A Guide to Nearshore Software Development: Find the Best Outsourcing Model

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Key Takeaways

• Nearshore development reduces time zone challenges and delays, ensuring faster adaptation and higher-quality results, making it a smart choice for efficiency.
• Central and Eastern Europe (CEE) is an ideal nearshoring hub, offering proximity, competitive costs, skilled talent, solid infrastructure, and EU stability.
• As organizations progress in their global business services, offshore and nearshore models are gaining traction, while onshore models are declining.
• Western European countries like Germany, the UK, and France can optimize resources by outsourcing software development to the Czech Republic, Poland, and Ukraine.
• The global IT outsourcing market is expected to grow from $123.1B in 2024 to $171.5B by 2028.

The nearshore software development model is gaining traction among businesses seeking high-quality outcomes from engineers in nearby countries with minimal time zone differences.

Nearshoring provides a balanced solution, blending the advantages of onshoring and offshoring to maximize ROI through efficient, cost-effective talent utilization. In fact, 80% of North American companies are now exploring nearshoring as a key strategy for executing critical projects across various industries.

Acropolium operates in Eastern Europe as a trusted outsourcing partner, helping numerous companies optimize their costs with remote cooperation. In this post, we’re breaking down the benefits of this cooperation model, giving tips on choosing the perfect vendor, and sharing our recent success stories.

What is Nearshore Software Development?

Nearshore development is a collaboration model where clients partner with software engineering teams in neighboring countries, typically within a one to three-hour time zone difference. This approach offers cost savings without sacrificing quality, solving the lack of in-house expertise and talent in the client’s own country.

As the global tech talent gap grows, many businesses are increasingly looking abroad for skilled software engineers. In 2023, 75% of employers in 21 European countries reported difficulties finding workers with the right skills.

For example, countries in Western Europe like Germany, UK, and France can outsource software development to the Czech Republic, Poland, and Ukraine to optimize resources. The global IT outsourcing market is poised to grow from $123.1B in 2024 to $171.5B in 2028.

And, as organizations advance in their global business service journey, the adoption of offshore and nearshore models is rising, while onshore models are seeing a decline.

Benefits of Nearshore Software Development

According to McKinsey’s annual survey of supply chain leaders, the number of companies shifting to nearshore IT development has nearly tripled in 2023. Apart from cost reduction resulting from lower developer hourly rates, there are more reasons for businesses to cooperate nearshore.

Proximity and Time Zone Alignment

Nearshore development services offer the advantage of geographical closeness and time zone alignment by outsourcing to neighboring countries. This regional proximity allows for smoother communication, enhanced collaboration, and better coordination between businesses and their nearshore partners. As a result, teams can work together during regular business hours, avoiding the inconvenience of late-night meetings.

Cultural and Language Similarities

The cultural closeness between nearshore developers and the home country promotes better alignment in processes, expectations, and work styles. This shared cultural understanding strengthens working relationships and minimizes potential misunderstandings. Additionally, the language similarities contribute to smooth and effective communication with dedicated teams.

Regulatory and Legal Similarity

Nearshore software outsourcing within Europe offers the advantage of closely aligned regulatory frameworks and legal systems between Western and Eastern European countries. This alignment reduces compliance risks and ensures strong intellectual property protections.

For example, many Eastern European nations adhere to EU standards, supporting technological innovation while maintaining a balance of rights and obligations. Hence, when planning for legacy data migration with a nearshore vendor, you can rest assured they’re familiar with your compliance protocols.

Access to Skilled Talent

By outsourcing software development nearshore, companies can access this talent pool, benefiting from professionals experienced in narrow areas like cybersecurity or automation.

Usually contracted within subscription-based cooperation, such teams are also well-versed in global best practices and collaboration with international clients. This, in turn, ensures high-quality work while maintaining cost efficiencies.

Ease of Travel & Collaboration

Additionally, nearshoring reduces travel costs and time commitments since partners are within a manageable distance. Again, nearshore destinations also typically have regulatory frameworks and legal systems that closely align with those of the home country, minimizing compliance risks and offering greater legal certainty.

Cost-effectiveness

Nearshoring provides businesses with cost-effective solutions with the added benefit of rapid responsiveness. A nearshore development team can quickly address urgent requests, changes, or issues, allowing for swift adaptation to shifting business needs and market dynamics.

This agility enhances competitiveness and ensures that companies can efficiently meet customer demands without the higher investments often associated with offshore teams.

Outsourcing Software Development Nearshore vs. Offshore and Onshore

Nearshore software development offers a strategic balance between onshoring and offshoring by providing cost-effective access to skilled talent while offering proximity and similar time zones.

Unlike onshoring, which can be expensive and limited by local talent, nearshoring delivers competitive rates without sacrificing communication and collaboration.

Compared to offshoring, it avoids the challenges of time zone differences and delayed responses, ensuring quicker adaptation to business needs and higher quality outcomes. This makes nearshoring an ideal choice for businesses seeking both efficiency and effectiveness.

