As the use of technology has become an existential imperative, companies seek highly qualified technology specialists who can expand their business potential. This tendency led to the rise in the popularity of nearshoring in Europe. This continent is an attractive destination for IT nearshoring as it offers an excessive talent pool and a comfortable business environment. No wonder that according to Statista, the European IT outsourcing market will reach a volume of US$186.40bn by 2027, with an annual growth rate (CAGR 2022-2027) of 8.06%. In this article, we will discuss the advantages of IT nearshoring in Europe and how your organization can find the right software development vendor on this continent.
What Is Nearshore Software Development?
Reaching out to specialists from all over the world is an effective strategy for companies to keep up with the ever-changing business landscape. Yet, different concepts can be used to describe this phenomenon. As an umbrella term, outsourcing covers all types of cooperation between technology vendors and their customers. Meanwhile, nearshoring, offshoring, and onshoring define the process of outsourcing work to another country in terms of the proximity to the software development partner.
Nearshoring is the process of outsourcing work to a country that is geographically close to your own. The main driver for nearshoring is typically cost savings, as wages and other operating costs tend to be lower in neighboring countries than in the business’s home country. Meanwhile, offshoring is the process of outsourcing work to a country that is further away, typically on another continent. At the same time, onshoring occurs when a company brings work back to the home country. All of these collaboration forms encompass various types of services, from custom software development to cloud migration, and they highly rely upon specific project requirements.
What Are the Benefits of Nearshore Software Development in Europe?
Nearshoring in Europe is a proven strategy to save resources and guarantee the quality of the final product. In many cases, European countries have lower labor costs than other parts of the world. Additionally, companies using nearshoring software development services may be able to take advantage of local tax incentives. Besides, nearshoring to Europe allows companies to be closer to their target market. This proximity speeds up the product development cycle and enables companies to take advantage of local market trends and fluctuations.
When companies deploy nearshoring, communication and cultural barriers are often less visible, which can result in increased customer satisfaction and repeat business. Nearshoring also makes it possible for companies to stay more agile and swiftly scale up or down their staffing. In some cases, it can provide improved security since data and other sensitive information may not have to cross international borders. This characteristic is beneficial to companies that are subject to strict data privacy laws.
What Are the Top European Nearshoring Destinations?
Many factors make Europe a unique software development destination. One is the continent’s proximity to other major markets, such as the United States and Asia. Additionally, Europe has a long history of innovation in the technology sector. Assuming you are referring to the top nearshoring destinations for software development in Europe, the three countries that have recently gained a spotlight in the market are Ukraine, Poland, and Germany.
All three of these countries have a large number of highly skilled software developers and can offer flexible taxation to keep your project’s costs down. There is a vibrant business culture in these countries, making it easier to find the talent of the right fit for your expectations. Accessing a large pool of specialists in both Eastern and Western Europe, you can benefit from lower expenses and still maintain a high quality of the product. Yet, finding a technology partner, which can open up new areas of growth for your business, can be a tricky endeavor.
How Do You Choose the Right Nearshore Software Development Vendor?
Nearshoring can be a great way to outsource services and save resources in the long haul. However, there are a few things to keep in mind when nearshoring software development. By considering cost, location, time zone, and language, you can choose the most suitable vendor for your company. First, finding a reputable and experienced software development vendor that seamlessly meets the project’s needs is essential.
After reviewing a technology company’s portfolio and previous projects, you can critically assess whether it has the necessary expertise and skills to serve your purpose. Second, establishing transparent communication is key to the outcome of the collaboration. Pay attention to how your potential technology partner coordinates processes and handles challenges to ensure that your cooperation can stay fruitful in case of potential unpredictabilities.
IT nearshoring in Europe is a growing trend that is here to stay. With the benefits of lower costs, access to skilled labor, and improved communication, companies find that nearshoring is one of the most effective strategies to expand their operations and boost their competitive advantage. Nearshoring provides improved access to skilled labor and other resources, as well as a closer alignment with European business practices and culture. All these factors can lead to improved competitiveness and higher levels of customer satisfaction and can free some space for your company to reimagine its operations. As the trend grows, we can expect to see more companies choosing to nearshore their IT operations in Europe in the foreseeable future, making it an excellent option for organizations to strengthen their market positions.
Nearshorefriends unite IT specialists from all over the globe, assembling top-notch software development teams and making cutting-edge technologies accessible. We work with more than 120 experts and have development centers in Kyiv and Lisbon. Offering a transparent billing model, we deliver expertise that allows for new business insights to be discovered swiftly and effortlessly. Cast your mind into a brighter future with revolutionary technologies.
Interested in learning more about our nearshoring services? Don’t hesitate to contact us.