What is Nearshore Software Outsourcing?

Nearshore software outsourcing is when a company outsources software development work to a country adjacent to their own. For companies in the U.S., nearshore outsourcing typically means sending work to software teams in Latin America or North America.

Some of the most popular nearshore destinations in Latin America include Colombia, Mexico, Brazil and Argentina. All four countries have compatible working hours with all timezones in the US.

Although cost reduction is an important factor in outsourcing decisions, businesses that choose nearshore outsourcing are typically motivated by the high level of programming skills and the value it adds to software products. Nearshore outsourcing providers also typically have the language skills and cultural compatibility that makes close collaborations run smoothly.

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Outsourcing software development to a nearshore provider offers several advantages over developing products internally. Some of the principal benefits include:

Addressing Staff Shortages

Nearshore developers are experienced in working on project-based software. They have the skills and the flexibility to bridge staffing gaps at short notice. Their experience working with a range of companies ensures that they meet quality standards, which means they will fit in with your company effortlessly.

Access to Skills

Nearshore outsourcing companies provide businesses with access to a wide talent pool. With outsourcing, businesses aren’t restricted by the skills of their immediate team – they have access to the best expertise a region has to offer. They also don’t have to spend money searching for the right candidates to join their team.

Cultural and Language Similarities

Sharing a language and similar working cultures are key assets in reaching project objectives. Clear communication underpins every software development project and nearshore outsourcing ensures that there are no language barriers to contend with.

Improving Company Efficiency

Nearshore providers enable companies to concentrate on day-to-day business activities. Companies that choose to develop internally often find themselves overloaded with work and unable to take on new projects. Outsourcing frees up company time and resources, streamlining their processes. According to market research company Technavio’s Global IT Outsourcing Market 2018-2022, the IT outsourcing industry is set to grow by $409 billion by 2022 and will be driven by the need to optimize business processes.

Geographical Proximity

Although nearshore outsourcing doesn’t require face-to-face collaboration, being geographically close to your development provider does have its advantages. Travel costs are generally low and timezone compatibility facilitates convenient and timely communications. Should you need to meet with your provider in person, nearshore outsourcing facilitates this option.


To help you choose the best nearshore outsourcing team for your needs,
we recommend following these three steps:

  • Assess Your Organization’s Skills

    Before outsourcing software development you need to know where your internal team’s skills lie. One of the most effective ways of evaluating your team’s expertise is to conduct a staff survey. The results will provide you with a good overview of your team’s strengths.

    After creating a project specification, the next step is to create a shortlist of nearshore candidates who have the specific skills that you require. Contact each company with your project specification and ask for a breakdown of how they’d approach the project. You can then choose to proceed with a company whose workflow processes seems like a good fit with your requirements.

  • Verify the Expertise of Your Shortlist

    Before committing to hiring a software development company, it’s important to carry out due diligence and ensure that they can back up claims of their expertise. As the first point of contact, you should consult their website and read their case studies. You may also want to contact companies that they’ve worked with previously to verify the quality of their work.

    You should then double check their reputation in the marketplace by reading reviews on third-party websites and checking their social media channels.

  • Implement Project Management Processes

    Project management tools play an important role in organizing and tracking the progress of your nearshore project. Using tools like Basecamp, Jira and Trello improve overall communication with your development partners and ensure that milestones are met. An organized workflow is crucial. Project managers and team leaders should also be assigned to ensure that tasks are completed on time and individual responsibilities are met.


Before narrowing your search for a nearshore software outsourcing provider, make a wider assessment of the country you plan to outsource to. Positive indicators include a high level of digital skills education, a strong technology infrastructure and good English language skills.

Latin America is one of the fastest-growing regions for software development outsourcing. 

Colleges and universities have a strong focus on digital skills and the region has strong links to the United States. Latin America also has good English language skills with an English Proficiency Index (EPI) average of 50.33

You should also consider the country’s reputation for business culture and whether there is active government support for the outsourcing industry. 

Once you’ve settled on a region, you should focus on what individual providers can offer. A good nearshore provider will be able to demonstrate a modern, disciplined approach to software development. Ideally, they should be able to demonstrate successful long-term engagements with other companies. 

From the beginning of your partnership, the focus should be on quality assurance, with high test coverage and successful integration and delivery. By emphasizing the need for open communication, the likelihood of establishing a long-term partnership is greatly increased.

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