A nearshore software development company bridges the gap when there’s a skills shortage, budget limitations, or extra projects stacking up that in-house developers can’t handle. Nearshore outsourcing companies cater to the gaps by providing the skills, resources, and time necessary to complete projects.
Outsourcing has become a global need. Statista revealed that the global outsourcing market reached a market value of £427 billion by 2024 and is projected to reach £614 billion by 2028, with an 8.48% annual growth rate. Let’s discover what nearshore software outsourcing means, how it works, and more.
What Is the Nearshore Software Development Model?
The nearshore software development outsourcing model describes a company outsourcing software development to an adjacent country. For example, a Belgium company may outsource to a Scottish team to align specific business needs like cultural compatibility and to work in a similar time zone.
Why Companies Outsource to Nearshore Software Development Companies
Companies use nearshore software development outsourcing for multiple reasons, some including:
- Skill Shortages: Businesses gain access to skilled developers when they experience of lack of local skills or staff shortages on their IT teams.
- Improved Company Efficiency: Companies may access diverse skills to infuse their in-house teams with the relevant expertise for complex projects.
- Extra Projects: Organisations outsource to nearshore companies when they have excess software development projects and insufficient in-house resources.
- Project Management: Businesses outsourcing software development may seek project managers to oversee the software development projects within their company.
- Limited Budget: A company may use the nearshore model for cost savings when they need software development but don’t have the largest IT budget.
- Effective Communication: Businesses use nearshore software outsourcing to bridge language barriers and ensure cultural and language similarities.
- Time Zone Compatibility: Organisations outsource to nearshore developers to ensure they collaborate in a similar time zone and communicate within business hours.
Advantages of Using Nearshore Software Development Services
Choosing nearshore models and working with a nearshore development team has many benefits compared to offshore models. Software development companies within your geographical location provide the following advantages among others:
Cost-Efficiency
A global outsourcing survey by Deloitte found that 70% of executives outsource software development for cost savings. Cost efficiency is one of the primary benefits of outsourcing work to nearshore software development companies, and companies enjoy cost savings while fast-tracking talent sourcing.
Cultural Alignment or Cultural Compatibility
Offshore cultural differences are often responsible for the global tech talent gap. Benefit from cultural compatibility to develop software solutions that target the right market. Cultural alignment may not be perfect in nearshore models, but it’s better than outsourcing to Latin America.
Effective Communication
Offshore outsourcing may have language barriers, but outsourcing nearshore software development ensures English proficiency for efficient communication. A nearshore software team in Europe understands your language and culture, which may not be the case with developers in India.
Greater Performance or Productivity
Nearshore software development outsourcing allows companies to outsource project management, software development, or parts of a custom software development project. Businesses can improve in-house productivity by letting teams focus on specific tasks while outsourced teams handle other tasks.
Highly-Skilled Workforce
The right nearshore development partner has skilled software developers ready to deliver expertise in all the technologies necessary to build scalable solutions. Skilled engineers deliver the technical skills you need without wasting time with never-ending recruitment processes.
Improve Company Efficiency
An in-house development team can focus on what matters within the company while the nearshore service provider handles the rest, which leads to operational efficiency, fewer downtimes, and enhanced resource allocation, especially during complicated systems development.
Similar Regulations
Nearshore software development services provide the added benefit of understanding local regulations, including CCPA or GDPR regulations for data security and privacy, HIPAA or HiTECH for the healthcare industry, or SOX for the finance sector. Nearshore software outsourcing allows a mutual understanding.
Better Time Zone Compatibility
Time zone compatibility is everything regarding project success, efficient communication, and seamless collaboration. A minor time zone difference with neighbouring countries is better than working with a service provider in a time zone that requires you to be awake at midnight.
Examples of Nearshore Software Development
Many large company names have used nearshore software outsourcing to integrate the features we love using in apps. Here are some examples of software development projects that used nearshore service providers to deliver the products we know today.
Basecamp
Basecamp initially used nearshore software development teams in Central and Eastern Europe to build the team collaboration and project management platform widely used around the world. Ukraine and Poland nearshore software developers designed, developed, and deployed the platform.
TransferWise
Banking applications require specialised skills from skilled professionals. TransferWise used nearshore software outsourcing in Estonia and Lithuania to develop the platform businesses and individuals use to securely reduce the cost of international transfers with transparent exchange rates.
