What is nearshore software development?

Recent stats show that hiring a developer in Germany will cost a company an average of 86.000€ a year, while a developer from Eastern Europe will be paid around 40.000 – 45.000€ a year, tax included. This means that an Eastern European IT company saves half the costs related to an in-house team compared to a Western European company, which allows them to offer low-cost software development outsourcing while ensuring high-quality results. 

Nearshore software development is becoming more and more popular among companies looking to develop custom mobile apps or progressive web apps without having to sacrifice their budget. But let’s see what advantages nearshore development brings to the table and how you can find out if this is the right cooperation model for your business:

What is nearshore software development?

Nearshore software development is a B2B collaboration model that allows companies to delegate their development projects to a third-party software service provider in nearby countries. While reducing development costs is usually the most important factor when choosing to outsource, most companies want to nearshore to locations with a large talent pool that will ensure a high-quality result, with high English proficiency software engineers that can provide seamless communication with the internal team, ideally in real-time thanks to the small timezone difference (1 to 4 time zones).

This model of outsourcing enables businesses to access cost-effective software development solutions with minimal risks since the culture and language of the nearshore software provider are often similar, making the collaboration more convenient and easy to manage.

The difference between nearshore, onshore and offshore development

Remote collaboration is usually based on three models: onshore, offshore, and nearshore. While onshoring means hiring a provider that is in the same country as you, offshoring implies selecting a provider that is located far away from your headquarters. Nearshore outsourcing is the best of both worlds because it refers to hiring a service provider that is closer to your company’s location (usually up to 4 time zones), which means you can benefit from reduced costs for software development services while not having to worry about the time zone differences or the cultural barriers.

Advantages of the nearshore software development

If you are looking to outsource software development, you might be wondering what option is the best for you: nearshore or offshore outsourcing. Here are some of the nearshore outsourcing benefits that will help you decide if this collaboration model is for you:

1. Cost-effective

Hiring an in-house team of developers can generate huge costs, as you not only have to think about the salary, but you also have to take into account the time you spend finding, interviewing, and making all the necessary formalities for hiring someone.

And while offshoring software development is by far the cheapest way to develop a mobile app, this option comes with more challenges for your internal team than nearshoring – thus this option is the perfect balance between an in-house team and an offshore partner.

2. Access to experienced development teams

Nearshore development comes with an amazing advantage: gaining access to highly specialized programming engineers who have loads of experience with web and mobile development, ready to provide services based on your specific goals and needs. Compared to when hiring an in-house team, you will not be limited to your local talent pool, which means you will have access to a diverse portfolio of developers who specialize in various programming languages and can easily adapt to your requirements.

3. Time Zone Advantages

Being in a similar time zone is one of the most appreciated benefits of nearshore software development, as your partner will be available pretty much during the same work hours as your in-house team, allowing for real-time communication. Western European companies that outsource to Eastern European countries such as Romania, Ukraine, or Poland will benefit from a minimal time difference (1-2 hours usually), allowing their project manager to better keep track of the completed and pending tasks.

Some companies may also find geographical proximity an advantage, as in case of any problems that require a physical presence visiting the outsourcing partner comes with low travel time and costs.

4. Cultural affinity

Even though a nearshore team will be outside the borders of your country when thinking about countries that you can reach by a 3-4 hour flight, we are sure you can find lots of cultural similarities, that usually also reflect on the way they approach work: from their values, the processes they follow or the way of thinking. It’s demonstrated that cultural affinity increases project agility.

The Cons Of Nearshore Software Development

The biggest drawback of nearshore software development? The fact that it cannot compete with offshoring prices. Although it will for sure be cheaper than onshore outsourcing or hiring an in-house team of developers, a nearshoring setup will definitely be more expensive than hiring an offshoring service provider. 

Nearshore software development has many benefits that enable companies to get the desired results without having to sacrifice their IT budget or having to put pressure on their internal team, as they can easily hand out tasks, organize online meetings and track the progress without facing communication barriers or having to work extra hours – thanks to the cultural similarities and to the small time-zone differences. If you’re looking for a nearshore development partner in Europe, our dedicated team will gladly help you achieve high-quality mobile and web development results – let’s get in touch.