Beginner?s Guide to Nearshore Software Development

Posted by RSK Business Solutions on June 12th, 2018

Outsourcing is one of the most popular business strategies, but nearshoring is a concept not known to many people. Related but different from offshoring, nearshoring have been emerging rapidly today. Here is a quick guide to nearshoring.

What is nearshoring?

Nearshoring refers to the practice where the work is shifted to another organization at lower cost, but within the same region. Nearshoring is a derivative from the term "offshoring", indicating the closer proximity.

The proximity, however, is not just limited to distance but also covers other factors like language, culture etc.

Why nearshoring?

Nearshore software development has been gaining popularity in some recent years, as the issues in offshoring became more apparent. The barriers of time zones, language and work culture often serve as a hindrance to communication, while the large distance increases the cost of site visits. Both these factors contribute negatively in the product development.

Nearshoring emerges as an alternative in such scenarios. Like offshoring, nearshoring too aims at delegating work to lower-cost organizations. However, the region is often the same and the close proximity pays off in more than one way.

Different from offshoring

The two terms are often confused with each other. While they both refer to outsourcing, there are some fundamental differences them. Here are some of them:

• Nearshore software development obviously refers to outsourcing of work within a close proximity, while offshoring include outsourcing to any part of the world (irrespective of the difference).
• Nearshoring ensures at least one common factor between the client and the outsourcing company, be it region, language or culture. In offshoring, all of these factors could be completely different.
• Different time zones are a huge barrier in communication in offshoring. This problem is solved almost completely in case of near shoring.

Steps towards nearshoring

Nearshore software development is not as easy as it sounds. The entire procedure could be broadly divided into three steps:

1. Initiation: First step is always realizing that one needs to outsource, and outsource locally. If a particular sector has never induced in nearshoring, things complicate even further. The best practice is to bring the entire team on-board with the idea, and seek their suggestions/approval.
2. Contract: The next step is searching the right nearshoring company. It is not absolutely necessary to go for the nearest option, but the search for the right option should not increase the distance to the extent of negating the benefits of nearshoring. All necessary clauses must be discussed beforehand, like team size, restriction on re-outsourcing and safety of the IP.
3. Involvement: Even once the software development has started, the involvement of the client is extremely critical. It provides an oversight into the progress made so far, and helps to recognize any dissatisfactory work. The continuous involvement of the client also helps the outsourcing team to get all the necessary details and work in synchronization.

It is not hard to understand nearshore software development and why it has captivated a lot of business recently. As an alternative way of outsourcing, nearshoring would soon become more prominent in the future.