Vive
Vive is a members-only community chat that respects data privacy and follows GDPR regulations. Vive collaborated with nearshore outsourcing teams to create their platform, enjoying seamless collaboration, cultural alignment, and the availability of skilled professionals.
How Does the Nearshore Outsourcing Model Work?
Business leaders can initiate the nearshore software development model in a step-by-step process:
Step 1: Business Needs Assessment
Assess the business objectives, needs, budget, timeline, and initial project requirements to discuss possible project scopes with nearshore development companies. Some project managers from nearshore development companies may take a minute to propose an initial project scope.
Step 2: Software Development Partner Selection
Consider the technical skills, costs, time zone compatibility, cultural alignment, and proven track record before choosing your nearshore development team. Does the nearshore company provide a list of clients and case studies? Are the nearshore developers qualified in different technologies?
Step 3: Outlining Collaboration Definitions
Outline and understand the collaboration details before outsourcing software development projects to nearshore development teams. Discuss project management, communication methods, and development methodologies. Also, sign a non-disclosure agreement (NDA) with the nearshore company.
Step 4: Software Development Process
Once collaboration begins, the project managers will keep clients in the loop about a project’s progress. Many nearshore software development companies use Agile methodologies, which keep clients updated and involved. Understand what is the Agile software development process.
Step 5: Quality Assurance Testing
Quality assurance (QA) is never negotiable, especially with nearshore software development companies. Why is software testing important? QA testing ensures that clients receive the high-quality deliverables outlined in the project requirements. Only partner with outsourcing companies that provide QA.
Step 6: Delivery and Ongoing Maintenance
Finally, businesses choose an ongoing support and maintenance plan from outsourcing companies to ensure products remain of the highest quality and secure enough for any industry, even banking and finance sectors. The nearshore software team must offer an ongoing maintenance plan.
How to Choose the Right Model: Outsourcing Models Compared
Understand each outsourcing model to determine which one suits your business needs better. The nearshore software development model differs from offshore development and onshore outsourcing.
Nearshore vs. Onshore Software Development Outsourcing
Nearshore software outsourcing describes an adjacent country’s development team while onshore outsourcing refers to working with a team in your country, region, or location. For example, a company based in Edinburgh outsources software development to Pulsion, an onshore software team in Scotland. A company ensures cultural balance but may pay more for onshore in some regions.
Nearshore vs. Offshore Software Development Outsourcing
Nearshore software outsourcing refers to partnering with a software developer team in a country adjacent to your own, whereas the offshore model describes partnering with a team in Latin America, China, or Africa. An example of offshore outsourcing is when your company is based in Italy and you outsource software development to China or Latin America.
Cost Comparison for Offshore vs. Nearshore Software Outsourcing
Offshore outsourcing costs less, but it doesn’t have the same benefits as nearshore software outsourcing. The table compares offshore and nearshore software developer costs based on average hourly rates that range by developer experience if you’re located in Central, Western, or Eastern Europe:
| Specialists | Nearshore (Europe) | Offshore (Latin America, Asia) |
|---|---|---|
| Solution Architects | £35–£90 | £30–£85 |
| Front-End Developers | £20–£100 | £15–£70 |
| Back-End Developers | £25–£120 | £20–£85 |
| Full-Stack Developers | £25–£120 | £20–£90 |
| Mobile App Developers | £20–£120 | £15–£85 |
| Quality Assurance Engineers | £15–£90 | £15–£65 |
| DevOps Engineers | £25–£130 | £20–£95 |
| Project Managers | £20–£120 | £15–£85 |
Why Choose Nearshore Over Offshore and Onshore Outsourcing?
Onshore outsourcing models can limit the skills, revolutionary technology expertise, and specialised development teams when outsourcing to a company in the same country. In that case, nearshore outsourcing provides solutions for the global tech talent gap.
Meanwhile, offshore models are more affordable for Asian and Latin American regions. However, cultural differences can prevent seamless communication and shared project understanding. It could also cause issues and lead to heavy fines when the outsourcing partner doesn’t understand local regulations.
Additionally, offshore companies typically have a 4+ hour time zone difference while nearshore outsourcing partners have a 2-4 hour difference in their time zones. Offshore teams could be offline by the time your business starts in the afternoon, hurting the communication efforts further.
