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Nearshore development: costs vs benefits | Gigavoice Blog

Nearshore development: costs vs benefits

Nearshore IT development is an attractive solution for developed countries with IT outsourcing neighbors close by. However, the costs are generally higher compared to offshore outsourcing. Is it worth it? We explore more here and invite your comments at the end.

Nearshore development: costs vs benefits

Nearshore software development

Software (or other IT related) development is one of the most outsourced processes trending across the world. Companies usually hire IT specific firms with more experience and to develop a software application, on the web or for mobile devices.

One of the main reasons for outsourcing IT development process (other than convenience) is cost. Development costs can be a few times less expensive in less developed countries. And the quality of IT software development is the

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same, or even better. At first sight the math is simple- same quality for less money. But…(there is always a “but”.) Different time zones, culture, language, and work ethics can nullify the benefits of low cost IT operation.

So what might be the solution?

Another type of outsourcing called “nearshoring” can solve these problems. When you nearshore, you outsource IT functions to companies in nearby countries, sometimes those that share a border with yours, or that are in the same time zone (+/- one hour). Often, near shoring countries have similar work ethics and culture.

Benefits of nearshoring IT development

  • Geographic proximity and culture similarity make communication and travel more personal, convenient, and cheap.
  • Although IT services and products can be more expensive than an offshore outsourcing company in the short term, nearshoring companies can provide more cost efficient services in the long term.
  • Developers from some of the most popular nearshore outsourcing countries are highly educated, certified and have skills that equal to colleagues from developed countries.
  • It is much easier to establish face-to-face communication and meetings, and proximity also enables joint meetings of professionals from both companies, including training(s) or consultation.

Nearshore development costs: Is it worth it?

To conclude, we’d say that although nearshore outsourcing may be initially more expensive than offshoring, it has its own benefits that make it more attractive. And, in the long run, efficiencies of time delivery, communication, and real time project management can save money over long term collaborations. It’s important to evaluate your company’s overall IT development process and identify whether nearshoring can benefit you, or not. When it comes to costs, sometimes it IS better to partner closer to home.

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