How to Pick the Best Nearshore Software Development Partner

nearshoring partner

When you’re running a startup or tech company, it’s hard enough keeping the cogs of your software development efforts turning without worrying about adding new partners and vendors to that mix.

However, with nearshoring becoming an increasingly popular option for tech startups, the need to find and choose the right partner is more important than ever.  (Nearshore software development means using software developers in a country or region near a company’s home country, rather than an offshore location that is many time zones away.)

Juggling all of the variables can be overwhelming. So how do you make sure that you end up with a partner that understands your needs and won’t leave your company floundering? What magical combination of location, abilities and cultural fit are necessary for a successful outcome?

When you’re running a startup or tech company in the United States, it’s hard enough keeping the cogs of your software development efforts turning without worrying about adding new partners and vendors to that mix.

However, with nearshoring becoming an increasingly popular option for tech startups, the need to find and choose the right partner is more important than ever.  (Nearshore software development means using software developers in a country or region near a company’s home country, rather than an offshore location that is many time zones away.)

Juggling all of the variables can be overwhelming. So how do you make sure that you end up with a partner that understands your needs and won’t leave your company floundering? What magical combination of location, abilities and cultural fit are necessary for a successful outcome?

Luckily for engineering leaders everywhere there’s one surefire way to guarantee success: take some advice from those who have been there before! Thus, I partnered with our executives to share their experience with nearshoring. TurnKey’s executives have been in your shoes before when creating their own SaaS-based startups, so in this article we’ll explore some of the key considerations when selecting a nearshoring partner and show you why choosing the right one could prove instrumental in helping your startup or tech company reach new heights!

Table of Contents

How Can Nearshoring Help You Improve Your Software Development Efforts?

80% of companies in the United States are actively considering nearshore. There’s been a shift in tech hiring trends and  strategies. Businesses want more efficient and cost-effective solutions. A competitive global marketplace will make nearshore an increasingly important consideration for companies in North America. Moreover, 21% of small businesses offshoring intend to hire a nearshore company, up from 15% the previous year, according to Clutch. More and more US-based companies seek nearshore talent in Latin America because of a close workday overlap, strong cultural fit, and high English language proficiency. Thus, let’s consider all the benefits of nearshoring in detail.

nearshoring map

#1. Cost Effective

One of the biggest advantages of nearshoring is cost savings. By nearshoring their software development efforts, startups and tech companies can save up to 30-40% in labor costs when compared to local rates. This is because nearshore countries tend to have lower labor costs than domestic locations due to the differences in taxes and benefits packages. Furthermore, nearshore software development partners are often more familiar with the local culture and market, which means there are fewer risk factors when it comes to communication and language barriers.

#2. Faster Speed to Market

In addition, nearshore software development can help increase a company’s speed of delivery. Working with nearshore partners ensures shorter time zones and closer proximity, allowing for quicker response times from developers working on projects. This helps companies get their products developed faster and released into the market much sooner than they would be able to if they were working with an offshore location.

#3. Enhanced Security

Since data is stored closer to home, there are fewer risks associated with data breaches or other security issues since the distance between the server and end user is significantly shorter. Additionally, nearshore services offer superior technology infrastructure than what may be available at a domestic location, ensuring that all projects remain secure while being developed as well as during deployment.

#4. Better Quality Control

Nearshoring allows for better quality control since there are fewer cultural divides between teams working together on a project. With nearshore outsourcing partners close by, project managers can easily keep tabs on development progress without having to worry about extra long-distance travel or communication expenses associated with offshore locations

Additionally, nearshore software development can provide improved support thanks to its closer proximity; should any questions come up about a specific feature or bug fix, help is just a phone call away rather than being located halfway around the world!

#5. Bigger Pool of Top Tech Talent

Finally, nearshoring offers access to top talent from both local markets as well as surrounding areas that would otherwise not be available domestically – this can be especially beneficial for businesses needing niche skill sets that may not be easily attainable domestically due to their rarity. 

Moreover, nearshore developers tend to build strong relationships with their internal teams over time due to their frequent contact throughout the entire software development cycle – this makes it easier for them to understand needs quickly and efficiently.

Not surprisingly given the above, nearshore software development has become one of the most popular approaches for companies to optimize their software development efforts.

Nearshoring reshapes how tech companies expand globally, enabling access to untapped talent pools while maintaining collaborative synergy.
Sterling LanierCEO TurnKey

One example of a company that uses nearshore software development heavily is software giant Microsoft, which nearshores its operations in countries including Argentina, Costa Rica, Mexico and Uruguay. Microsoft leverages nearshore teams for both engineering & services tasks such as application development and support. It also provides nearshore services to other international clients in Latin America, Europe and the United States.

