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7 Nearshore Outsourcing Benefits for Startups and SMEs
11 min.

SMEs and startups need to develop new solutions faster than competitors to attract investors for business benefits. Their main concern is to improve product features and business digitalization where they may face the challenge of how to find experienced and skilled employees who will be passionate to find the best solution and add business value.

Thus, the solution with the highest advantages is to hire local junior talents and an experienced team lead from neighboring countries. However, this takes time, and such loss of time means a loss of money. Hiring developers and architectures nearshore is one of the trendiest solutions now. Whatever you are curious about nearshore outsourcing benefits for SMEs and startups is in this guide.

nearshore outsourcing

What is Nearshore Outsourcing?

Nearshoring is a form of outsourcing that takes place in a country that is close enough to the buyer’s location. Nearshoring is commonly used in the software industry, where companies might outsource their project overseas but then move their engineering teams closer to home once they’ve got their product up and running, so they can continue improving it over time and gain operational advantages over their competitors.

Nearshore outsourcing benefits companies that want to reduce costs by outsourcing to areas with lower labor costs but don’t want the hassle of dealing with cultural differences or time zone differences. This type of outsourcing also gives companies more control over the project management process since they are closer to the developers handling their projects.

Caesar about outsourcing

Compared to other outsourcing engagement models, one of the main benefits of nearshoring is that it is in a region that’s closer to your home country than an offshore location would be. For example, if you’re based in the United States, then nearshore locations might include Canada or Mexico; if you’re in India or China, then nearshore locations might include Malaysia or Thailand.

Offshoring involves sending work to another country so that it can be done at lower costs than would be possible at home. For example, when US-based HANDLE Global contacted ProCoders, which is based in Central Europe to execute a web programming project, that is an instance of offshoring. In offshore vs onshore software development, the latter involves bringing work from overseas so that it can be done within one’s own country.

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7 Major Advantages of Nearshore Outsourcing for Your Product and Business

Companies have been outsourcing various components and activities since the beginning of time. Nearshoring is an even greater alternative to outsourcing because it takes place much closer to home. Here are a few reasons why many businesses are shifting towards this strategic practice. So, what are nearshore outsourcing benefits?

1. Cost efficiency

One of the biggest nearshore outsourcing advantages is its cost efficiency. It provides you with access to highly skilled labor at an affordable price. For example, the cost of living in Central Europe is much lower than in Western countries, even though the level of tech skills among developers is equal. Therefore, there is no need to pay more for the same job. Moreover, by using staff augmentation services, you will not have to worry about sick days and vacations taken by your employees as well. For ProCoders, our clients claim that working with us helped them to reduce the cost of their projects by up to 40%.

2. Time Zones

Often, this might be a disadvantage for most startups that are new to outsourcing. However, at ProCoders, our developers have garnered experience working across different time zones for several years and have methods for overcoming such challenges – such as shifting work hours and round-the-clock efficiency in real time. In other words, these benefits enable us to turn time zone challenges into a strength for our clients.

round the clock mem

3. Similar Culture and Language

Included in the advantages of nearshore outsourcing is that with nearshoring, you can hire employees who already share similar cultural backgrounds with your business or product team members. Because you will be communicating with people who speak your native tongue, there won’t be any miscommunication between employees due to cultural barriers or language differences.

Particularly, Central Europe is a nearshore destination with several benefits because most of the developers here speak English really well and have a European mentality. Hiring English-speaking developers is a principle we have adopted at ProCoders to ensure that our professionals can handle international projects with exceptional communication.

4. Access to an Extended Talent Pool and New Technologies

As one of the most critical advantages here, you also get access to an extended talent pool when you outsource your project to another country. This means that you will not have any shortage of skilled workforce when there are vacancies in your office. Moreover, staff augmentation gives you an opportunity to plug developers in and out any time you need. Hence, among the significant benefits is that you don’t have to pay for the hiring and firing process every time, only for the working hours of employees. Our clients love to use this option – they can get designers or QA testers on board any time they need them.

