Is Nearshore Software Development the Best Option for Your Project?

CHI Software
5 min readApr 5, 2023


Finding the right talent has never been easy. Working in IT, you have access to thousands of experts located across the globe, but the task remains challenging. Nearshore software development services may be an ideal option to cover your needs.

Onshore, nearshore, and offshore outsourcing have been known to business owners for quite a while, and their popularity is likely to intensify after the lockdown waves. So if not now, when?

Here is your guide to nearshore development, including a short comparison with onshore and offshore models. Also, follow the link to learn some intriguing stats and factors that impact the cost of nearshore product development .

What Are the Types of Software Development Outsourcing?

Outsourcing is divided into three types based on the vendor’s geographical location: onshore, nearshore, and offshore. Each type has its pros and cons, and picking one or another heavily depends on the company’s budget, goals, and risk preparedness.

Onshore, nearshore, and offshore comparison

Onshore software development implies hiring specialists in the same country. For some countries, especially developed ones, this option is the most expensive of the three.

Example: a UK company hires a UK vendor.

This option is for you if:

  • Your project requires frequent in-person communication;
  • There are data privacy restrictions regarding the specialist’s location;
  • Your project involves complex IoT hardware development and tight collaboration between hardware and software teams.

Offshore software development involves hiring a team from a distant country (across the ocean). Causing some workflow challenges, this option is still highly attractive for companies interested in cost saving.

When hiring “far from home”, you should keep in mind cultural and time zone differences, along with language barriers. Any of these factors may cause development protractions and deadline violations.

Example: a US company hires a European, Indian, or Chinese vendor.

This option is for you if:

  • You need a contractor for repetitive tasks that do not require frequent updates;
  • You are looking for IT support services;
  • The differences in working hours fit your usual schedule;
  • You consider the optimal price-performance ratio, which sometimes may be found only overseas.

Nearshore software development means employing a team located in a neighboring country or on the same continent, within the same (or close) time zone. As a rule, a company from a developed country would hire engineers located in a developing country with lower rates.

This option became more popular during the pandemic while the world was adapting to remote working processes. Even companies following a more traditional workflow are now more open to online cooperation.

Example: a UK company hires a European vendor, or a US company hires a South American vendor.

This option is for you if:

  • Your project requires frequent communication but not necessarily offline;
  • You aim to develop a new software solution from scratch with a lot of brainstorming and strategic sessions needed in real time;
  • Cultural similarities play a big role for your team and corporate policy.

As it might be seen, nearshore development is a happy medium for those looking for a less costly yet convenient workflow. Here are more reasons to consider this outsourcing model for your project.

What Are the Pros & Cons of Nearshore Custom Software Development?

Let us consider the advantages first. We have mentioned some of them in the general description, and now we will review them in more detail.

What is nearshore software development?


1. Similar working schedules

Thanks to close geographical proximity, you and your contractors start working at around the same time. How exactly is it beneficial? Software development teams are ready for real-time collaboration with no time lags. Keep in mind that several hours can sometimes save your product’s reputation.

Face-to-face communication is relatively easy because of more transportation options available. Plus, you save a lot of time: getting to a European country from the UK is several times faster than, for example, traveling to India.

2. A wider pool of talents

In some countries, software development services are a powerful tool, nurturing national exports. As a result, more people are focused on acquiring or upgrading their skills in the IT industry and more companies can offer their solid expertise.

Considering the circumstances, a lot of businesses do not mind increasing the distance to a contractor in order to find the right fit for their development project.

3. Similar cultural values

This point does not seem important until you face workflow issues because of trivial misunderstandings. The factor of culture can often get overlooked, as project management is concentrated more on budget and documentation. Meanwhile, different views and mentalities can cause conflicts and, subsequently, create more project risks.

Experienced managers would say that dealing with cultural differences is a skill requiring much of their attention and even additional training (like studying negotiation styles typical for other countries). So, similar mentalities reduce the workload and allow teams to focus more of their attention on product quality.

4. Cost reduction

Outsourcing screams cost reduction because you do not have to rent a bigger office for a new team or equip employees with the necessary hardware. It is the contractor’s responsibility. Plus, a lot of IT outsourcing companies are located in developing countries with lower development rates. How tempting does it sound?

Cost-effectiveness must be one of the strongest motivations for businesses worldwide to opt for outsourcing nearshore or offshore. Nearshore in this case allows you to save some budget with minimum impact on working processes.

Even though the benefits look great, there are also reasons not to choose nearshore software development companies.


1. Not the cheapest option

When you choose a nearshore vendor, there is a great chance its rates are higher than those at a similar offshore company. Think of your goals and the price you are ready to pay for the advantages provided by nearshoring. If time zones and cultural differences are not a big deal for your project, then offshoring could be a better option.

2. More effort is needed for timely syncing

No matter what outsourcing model you pick, timely communication is one of the challenges to handle. Your team always works remotely, but you still need daily updates on the development process.

We at CHI Software set up a communication policy with clients right away: the schedule of the daily and weekly meetings, one messenger for urgent updates, task tracking software, the list of state holidays, etc. These measures make the working process as transparent as possible.

3. Not suitable for 24/7 support

This point is important for B2C products providing client support around the clock. If you expect a development team to be available at 2 am to solve urgent issues, nearshoring is not the best choice. Some companies do provide night shifts, but the number of such businesses is significantly lower than the number of available offshore contractors.

Are you looking for more details? We are here for you with the full version of this article published on our blog.



CHI Software

We solve real-life challenges with innovative, tech-savvy solutions.