Software development is on the rise, as more and more companies benefit from digital solutions. However, creating an in-house software development team is a great challenge, which can be quite costly. In an effort to cut costs, more and more companies go for software development offshoring. They delegate their software development requirements to teams from foreign locations. This enables such companies to cut down on expenses and tap into a broader talent pool. However, offshoring is associated with numerous challenges, such as linguistic barriers, dissimilarities in culture, and time zone differences. That’s when nearshoring comes into action as a solution. Keep on reading to know more about nearshoring and get a 2024 software development nearshoring guide.
What is Nearshoring?
To begin with, let’s shed some light on the very concept of nearshoring. In brief, it is a practice of outsourcing software development tasks to nearby countries or regions. The main difference between nearshoring and offshoring is in that the latter implies outsourcing to a team from a remote country. Nearshoring brings companies all benefits of offshore software development and also allows businesses to mitigate communication barriers, time zone differences, and cultural differences. As a result, it proves to be one of the most popular solutions among digitized businesses in 2024.
The Main Advantages of Nearshoring in 2024
In recent years, nearshoring has become increasingly popular. And 2024 marks a new peak in nearshoring, as reports show that interest in software development nearshoring grew 99% over the past year compared to the year before. What specific benefits make nearshoring so attractive for digitized businesses in 2024? Let’s take a look at some of the most critical nearshoring benefits in 2024.
Nearshoring can be more cost-effective than hiring a local development team because you can rely on a team from a country with lower rates. You will also cut the expenses of costly travels to remote offshoring countries. Actually, the ability to cut costs is the primary benefit making companies go for software development nearshoring in 2024.
Sometimes, local markets have a very limited pool of talent. Meanwhile, nearshoring allows digitized businesses to increase this talent pool. This point is especially relevant to companies from countries that have a slowly-developing IT market. It doesn’t necessarily go about underdeveloped regions of states. Some rich and developed countries, such as Switzerland, are just used to offshoring or nearshoring. As a result, they don’t put much effort into developing their own talent pools.
Cultural similarities are one more important benefit of nearshoring. When both the customer and the outsourced development team are culturally similar, their cooperation “flows” much more efficiently. They understand each other better and, often, have fewer issues with understanding each other’s language. As communication is the key to productivity and understanding, cultural similarities become a common reason for software development nearshoring in 2024.
Time zone compatibility
Time zone differences are often the most significant problem in offshore software development. This often leads to misunderstandings and calls that are inconvenient to one or both parties. Nearshoring to a team from a comparable time zone can benefit businesses. This allows both the customer and the vendor to work during identical business hours. The main benefits of such an approach are improved communication and collaboration.
Top Countries for Software Development Nearshoring in 2024
While many states provide top-quality software development nearshoring services, there are still market leaders. Based on our experience, we have developed a list of the most popular countries that provide nearshore developers. So, when it comes to nearshoring in 2024, the top destinations are:
- Costa Rica
How to Find a Perfect Partner for Software Development Nearshoring in 2024?
Now, let’s proceed with some practical tips that will help you leverage nearshoring the right way. These are our top tips that will help you find a nearshoring software development team to reach incredible heights with. Our list of tips includes the following suggestions:
- Check out for a nearshoring location that fits you the most.
- Research the nearshoring market for the most suitable destinations and service offers.
- Prepare a quality tech interview that will help you understand the level of your potential nearshore software development team.
- Review the industry experience of your chosen vendors.
- Pay attention to informal communication to understand your partners’ communication skills and cultural fit.
- Review pricing models, anticipate the expenses, and determine whether a partner fits your budget.
- Determine the communication strategy that fits both you and your vendors.
Choose a Perfect Cooperation Model for Software Development 2024
There are different engagement models that are very popular when it comes to software development nearshoring in 2024. So, the most popular cooperation models include:
- Time and material, when you pay for time and resources spent by your vendor.
- Fixed price, a model that requires you to pay a predetermined fee for services you receive.
- Managed product model, when you get a complete product with a fixed price, schedule, and transparency during each stage of the software development lifecycle.
- Virtual team engagement, a model where you hire an entire team that is paid according to specifically negotiated rates.
- Team extension, when you extend your team with skilled professionals paid according to specifically negotiated rates.
So, these were the most important tips that will help you leverage software development nearshoring in 2024. If leveraged properly, this approach to software development will help you achieve heights in the most cost-efficient way. The key point is to understand the main advantages of such a practice, choose the best country for software development nearshoring in 2024, the best engagement model, and follow our tips. And if you want expert help with embracing nearshoring, contact Nearshorefriends. We certainly know the business and will help you get a full package of benefits!