5. Better Control

When you outsource offshore, it’s easy to lose control over your business processes, and thereby lose out on business benefits and opportunities, especially if you’re not familiar with the language or culture of the country where your outsourced team is based. Nearshore outsourcing allows you to retain control over your project by working with local resources who understand your needs and can communicate effectively with them to deliver competitive advantages.

nearshore outsourcing benefits

6. Expansion into New Markets Possibility

Another advantage of nearshore outsourcing is that it allows you to expand into new markets without needing to send people from your home country, which means fewer expenses and more opportunities for growth. You’ll also be able to get a better understanding of how other cultures operate and use this knowledge to expand your product or service offerings even further than before for benefits in terms of business edge.

7. Diversity and enriching mindsets

Another one of the benefits of nearshore outsourcing is that working with people in different countries allows you to enrich the mindsets of everyone involved in your project by exposing them to new cultures, ideas, and ways of thinking that they may not have been exposed to otherwise. By outsourcing your project to a nearby country, you’ll have access not just to cheaper labor but also to more diverse mindsets that will enrich your product or service offerings for future customers and deliver more profit-oriented benefits for your business.

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Some Traps of Nearshore Outsourcing

Outsourcing your business’s work to a nearshore country is gaining popularity with each passing day because of the advantages herein. And for good reason, too – it provides a more efficient way of getting your company’s work done. There are several benefits of nearshore outsourcing, but the truth is there are some things to watch out for.

Fewer choices available

Despite its many benefits, the biggest issue with nearshore outsourcing is that there aren’t as many options available as there are in other areas of the world. If you choose to outsource nearshore, you will be limited to the number of countries in which you can find qualified contractors. Although it’s possible to find offshore providers with specific expertise and specialized services for business advantages, they may be fewer than those available nearer to home.

At ProCoders, we have developers not only in Estonia, but in Croatia, and Albania. We even have an office in the USA; hence, we can be considered as a nearshore option for many countries.

procoders offices

Managing trade secrets

One of the biggest challenges when working with a foreign nearshore software company is managing trade secrets and other confidential information. If you have a product or service with trade secrets, then it’s imperative that these remain secure during the process of nearshore outsourcing so as to maximise the benefits of this hiring model. This can be difficult if nearshoring companies aren’t able to meet certain security standards or operate within certain legal parameters. Some companies choose not to outsource any tasks related to sensitive data at all — even if this means limiting their options for finding the best talent worldwide.

At ProCoders, the quality service safety of our clients is our priority; hence, we require all our developers to sign an NDA to ensure that our clients’ sensitive details are secure because IP protection is one of the benefits we promise our clients.

Possible communication challenges

Even though there are more tools available today than ever before when it comes to communication between offices in different countries, there is still a chance that you’ll run into some issues with communicating across cultures and languages, even when both countries are close by.

lack of communication SW mem

At ProCoders, we work together with clients to ensure that communication is efficient by hiring developers who are proficient in English and can speak with various clients effectively. For productivity, we have a 30-minute rule, which indicates the time window when developers must respond to requests. This helps us to keep our team highly efficient.

What Does Your Business Gain with Nearshore Outsourcing With ProCoders Team

Has the time come for your business to grow at an exponential rate? If so, you need to create a winning plan and secure a development team that’s capable of actually implementing it by enjoying the positives of nearshore outsourcing. We want to help you build a strong foundation, which can then be utilized for rapid growth.

Startups on MVP and Early Pre-Seed

Technical value

Delegating development tasks to ProCoders’ experts gives you an outsourcing partner that saves you time and ensures that your product will be built according to industry standards because we have a high hiring bar. Our recruitment process involves high-level technical interviews as well as test tasks to uncover the true strengths and weaknesses of our candidates before they are hired.

Enhanced product quality

Nearshore outsourcing to ProCoders allows you to tap into the expertise of professionals who have years of experience working on similar projects. This means that your product will be built using tried-and-tested methods.