Another major company taking advantage of nearshore software development is Hewlett Packard Enterprise (HPE). HPE has nearshored hundreds of IT professionals in Romania who are responsible for developing highly complex enterprise solutions. Leveraging nearshoring capabilities enables HPE to build better-performing solutions at a relatively lower cost by utilizing local resources with specialized skill sets such as artificial intelligence (AI) and big data analytics experts.

Search giant Google also uses nearshore developers across Europe and Latin America for its software development needs. In countries like Ukraine and Poland, Google relies on nearshoring developers to help design and develop products ranging from search engines and browsers to mobile phone operating systems. The tech giant also uses the top talent from these countries to assist with large-scale projects like machine learning and natural language processing technologies.

You can also watch the video from our CEO where he explains when offshoring and nearshoring really works.

If you want to do nearshore software development, partner with the experts in the space. We’ll hold your hand every step of the way.

TurnKey’s Tips on How to Choose the Right Nearshore Software Partner

Choosing the right nearshore software development partner may feel like you’re finding a needle in a haystack. You want an experienced team that can deliver amazing work, all while hitting tight deadlines and staying within budget.

But don’t worry — it’s easier than you might think! Here are some tips I found during my investigation on how to make sure you choose the best nearshoring partner for your startup or tech company.

choosing nearshore partner

Clearly define your nearshoring needs

Taking the time upfront to determine exactly what you need from a nearshore partner can save headaches down the road when it comes time for execution. In short, set yourself up for success by clearly defining exactly what you’re expecting from your nearshore software development partner. 

To this end, consider the following steps:

  1. Understand the nearshore software development partner’s capabilities
  2. Define the scope of work and timeline for nearshore software development
  3. Determine how nearshore software development will be managed, including communication protocols, reporting requirements, and quality assurance processes
  4. Identify the nearshore team members who will be involved in the project and their roles and responsibilities
  5. Establish a budget for nearshore software development services
  6. Set up an agreement between you and your nearshore partner outlining all terms of engagement 
  7. Develop a plan to measure success of nearshore software development efforts

Select suitable nearshoring locations

nearshoring vs offshoring

Choosing the right location can also be a tricky dance. To make it easier for you, follow these short instructions:

  • Assess which countries have the necessary skills: Look into different countries that offer the services you need and determine whether they are suitable for nearshoring. Consider what language is spoken, the cost of labor and any cultural differences between your organization and theirs.
  • Evaluate infrastructure: It’s important to think about how reliable their technology infrastructure is as well as transport links, communication networks, etc. That way you can feel confident that all data will be transferred securely without any issues.
  • Understand government regulations: Before choosing a nearshore partner, research any relevant government regulations or laws you need to be aware of in order to remain compliant with local law.
  • Analyze competition activity in the area: Companies often base their decisions on what other corporate giants are doing in a certain market so it’s worth taking note of companies that operate near your potential partner and how successful they are.
  • Examine cultural differences: Different cultures have different approaches to business relationships, customer service and working environments so it’s essential to learn more about these aspects before making a decision.

Research potential nearshoring partners

Researching potential nearshoring software development partners requires a thorough process in order to ensure that the results are reliable and accurate. There are several steps that should be taken to research nearshore software development partners, including gathering information, evaluating options, and asking important questions.

1. Gather information

The first step is to gather information about nearshoring software development partners. This can include researching online for nearshore companies, reading customer reviews and testimonials, looking at portfolio pieces, and talking to colleagues or industry professionals who have experience with nearshoring. It is also important to consider the specific needs of your business when doing this research as nearshoring is not a one-size-fits-all solution.

2. Evaluate your options

Once you have gathered enough data on potential nearshore partners, it’s time to evaluate them closely. Consider factors like pricing models, expertise levels of their teams, language capabilities, technology stack proficiency, project delivery processes and methodologies they use, customer service levels and communication protocols. Additionally assessing their compliance levels with ISO standards is also important if your business operates internationally. Examining the company profile page of each partner on social media platforms such as LinkedIn can also give an idea of their team size and professional background.

3. Ask the right questions

Finally, before signing a contract or working relationship with any nearshore partner it is essential to ask key questions about their nearshoring services. This could include inquiries about experience in particular industries or technologies that may be relevant for your project; details about security protocols; understanding how changes in scope will impact timescales; what services are available after delivery; and if there are any additional costs associated with the setup phases or ongoing support once the project has been completed. Asking these questions will provide better insight into how well they can meet expectations over the life cycle of the project.

