A well-known business strategy for relocating aspects of or even the entire the software development process to a nearby country is called nearshoring or nearshore software outsourcing. In today's competitive market, businesses face the pressure to both innovate and maintain operational efficiency while controlling costs. Nearshore software outsourcing has emerged as a strategic solution that bridges the gap between quality and affordability, offering unique advantages over both traditional in-house development (insourcing) and offshoring.
In 2024 study by Deloitte the top drivers for companies to opt for outsourcing and nearshoring in particular were better access to tech talent, increased customer demands and budget optimisations. But no matter what incentive you have to choose nearshore software outsourcing, choosing a nearshore software development services company simply based on cost-cutting might jeopardise your project's future. That’s why we recommend you develop an in-depth understanding of the benefits of nearshoring so you can take a holistic look at your target location.
In this article we'll outline four ways nearshoring can help your next software development project.
Let’s get started.
1. Get a reliable partner for nearshore software outsourcing
The near physical distance when choosing nearshore software outsourcing creates two major advantages - time zone proximity and more frequent in-person meetings.
Time zone proximity
As a rule on thumb, the nearer you are to your software development team, the fewer coordination gaps you can expect. Geographical distance directly impacts communication styles, task distribution, collaboration and even trust in software development teams.
Also, compared to far away destinations, countries near yours have more similar cultures. That turns out to be key for teams working on the same projects. Cultural similarities contribute to fast progress pace, seamless communication and high team responsiveness. For example, if you're located in Western Europe, some of the best IT nearshoring locations are Bulgaria, Poland, Romania or Ukraine.
Regular in-person meetings
As a direct consequence of choosing a nearshoring partner, you can enjoy more frequent in-person meetings. This is yet another predictor of successful software development. MIT’s Human Dynamics Lab reports that human gestures as simple as a handshake can promote business cooperation and negotiation. In fact, eight out of ten executives would ditch virtual meetings and go for in-person ones instead.
Face-to-face contact opens up space for tough but important business decisions and promotes more complex strategic thinking. Given the extreme social isolation the pandemic challenged us with, many businesses are now reestablishing in-person team meetings at different speeds. Here, nearshoring can help strengthen business relationships as it eases team get-togethers.
Related: Top 25 nearshore software development companies for 2025
2. Fill in tech talent gaps on your team
That's when nearshore software outsourcing comes to the rescue, offering access to larger talent pools and domain-specific expertise.
- developers who write outstanding, neat code
- experts who understand the industry (domain) specifics.
A mix of both is essential for the success of your project, especially when your own team requires guidance and consultancy. Or when the product is still in an ideation phase. Or when the project is cluttered with legacy code, and you and your team feel a bit lost.
In fact, companies now need proactive people on board, capable of contributing to the whole project rather than just code. People who have a deep understanding of the domain, as each one comes with its own specifics. EDIFACT messages and format, for example, are domain-specific syntax rules within the mobility and supply chain industry. For inexperienced developers, it can take weeks of research (at the least) about suitable libraries and database specifications before they start work.
Finding the perfect blend of tech and domain experts in your country, however, may be challenging. It’s a niche skillset, after all, and shortages often occur. In 2019, an all-time high of 67% of IT executives admitted skills shortage gets in the way of their businesses’ digitalisation.
That’s when IT vendors from nearby countries come to the rescue. Nearshoring allows you to take advantage of larger talent pools, address skills shortages, and find niche experts with the needed domain expertise.
3. Use agile practices to bring teams closer together
Agile methodologies are critical to the success of nearshore software outsourcing projects. More and more IT companies (82% in 2018 vs. 91% in 2019) recognise it as the right way to cope with today’s dynamics and demand for continuous innovation. 71% of US companies use Agile, reporting a 60% growth in revenue.
Agile practices help reduce the three types of distance – temporal, geographical and socio-cultural. That creates a work environment that helps bring teams closer together, which is crucial when you are nearshoring your software development needs. The fuel that makes agile teams go forward is the desire to constantly find more efficient ways to complete tasks and enhance team performance.
Agile software developers and especially POD teams (product-oriented) are far more than coders. Pods are cross-functional, self-governing engineering experts whose innovative spirit drives them to analyse business scenarios from a technical perspective and communicate ideas to decision-makers in a timely and open manner.
Nearshoring IT companies spare a great deal of time and effort to master agile. After all, it’s how they stay competitive and efficient for their clients. Uniting forces with a nearby agile IT partner, therefore, is a strategic manoeuvre worth considering. You get the benefit of their development approach and spirit while you conduct daily scrum and team meetings during normal business hours. And you receive quality and timely results.
4. Tap into new markets through nearshore software outsourcing
Change is inevitable, but what remains a constant in business development is capturing new markets with heightened agility and innovative technologies.
In outsourcing, cultural mismatches and employment differences are common. Nearshoring, on the other hand, helps you build sustainable partnerships through like-mindedness, similar economic conditions, legislation and innovation initiatives. It helps companies access new markets and expand their service territory with less hassle.
Bulgaria is a prime example of a country thriving in nearshore software outsourcing. With companies excelling in IT and R&D services, the country is increasingly positioning itself as a trusted location for both nearshore software development and R&D services (e.g. Bosch, Inovexa and Lidl). The country’s business-friendly ecosystem, full of accelerator programs and venture funds, has thriving IT and ICT sectors. Belonging to the EU family, Bulgaria signed the Declaration of Cooperation on Artificial Intelligence (AI) in 2018. The initiative encourages sharing national AI strategies and fostering regional cooperation partnerships, making the country a favourable environment for future investments and new market acquisitions.
In a nutshell: Nearshore software outsourcing
Nearshore software outsourcing simplifies collaboration, bridges talent gaps, and supports agile innovation, making it a strategic choice for businesses. However, despite the numerous benefits of nearshore software development, finding the most suitable IT partner sometimes remains a challenge. As a next step, you can hear our Business development manager Valeriya Kozareva talk about the essentials when looking for a reliable IT partner in healthcare and pharma. Alternatively, you can check out our nearshoring success story of partnering with a Dutch insurance company.
Hopefully, after reading this article, you’re one step closer to making an informed decision about nearshoring. Even if all other success-promising factors are present, remember that software development boils down to the human factor. It's about connecting with the right people for you, aligning your project visions based on know-how and knowledge sharing, and building 100% mutual trust in each other.
We’d love to hear about your software project and help you meet your business goals as soon as possible.