Technical support at each stage

If you are building a minimum viable product (MVP), one of the benefits of nearshore outsourcing to ProCoders is that you get a technical partner that can guide you through each stage of development, from design to coding and testing so that you can focus on improving it based on user feedback.

Time to market

With nearshoring services, we can help you launch your product quickly without compromising on quality by providing services according to customer specifications and requirements. With our team, you will be able to launch your app in less than 6 weeks in many cases because we already have many developers on our team, and you can find your perfect match among them. Even if it will not happen, we can still find you the developer you dreamed of since we know the market very well, so we know where and how to do that.

droids they're looking for mem SW

Focus on Your Business

If you have a low budget or don’t want to spend money on hiring in-house developers, nearshore outsourcing is ideal for you. You can focus on other aspects of your business and leave the technical side of things to us. If there are any issues or concerns with your product, then it’s possible that these can be fixed within a matter of days. In addition, when working with outstaffing companies, it is easy to add or drop crew members as the project gets along.

For instance, you might need a designer for a few weeks at a particular stage of the project. You don’t have to go through an elaborate hiring process for that. With staff augmentation, you can get who you need easily.

SMBs Digitalization

Save costs

Nearshore software development in Europe, particularly in countries like Estonia (in Central Europe) could be cheap due to the lower cost of living. This way, you can save money while getting quality work done by expert professionals who know what they’re doing.

Engage Expertise and Experience

Our team consists of professional developers with extensive experience in various programming languages and technologies such as Java, PHP, Ruby on Rails, Python, iOS apps development, etc. They have worked on numerous projects for startups, small and large companies all over the world, so they understand what it takes to succeed in today’s competitive marketplace.

Leave the Competitors far Behind

Our team will create an optimal product for your customers and make it easy to use. Thanks to this, your competitors will be left far behind, which is very important for startups in the digitalization stage, because they need to find their niche as soon as possible and gain popularity among users.

SMEs Scaling and Level Up

Jet Scaling Speed

We can help you grow quickly without losing momentum or slowing down your business. Our developers can create new features or add new functionalities without any delays or holdups in production. This means we can help you scale faster than ever before

Time & Money saving

The main reason behind this is that our team has built an efficient hiring process that ensures that we can get started on projects quickly. When clients contact us with their project requirements, we don’t have to go through an elaborate recruitment process. We already have developers on the ground ready to be appointed to develop projects in their skill level and range.

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F. A. Q.
What are the key disadvantages of nearshore outsourcing?

The main disadvantages of nearshore outsourcing are fewer choices available, managing trade secrets, and possible communication challenges. First, when you outsource to a country that is close to yours, you lose the ability to pick from a wide range of companies. Second, if you have sensitive information, it can be difficult to ensure that your contractors will keep it safe. Also, while cross-cultural communication can be an exciting challenge for some companies, it can also be frustrating for others who prefer more direct communication styles over more indirect ones.

What is software development nearshoring?

Software development nearshoring is a form of outsourcing that allows companies to outsource their software development needs to countries that are closer to home. It’s an excellent option for companies with smaller budgets and teams in need of dedicated resources. The advantages are that you can tap into the talent pool of a different country, and you can save money on wages.

How to avoid the security risks of outsourcing software development?

The best way to avoid the security risks of outsourcing software development is to make sure you have a strong NDA contract with your provider, and to make sure that you are aware of all of the terms of that contract. You should also make sure that you have a good understanding of what kind of work will be done, and how it will be done. When you know exactly what your provider is going to do, it becomes easier to manage the relationship.

Conclusion

  • Nearshoring is a form of outsourcing that takes place in a country that is close enough to the buyer’s location.
  • The biggest nearshore outsourcing advantages lie in its cost efficiency. It provides you with access to highly skilled labour at an affordable price.
  • The biggest issue with nearshore outsourcing is that there aren’t as many options available as there are in other areas of the world.
  • Delegating programming tasks to ProCoders’ experts who specialize in them saves you time and ensures that your product will be built according to industry standards
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