Nearshore development has become a key strategy for many mid-sized companies looking to grow without significantly increasing their operating costs. This approach involves outsourcing software development services in geographically close countries, which facilitates real-time communication and collaboration. Below, we will discuss how this strategy can be an effective solution for mid-sized companies looking to expand.
What is nearshore development?
Nearshore development refers to the outsourcing of technology or software development services to companies located in countries close to where the contracting company is located. Unlike traditional outsourcing, which may involve suppliers in far-away countries, nearshore development focuses on maintaining geographic, cultural and time zone proximity, which facilitates collaboration and reduces communication barriers.
For example, a US company could outsource development services in Mexico or Colombia, which would allow them to take advantage of the specialized talent in these countries without the difficulties associated with time or language differences.
Reduced operational costs
One of the most attractive benefits of nearshore development for midsize companies is the reduction in costs. By working with teams in countries where salaries and operating costs are lower, companies can obtain high-quality services at a much lower cost than if they hired local staff. This is especially beneficial for companies that do not have the budget to hire developers locally, but still need advanced technological solutions to stay competitive.
A Deloitte study on outsourcing shows that more than 59% of midsize companies opt for nearshore development due to cost savings. This strategy allows companies to allocate the saved resources to other key areas for their growth, such as marketing, sales or expansion.
Accessing specialized talent with nearshore development
Mid-market companies often face challenges when it comes to finding and hiring specialized technology talent. Nearshore development offers access to a wide range of professionals with experience in emerging technologies, such as artificial intelligence, mobile development, and data management. By hiring nearshore teams, mid-market companies can access a broader pool of talent that may not be available locally.
In addition, nearshore companies are often familiar with the latest technology trends and can bring innovative solutions that help mid-market companies stay competitive in the global marketplace.
Greater Flexibility and Scalability
Growth for a midsize business can be unpredictable, making flexibility essential. Nearshore development allows companies to scale their operations quickly without having to worry about hiring and managing an in-house team. Companies can scale their teams up or down based on the needs of the project, giving them greater flexibility.
For example, if a midsize company is developing a new application, they can hire a nearshore team to assist with the initial development phase and then scale back the team size once the project is complete. This ability to adjust resources based on needs allows midsize companies to streamline their operations and focus on key areas for growth.
Better collaboration and communication with nearshore development
One of the biggest advantages of nearshore development is the improvement in collaboration and communication, compared to other outsourcing models. Geographic proximity and similarity in time zones facilitate real-time collaboration between nearshore teams and internal company teams. This can significantly improve productivity and the quality of the final product, as important decisions can be made more quickly and with fewer misunderstandings.
In addition, cultural proximity plays an important role. Nearshore teams tend to share similar values and ways of working, which facilitates smooth and uncomplicated collaboration. This is especially useful for mid-sized companies that have no previous experience managing remote teams and need a smooth transition to this working model.
Nearshore development presents itself as an ideal solution for mid-sized companies looking to grow profitably and efficiently. By reducing operating costs, offering access to specialized talent, providing flexibility, and improving collaboration, this modality allows mid-sized companies to stay competitive in an increasingly demanding global market. For companies looking to expand their technological capabilities without the costs of an in-house team, nearshore development can be the key to success.