How to Choose Models Based on the Top Regions for Nearshore Outsourcing
Companies can use nearshore outsourcing based on their locations. A business in the US can use the best nearshore regions like Latin America, and businesses in Australia could use Asian outsourcing. However, EU businesses can benefit the most from UK and European nearshore outsourcing.
Statista showed that Asia owned 59% of nearshore and offshore delivery centre setups in the last quarter of 2022, with Europe and Africa having held 30% and Latin America having owned 20% of the market. Discover the best regions to outsource to nearshore software development companies.
Best Nearshore Software Outsourcing Regions in Central and Eastern Europe
The best nearshoring software development regions in Europe include the UK, Poland, and Ukraine. Discover why you’d consider a nearshore development company in these regions.
UK Nearshore Outsourcing
The best regions to find a nearshore software development team in the UK include Scotland, England, Wales, and Northern Ireland. Statista shows that there were 466,000 software engineers in the UK in 2022, which empowers businesses to find multiple choices at a software development company.
Poland Nearshore Outsourcing
Poland is a popular nearshore outsourcing region in close proximity to Europe. Statista showed that there were 400,000 software engineers in Poland in 2023, making it another ideal choice for a wide selection of talented nearshore developers. The time zone difference isn’t major in Central Europe.
Ukraine Nearshore Outsourcing
Ukraine is another excellent region to find a nearshore development company, with Statista confirming that the country had over 200,000 software developers in 2023. Cultural differences may hinder Ukraine and Poland, but then we recommend turning to the UK, especially Scotland and England.
Top Latin America Regions for Nearshore Software Outsourcing
Latin America also has highly skilled developers available at offshore or nearshore development companies. Statista shows that Brazil has 500,000 software engineers available for offshore outsourcing, Mexico has 220,000, and Argentina has 115,000.
Only use nearshore outsourcing for these regions if your country neighbors the suggested countries, or they would fall under offshore teams. Latin American regions miss the matching cultural benefits and don’t understand local regulations in Europe.
Top Asian Regions for Nearshore Software Outsourcing
Finally, discover a software development team in Asian regions if the cultural and time zone alignment works with your country. However, only use these teams for nearshore outsourcing if you’re adjacent to their countries, or you’d be using offshore development.
Spending in the Indian IT sector shows that India’s IT sector reached a market value of £109 billion in 2024 while Statista shows that Vietnam’s market value reached £456 million in the same year. Still, working with teams in Asia is mainly suitable if you’re in the same country or close by.
Key Business Practices for Outsourcing Nearshore Companies
Businesses can follow best practices when using nearshore software development services to ensure they choose the right nearshore software development partner in neighbouring countries. A successful partnership follows the best business practices and guidelines to ensure the perfect match.
Expertise Relevance
Assess the nearshore company’s previous industry expertise and technical skills by evaluating the clients and case studies to determine whether the company has the skills necessary to deliver software products that meet your business goals. Access to a diverse range of skilled software developers also improves the likelihood of long-term collaboration because you may need other future projects.
Communication Approach
Effective communication makes or breaks a software development project. Consider the communication methods, frequencies, and channels used by the nearshore software development company to ensure seamless collaboration and effective communication. Do the project managers use Slack, Skype, Google Meet, or Zoom to update you on the progress of your software development projects?
Project Management Style
Project management is another aspect of nearshore outsourcing to consider in your best business practices. Which methodologies does the software development company use? Will the nearshore development company provide regular updates and seek feedback from stakeholders? Understand every step of the software development life cycle (SDLC) to actively collaborate with nearshore teams.
Cultural Alignment
Cultural differences can derail an entire software development project. Don’t be afraid to question the team’s understanding of local markets, target audiences, and regulatory standards. Businesses must work with nearshore developers who ensure compliance, whether outsourcing custom web development or mobile app development in nearby countries.
Cost and Project Transparency
Partner with software engineering services that are transparent about the costs and potential cost savings during the development process. Software developers should be transparent about every aspect of the software development cost and project, and the company should be transparent about the costs related to the outsourcing model from the start.
How to Outsource to Nearshore Software Development Companies
Beyond the best business practices, leaders can use our expert tips to prepare the company for nearshoring software development services to ensure long-term successful partnerships. Here are a few ways to prepare before outsourcing projects to nearshore software development teams:
Understand Your Project and Business Needs
Your business objectives will highlight the product, technologies, and programming languages you need to deliver exceptional quality to consumers or users. Create a list of the possible technologies, frameworks, and languages your project needs to understand if the nearshore team has the right skills.
