How to compare and choose a Nearshore IT software company

in Software development, IT strategy, MarketingBy Raquel Pereira, Communication Specialist

Over the years, companies have considered the offshoring model as an opportunity to evolve and to accomplish their future projects with staff flexibility, well-rounded software engineers without impacting their P&L significantly.

Although there is a geographical difference between the offshore and nearshore model, in recent years there has been a growth in demand for nearshore services. Having a neighbouring country within the same time-zone has allowed companies to have the best relationship between finding talent, developing projects or augmenting their development capabilities. Cultural and language similarities also bring an advantage to the nearshore model, becoming a common practice within the IT sector.

Technically, offshore and nearshore offer the same services: a third party that will complement part of the development services or even the whole process. However, the inherent geographical and cultural differences make all the difference when deciding for one of these services:

an offshore company can operate anywhere in the world, typically with the challenge to meet the team physically.
a nearshore company is located in a neighbouring country with the easy flexibility to meet and interact with the team.

The advantages of hiring nearshore services include easy communication, same time zone, the language barrier and working standards become increasingly non-existent over time. The most significant advantage of the nearshore model is the ability to enable the creation of a partnership with the entity that is sourcing this type of services, allowing:

Geographical proximity: accessibility of short trips help to set up online meetings or even face-to-face meetings.
Time-zone: makes it easier to manage the development of the project at with almost immediate feedback.
Language similarity: neighbouring countries can communicate easily, reducing the communication impact in the way of work.
Accessibility to talent: find the expertise that may not be so easy to access in your country.
Ease and speed: nearshore IT companies have the experience and ability to manage all phases and stages of a project, where a team can work standalone or as an extension of your team.
Intellectual property laws: due to geographical proximity, rules become similar, namely in Europe, facilitating the partnership process.

Nearshore has been identified as one of the most reliable to carry out a project by real experts. However, when it comes time to choose a partner, the decision becomes challenging if you are not aware of the following four points:

1. The best country/location based on your specifications

The first step will be the shortlisting of potential countries that match your needs. During this process, the following should be considered:

Intellectual-property protection agreements are in place.
Governmental policies to foster technology and software development.
Size of the pool of talent translating to how many developers with higher education and experience, live and work in the country.
If there is a link between cultural and working values.

2. Pros and cons of each country/location

After reducing the potential list of countries, a comparison of the qualities of each one is essential. Each region will have its area of expertise and experience, and these will be the main characteristics that should be taken into account. Our advice is to analyse which nearshore companies are in the market; Supporting which clients; What is the technology stack they are more expert in; What are the available communities and the technical potential of that country. All of these details should link with the current needs of your project and company.

3. Compare the different offers and calculate effectiveness/cost

The next step is to conduct a search and contact 4 to 5 companies in each country. There must be a preparation of key queries that are replicated at each meeting so that the benchmark is identical. Issues such as range costs, service models, experience in previous projects and types of contract, are essential to the definitive choice of a third party.

4. Analyse portfolios, feedbacks and recommendations

After pinpointing, a meeting via video call or physically with the chosen companies is mandatory, making the decision easier. It is necessary to understand and assess if the desired company will make a good match in terms of requirements and cultural values. For the last step, we advise you to analyse portfolios, feedback from both, clients and employees, the stability of the company and the experience of the current team. There is a common practice among IT companies to have a presence in several evaluation platforms, which makes it easier to access the relevant information. If you find it necessary to contact former clients, an experienced nearshore company that is confident in its work, will not deny this request.

With these recommendations, the process of finding the right partner will be fast and efficient, answering to your current needs. The final step is the discussion of all details, deadlines and prices before signing the contract.

Conclusion

There are a thousand ways of getting a project done nowadays. Still, when it comes to a long-term relationship, it is increasingly clear that the nearshore model is the best choice to optimise software development.

When it comes to choosing a nearshore IT partner, all modern companies confirm and value optimised processes, cost reduction and flexibility when creating a partnership under this model.