valuable piece of software that customers actually use. Next, the team tackled RADR, a software that helps users manage rental contracts with ease. The system replaced pen-and-paper processes with an intuitive digital workflow.

Finally, the team created a custom enterprise application called JobBox. This innovative mobile app makes managing Purchase Order Requests (PORs) simple and straightforward with a structured digital approval process and real-time updates. Designli’s partnership with National Trench Safety illustrates just a few ways a company might leverage the nearshore method for various development goals with great results.

Is Nearshore Software Development Right for Your Next Project

Nearshore development boasts many of the benefits of offshore and onshore development while minimizing the downsides of each. For companies seeking cost-effectiveness, quality, and ease of collaboration, nearshore software development offers an answer. Certainly, offshore and onshore development have their time and place, but nearshoring presents a balanced middle ground between the two. As with any methodology, nearshore outsourcing doesn’t guarantee success. Careful partner selection and proactive best practices will increase your chances of a smooth experience and excellent results.

Looking for a nearshore software development partner? Let us know. We’d love to tell you more about our process and approach to nearshoring.

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