Overall, researching nearshore software development partners is an important step before making any decisions on which company to go with. Taking the time to do the due diligence will ensure that you make an educated decision when selecting a partner based on relevant criteria for your given situation rather than basing it on cost alone.

Set your expectations

When you’ve chosen your nearshore software development partner, it’s important to set your collective expectations. Doing so will ensure that you get the best possible results from the team. The following guidelines provide helpful insight into how to set these expectations:

  • 1. Clearly define roles & responsibilities: Each nearshore team member should have their own specific duties and responsibilities outlined in detail. It's also important to establish protocols for communication between nearshore teams and on-site personnel, as well as assign overall management or supervision of nearshore activities. Doing this ensures everyone is on the same page from the very start of nearshoring.
  • 2. Choose The Right Team: Ensure that the nearshore team consists of individuals with the right skill set for your particular project requirements; having an experienced manager who has worked with nearshoring before can be highly beneficial in this regard. Consider variables such as cultural background when selecting a nearshore provider, as this could significantly influence how well they understand your needs as a client.
  • 3. Utilize Effective Project Management Tools: Invest in effective project management tools that are capable of tracking progress across tasks while providing real-time feedback on performance metric. Further, these tools can help optimize communications between remote teams by enabling direct collaboration without relying solely on emails or verbal conversations.
  • 4. Set Realistic Timelines & Milestones: Establishing realistic timelines and milestones is essential for successful nearshoring. These need to be communicated clearly at every stage so all parties involved understand their expectations during nearshoring processes like product releases or feature updates. This will minimize delays associated with miscommunication or lack thereof!

As expected delivery dates draw closer, it may also be necessary to adjust timelines accordingly if unforeseen circumstances arise such as changes in scope or resource availability issues due largely to remote working conditions.

And last but not least – always plan ahead by including an agreed upon contingency plan in case something goes wrong during the execution phase (this could include an increase/decrease budget protocol depending on specific situations).

Prepare a legal base and sign the contract

When you finally have chosen your nearshoring partner, it’s important to have a solid legal base and framework that both parties can agree upon. To prepare for this process, there are several steps that need to be taken:

  • Select an appropriate type of contract that is suitable for your nearshore partnership. This could be a fixed-term agreement or ongoing services contract depending on the scope of work involved with nearshoring.
  • Draft the details of the nearshore contract to ensure that all expectations and commitments are clearly outlined in writing and signed off by both parties before proceeding with nearshoring operations. Be sure to include financial terms such as payment schedules, delivery timelines, dispute resolution strategies and more in this document so that there is mutual understanding between you and your nearshore partner.
  • Finalize any additional agreements or documents that may be needed prior to beginning nearshoring operations such as confidentiality agreements or intellectual property rights documents if applicable. These documents should also be mutually signed off by both parties before nearshoring begins to protect each party’s interests throughout the process.
  • Take measures to ensure compliance with all local laws related to nearshoring operations such as export/import regulations or employment law requirements depending on where you are doing business together with your nearshore partner. Make sure to also stay abreast of changes in regional laws so you remain compliant throughout the duration of your nearshoring agreement.

By properly preparing a legal base and signing a contract when nearshoring , organizations can reduce risk while taking advantage of opportunities available from forming new partnerships abroad. With sound communication protocols, well-defined expectations, transparent financial terms, an appropriate legal structure, strict compliance standards, and mutual respect between partners, companies can successfully leverage nearshoring for their software development needs. 

Legal aspects can be difficult to manage alone for the first time, that’s where TurnKey can help! We have a professional legal department that helps our clients with all legal-related issues.

Or Just Let TurnKey Do It All For You!

We understand that it can be difficult to find the perfect development team for your product needs. That’s why TurnKey specializes in helping startups and high-growth companies hire and retain teams of nearshore developers. Through our Yourshoring service, you get:

  • A fast recruitment process, taking only 30 days to hire exceptional software developers in various technologies.
  • Salary transparency: clients are provided with all the information they need to make informed decisions about their software development efforts.
  • A 50% better retention rate than industry average due to opportunities for improvement and culture-matched positions offered by the company.
  • White glove customer service from a Silicon Valley-based account team, ensuring that nothing gets lost in translation during communication.
talent retention

With our deep industry expertise, TurnKey can find perfect candidates for any open position within your development organization. One of the examples of successful nearshoring is our client Headspace. Amidst the swiftly changing landscape of technology, Headspace, an upcoming publicly listed company, encountered difficulties in finding the right talent. Despite possessing a substantial development team in the United States, their pursuit of highly skilled developers at a competitive cost proved to be challenging. To address this, they joined forces with TurnKey to establish a research and development innovation center in Mexico.