Assess Your In-House Team Skills
Assess an in-house team of software engineers if you have an internal IT department. Does the team have the necessary skills to develop the intended product, or will nearshoring software development allow your product to have the latest technologies, including artificial intelligence and machine learning?
Evaluate Company Processes
It may seem straightforward, but it’s essential to evaluate your company processes, documentation, and daily language to ensure prospective nearshore companies match your needs before developing software solutions. Do the software development companies speak and document the same language?
Verify Shortlisted Nearshore Outsourcing Providers
Verify the company’s qualifications, skills, and quality of work before committing to a contract or NDA. Review the past clients and case studies, check their social media pages, and list technical questions you can ask the engineers during an interview to ensure you’re shortlisting the right candidate.
Provide Initial Project Requirements
Every company’s software development needs differ, and any nearshore provider will request initial project requirements. At Pulsion, we believe reliable nearshore outsourcing companies then take the requirements, conduct a thorough requirements analysis, and deliver complete specifications.
Outsourcing Software Development Projects to Pulsion
At Pulsion, seamless project management, transparent costs, and quality assurance are daily factors. We’ve provided outsourcing software development services for decades and have clients and case studies to show that we’re a trusted nearshore development partner.
Our nearshore software development services include the use of any of the popular technologies rocking the digital world in 2025. Outsource web development, mobile app development, and native mobile app development to our custom software development company.
We use Agile methodologies, keep clients updated, gather continuous feedback, collaborate seamlessly, and communicate effectively. We also provide a dedicated team on request to ensure a successful partnership for more complex custom projects for businesses needing dedicated resources.
Learn more about us to see how we’ve stood the test of time longer than most outsourcing companies. Our digital strategy consultants can provide expert advice for your web design and development or mobile app development needs. Contact us today to discover how we can serve you.
Nearshore Software Development Conclusion
Nearshore software development allows companies to outsource projects to nearby countries, aligning cultures and time zones to benefit from nearshore outsourcing. A nearshore software development team can revolutionise your business products by understanding the market.
It can also help companies cut costs and develop extra products without hiring an entire full-time team. Use our nearshore outsourcing tips, guidelines, and best practices to ensure you partner with the right nearshore software development team. Contact us today to discuss a seamless collaboration.
Nearshore Software Development FAQs
What is an example of nearshore outsourcing?
An example of nearshore outsourcing is when a business in Paris can’t source the relevant skills for a specialised project and needs to look at nearby countries to fill the gap. The Paris company then outsources the project to a nearshore software outsourcing service provider in Glasgow, Scotland because the diverse range of developer skills and technology expertise welcomes scalable growth.
Are projects limited by nearshore software development companies?
Nearshore software development companies can manage all projects, including web development, mobile app development, and custom application development for enterprises. A nearshore software development team is only limited to the technologies the service provider knows and implements.
Some mobile app development technologies we commonly use include Flutter, React Native, Objective-C, Kotlin, Xamarin, Swift, Ionic, NativeScript, and jQuery Mobile. Other technologies we use include Python, JavaScript, TypeScript, HTML 5, CSS 3, React, Django, Ruby, Angular, Vue.js, and Node.js.
How do I hire nearshore developers from Pulsion?
Our nearshore developers are available in flexible hiring models to suit any business need. Our outsourcing software development services include models for outsourcing nearshore software developers or hiring a dedicated team to work on your project from start to finish. Use our dedicated software development teams in a nearshore outsourcing model, or use our staff augmentation services to hire one nearshore developer to support an in-house development team.
Does Pulsion’s nearshore company have software development certifications?
Yes, Pulsion is a leading nearshore software development company with qualified nearshore developers. Our company is certified with ISO 9001 and ISO/IEC 27001 standards and has a deep understanding of HIPAA, GDPR, HITECH, HL7, and CCHIT laws and regulations to ensure software developers deliver projects that comply with local regulations. Our team is also qualified and has the relevant experience.
Does Pulsion’s nearshore development company provide cloud services?
Pulsion is a leading custom software development company with multiple nearshore outsourcing services, including cloud migration services. We are a certified AWS partner and Microsoft Azure partner that companies can trust as a nearshore software development partner with the right certifications for any cloud-based software solutions.