Central and Eastern Europe (CEE) stands out as an ideal nearshoring destination, offering a mix of strategic benefits. All in all, its close proximity to Western Europe is just the beginning — CEE also boasts competitive labor costs, a highly skilled workforce, robust infrastructure, and, in many cases, the stability of EU membership, which provides a strong policy framework.

Successful Nearshore Software Development Stories You Can Learn From

As we mentioned before, companies globally outsource software development nearshore, and you probably have heard of them. While this model benefits small and large businesses equally, many tech giants and global players are already seeing measurable results:

• For example, Dell Technologies needed to accelerate its development processes for its enterprise solutions while managing finances effectively. They engaged with a nearshore software development company in Latin America. The vendor was located in a similar time zone, hence facilitating real-time collaboration and communication. By leveraging lower labor rates, the company optimized development costs while reducing time to market.
• Next, IBM strived to enhance its support with nearshore development services. By partnering with teams in nearby countries, IBM has achieved savings, improved project turnaround times, and maintained productive communication.
• Located in the US, Cisco contracted nearshore software developers from Mexico to support various software development projects. The proximity of these teams to Cisco’s headquarters contributed to effective communication and project management across all project development.

Tips for Choosing a Nearshore Development Company

In every remote cooperation, trust and reliability are the cornerstones of a successful partnership. As a seasoned provider of app and web development outsourcing services, we’d like to share some tips that will help you on your way toward nearshoring.

Tip 1. Align on Vision Early

When discussing your project, share both your immediate tasks and long-term vision with potential partners. After explaining your goals and providing software specifications, ask them to relay their understanding to ensure you’re on the same page from the start.

Tip 2. Social Profile Check

Examine the management team’s social media presence to gauge cultural alignment and compatibility with your company’s values and mindset. This insight helps determine how well they’ll mesh with your team.

Tip 3. Work Culture Fit

Research the working hours and cultural norms of the country you’re considering for nearshore development. Ensuring compatibility in work culture and time zone alignment is crucial for a seamless collaboration.

Tip 4. Test Task Efficiency

Assign a test task to gauge not just the quality of the work but also the speed, ensuring the dedicated team is indeed proficient with modern architectures and tech stack. Compare it with how your in-house team would perform to determine if the nearshore option offers a genuine cost and efficiency advantage.

Tip 5. Think Beyond Geography

While nearshore options offer benefits, don’t limit yourself solely by geography. Many offshore companies adapt their work schedules to align with your time zone, so choose the best fit for your business needs, regardless of location.

Why Choose Acropolium as a Nearshore Software Development Partner?

With a broad coverage of web and app development solutions, Acropolium is a multi-faceted outsourcing agency offering different types of cooperation. Following ISO-certified processes, we deliver bespoke software, selecting the most suitable approaches according to your objectives and budget.

Acropolium Case Studies

Prioritizing compliance and data safety, our nearshore development teams have experience working in various niches, from hospitality and healthcare to fintech and logistics. Below, we’re sharing some of our latest successful cooperation cases.

Hotel Revenue & Demand Forecasting Software

Our client, a hotel management leader from Malta, was seeking a solution to optimize hotel revenue and demand forecasting processes. They contacted us as a trusted nearshore development company to help the business sustain competition, retain guests, and attract new customers.

• We fully developed a data integration system, which notably improved our client’s operations.
• As a result, room occupancy rates increased by 15%, while overall revenue rose by 18% due to enhanced dynamic pricing capabilities.
• Additionally, the system’s insights have boosted overall efficiency by 20%, streamlining workflows and supporting strategic decision-making.

Portfolio Intelligence Investment Software

In another case, we were approached not only as nearshore developers but also as professional consultants. The client operated in the Austrian fintech sector and required a real-time, transparent investment portfolio intelligence tool to integrate into their legacy software.

• Our developers effectively tackled the client’s challenges and delivered a streamlined wealth management investment software solution.
• We helped the client pick the perfect cloud architecture.
• The client improved project visibility by 30% and portfolio monitoring time by 30%.
• They also increased financial metrics access by 25% and decision accuracy by 25%.
• Overall, we boosted workforce productivity by 17% and proactively mitigated 80% of risks.

Final Thoughts

Nearshoring to nearby countries with skilled tech talent optimizes collaboration by ensuring seamless communication and real-time interactions. Aligned time zones enhance project efficiency, enabling faster decision-making, quicker responses, and streamlined workflows.

At Acropolium, we strive to make it real. From scalable SaaS software development and cloud consulting to custom mobile and web applications, we match companies with the talents they need. Having an impressive pool of nearshore developers across Eastern and Central Europe, we offer subscription-based cooperation where your budget and goals matter.

Contact us to discuss your opportunities for smart resource optimization!

Sources of Information

• US Nearshore Report 2024
• Global Outsourcing Survey 2023, Deloitte
• Nearshoring Trends in Central and Eastern Europe in 2024 — ING