Remarkably, within just 30 days following the signing of the agreement, the first batch of hires for this newly established Mexican center were already on board. This initial success inspired Headspace to expand their original vision for the center.

Collaborating with TurnKey surpassed our expectations. In under two months, they seamlessly built our initial team. The quality and speed of acquiring such exceptional engineers left us genuinely astonished.
Headspace

We custom recruit the top 3% of talent across all the key engineering positions you may need as you scale.

Where to Look For Nearshoring Software Developers

Startups and tech companies looking for nearshore software development teams have a number of resources available to them. Online nearshoring directories allow them to easily compare nearshoring service providers, giving key information about their nearshore teams, such as size and location. These directories are a great starting point for startups and tech companies to narrow down their nearshore options and see which potential nearshore partners fit their specific needs.

In addition, networking events such as conferences, meetups, and other gatherings focused on nearshore solutions are a great way to meet face-to-face with potential nearshore partners and discuss the specifics of the engagement. Many nearshore providers participate in these events in order to showcase their technical capabilities and cement relationships with potential customers.

Finally, startups and tech companies can also turn to trusted advisors or colleagues who have already used nearshoring services in the past. Such individuals can provide valuable insights into what it’s like to work with certain nearshore software development teams and how successful the partnership was overall. Their first-hand accounts of working with various nearshoring partners can help startups and tech companies make more informed decisions when selecting the right nearshore partner for them.

Best Software Development Nearshoring Destinations for U.S.-Based Startups and Tech Companies

For American companies looking for a nearshore software development partner, Brazil, Mexico and Colombia are great places to start. These countries offer high quality nearshoring solutions while maintaining competitive costs.

In Brazil, the nearshoring market is highly advanced and mature. Companies benefit from working with experienced professionals that can provide expertise in a variety of areas such as AI, ML and blockchain development. Furthermore, Brazil’s nearshore teams provide access to a large talent pool that can easily be accessed due to its well-developed digital infrastructure.

Mexico is also a great nearshore option for American companies due to the close proximity between the two countries. Mexico’s nearshoring industry has grown rapidly in recent years and offers companies reliable access to professionals who are familiar with US culture, technology and business practices. Additionally, Mexico has an abundance of nearshore providers offering services such as UX design, mobile app development and cloud engineering.

Colombia is another outstanding nearshore choice for US startups looking for cost-effective solutions within close proximity. With years of experience serving clients from all corners of the world, Colombia has become a leader in nearshoring services ranging from software development to DevOps consulting.


Read also about alternatives to nearshoring.

Need more specialized talent but don’t have room to grow your in-house team? Nearshoring could be the answer.

Why do companies nearshore their software development efforts?

Companies nearshore for a variety of reasons. Generally, nearshoring is done to reduce costs, improve quality of service, take advantage of the local language and cultural ties between countries, and access deeper talent pools. Nearshoring also allows companies to be geographically closer to customers and suppliers, allowing them better collaboration opportunities.

What is an example of nearshoring software development?

Nearshoring software development is when a company scales the development of their software to an external team located in a nearby country. This allows them to take advantage of local expertise and resources, while keeping costs down compared to onshoring. 

What nearshoring locations are there?

There are many locations suitable for nearshoring software development, including countries in North America, Central America, South America, and Eastern Europe. In North and Central America, Canada is a popular destination for nearshoring as well as Mexico and the Caribbean nations. In South America, Brazil is the most popular destination for nearshoring services. In Eastern Europe, some of the most popular destinations include Poland, Romania, Ukraine, and Bulgaria.

Which variables should I consider when choosing a nearshoring partner?

When choosing a nearshoring partner, there are several important variables to consider. These include:

 

  • The cost of the service and whether it fits within the budget

 

  • The experience and expertise of the development team

 

  • The location of the nearshore provider and its proximity to your company's home base

 

  • The language proficiency of the nearshore software development team

 

  • Their existing portfolio and references from past clients

 

  • The quality assurance processes implemented by the provider

 

  • The support services that they offer after delivery

September 4, 2023

TurnKey Staffing provides information for general guidance only and does not offer legal, tax, or accounting advice. We encourage you to consult with professional advisors before making any decision or taking any action that may affect your business or legal rights.

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