What is Nearshore Outsourcing? Everything You Need to Know


Nearshore Outsourcing: Definition, Benefits, And More nearshore outsourcing

Nearshore outsourcing is similar to the offshore outsourcing model but has a few quirks. But what does this term mean, and how can this outsourcing model benefit your company?

We know you have many more questions like these in the back of your head, and we’re here to answer all of them. Let’s discuss everything about nearshore outsourcing today, starting with its definition.

What Is Nearshore Outsourcing?

Nearshore outsourcing is, as we mentioned, very similar to offshoring. But instead of choosing talents on the other side of the globe, you select a team from your nearby regions to work with.

That means the team’s location is geographically near you, and the timezone is almost similar. This can be your neighboring country or any country that falls within the same region you live in.

Benefits of The Nearshore Service Model

Here are ten major benefits that the nearshore service model provides

  • Geographical Proximity
  • Near Zero Time Difference
  • Cuts A Lot of Unnecessary Costs
  • Cultural Similarity Simplifies Communication
  • Compensates for Stuff Shortage
  • Improves Efficiency of Your Organization
  • Work Audits Are Simplified
  • Faster Turnaround Time For Projects
  • Lower Amount of Risks
  • Helps To Focus on Core Business Goals

1. Geographical Proximity

The biggest benefit of nearshoring is that you only need to take a short trip to visit your teammates for a face-to-face meeting. While online collaboration tools are amazing for team cohesion, a direct meeting streamlines conversations and discussion, increasing the efficiency of the development process.

2. Near Zero Time Difference

Since all nearshore locations are within the same region, there’s a high possibility that the timezone is exactly similar, if not slightly different. Time zone difference has been known to cause communication delays; the lack of time zone difference speeds up the process.

3. Cuts A Lot of Unnecessary Costs

Nearshoring means low costs in travel, faster communication, and better collaboration. With the power of these three, companies can optimize the development process a lot further than usual, saving many unnecessary operational costs.

Though traveling costs can still be considered an additional expense, it’s still much less than maintaining an in-house team of developers with high overhead.

4. Cultural Similarity Simplifies Communication

Similar cultures and languages play a vital role during team collaboration, and nearshore outsourcing can be sure of it. Since you’re hiring teams from nearby regions, the language and culture are more likely to be similar.

A similar culture means better collaboration and fewer differences in holidays, so the entire team is active at the same time during the active days.

5. Compensates For Stuff Shortages

Nearshore software development is a great way to compensate for staff shortages. It’s very normal for a beginner-level business to not have enough team members to cover all the inside tasks.

With nearshoring, you can have team members who can attend work on-site and collaborate to help with core business procedures, solving staff shortages.

6. Improves Efficiency of Your Organization

With outsourcing, the goal is always to partner up with the best of the best for a fraction of the cost. Nearshore outsourcing offers the best talents within your region who have previous experiences handling similar projects and already know what they’re doing without any prior training.

You can completely hand over the software development project to the external team. In contrast, the internal team handles various business operations, doing more within the same time frame and increasing the overall efficiency of all employees and the organization.

7. Work Audits Are Simplified

Nearshoring is known for giving you extensive control over intellectual properties. And since you’re within the same region, there’s a high chance of you and the vendor belonging to similar data protection laws, and it eliminates all risks while making asset audits much easier.

8. Faster Turnaround Time For Projects

Nearshoring reduces the communication delay between team members, so features, fixes, and updates are implemented far more quickly than in offshore outsourcing. This results in a faster turnaround time for all projects.

9. Lower Amounts of Risks

Working with teams, you have more oversight and control, which helps you monitor progress and provide faster feedback. This reduces the risks the application might have from not being market-fit enough or the potential risk of data theft.

10. Helps To Focus On Core Business Goals

Once the outsourced team is focused on product development, you and your internal team can focus on other core business processes like marketing and sales.

Challenges Associated With Nearshore Outsourcing

1. The Process Can Be Quite Expensive In Some Cases

While nearshore outsourcing can save costs, you will need higher expertise and more team members for more sophisticated projects. This results in increased expenses.

2. Shortage of Tech Candidates In Nearby Locations

There can be times when the tech skill you’re looking for simply doesn’t have enough experts within the nearshore region range. This can cause a shortage of tech candidates, and you must resort to offshoring.

3. Harder To Sync Deadlines

Though it sounds contradictory to the benefits mentioned above, sophisticated projects can cause delays. With slight delays in the time zones of nearby regions, it can be tougher to sync deadlines.

4. Being Closer Doesn’t Always Work Out As Expected

While there are benefits of working with people who are near enough, it also means that the perspectives you bring in with new team members will not differ greatly from your already internal team. It’s a big detriment to innovation and creativity.

Tips To Utilize Every Last Bit of Nearshore Outsourcing Services

1. Divide Tasks Into Categories Based On Their Complexity

There will always be certain parts of the projects that require additional attention compared to others. That’s why 24% of small businesses use nearshoring outsourcing to divide tasks based on capacity.

Assign the external, more experienced team to product development while instructing the internal team to handle sales, marketing, and customer support. However, customer support can also be outsourced if you plan to ensure 24/7 support.

2. Calculate The Feasibility of Nearshoring

While nearshore outsourcing is a highly efficient outsourcing model for your business and development needs, it’s not always highly compatible with every business model.

Since you’re already aware of how the model operates, research and determine the current condition of your organization before you engage in a contract with a software development partner.

3. Establish A Bond of Trust Among The Whole Team

Nearshoring promotes transparency but shouldn’t be limited to the external team. To get the most efficiency out of your contract, promote transparency and a bond of trust between the external and internal teams by arranging social gatherings and meetups outside the workplace and continuous collaboration between both teams inside the office.

To Wrap It Up

Despite its challenges, Nearshore outsourcing can bring you both the pros of onshore and offshore outsourcing. Nearshoring is a highly viable method for businesses of any range when they have the right partner.

Planning to partner with a trusted software vendor for increased business efficiency? Impala Intech is a well-reputed software development agency with a great track record of working with clients who want to leverage any outsourcing model.


What Tasks Are Commonly Outsourced Through Nearshore Outsourcing?

Tasks like software development, customer support, and data analysis are often outsourced through nearshore outsourcing.

How Does Nearshore Outsourcing Affect Company Agility?

Nearshore outsourcing enhances company agility by providing quick access to skilled resources without significant time zone challenges.

Is Nearshore Outsourcing Appropriate for Industries With Strict Regulations?

Yes, nearshore outsourcing to countries with similar regulations can help maintain compliance while benefiting from outsourcing.

How Can Companies Ensure Effective Communication in Nearshore Outsourcing?

Clear communication channels, regular updates, and the use of collaborative tools help ensure effective communication.

Is Nearshore Outsourcing a One-Size-Fits-All Solution?

No, while nearshore outsourcing offers advantages, its suitability depends on the company’s goals, project requirements, and preferred collaboration style.