Nearshore Outsourcing: Everything You Need to Know

Thinking about outsourcing software development but not sure where to start? You’re on the right page — we’ve been helping businesses across North America and Europe for over 10 years.

With a distributed dedicated software development team in Ukraine and other European countries, we’ve worked on both nearshore and offshore projects. Along the way, we’ve delivered 200+ successful solutions and earned a 94.12% customer satisfaction rate. So, when it comes to nearshore outsourcing, we know what works (and how to avoid the headaches!).

Recently, we had one of our regular chats with our clients from the UK and gathered feedback on their nearshore experiences with us. They shared why they chose the nearshore model, what worked, what didn’t, and what they’d recommend to anyone new to this.

Based on the real fears, challenges, and needs our clients shared with us, we put this guide together. Here, you’ll find the most up-to-date, practical insights on nearshore outsourcing, including:

• When nearshore software development is your best choice
• Risks to watch out for when picking a nearshore partner
• How to ensure high-quality service
• Tips for smooth communication and cost management

Get yourself comfy, and let’s explore everything you need to know about nearshore outsourcing.

What is nearshore outsourcing?

Nearshore outsourcing means partnering with a service provider in a nearby country or region. Unlike offshore software development outsourcing (far-away locations) or onshore (within your own country), nearshore outsourcing benefits and standout features include:

• Similar time zones
• Cultural compatibility
• Competitive rates

Simply put, nearshore software development is about finding remote developers who can work as if they’re almost next door. What’s the difference between outsourcing and nearshore? Basically, nearshoring is a kind of outsourcing limited to vendors in geographical proximity (like from the UK to Ukraine or Poland and from the US to Mexico or Argentina).

Why do businesses choose the nearshore outsourcing model? Our UK-based clients highlight these two reasons in particular:

• Speeding up product development by hiring skilled nearshore developers who click with their existing teams
• Staying within time and budget by working with nearshore partners in close time zones yet more affordable rates

So, nearshore IT outsourcing gives you skilled help close by — without the time zone or cultural barriers.

Reasons to choose nearshore outsourcing

Why else do companies go for nearshore outsourcing? Our clients have shared some valid reasons, but there are plenty more. And those can be exactly what you’re looking for — from cost savings to better communication. Let’s discuss them one by one:

Cost savings and budget predictability

Nearshore software development outsourcing is a big win for your budget. How come? From what our UK clients have mentioned, there are a few things that really help save on costs.

The first factor is flexibility. Need to scale your team up or down? No problem. With nearshore outsourcing, you’re not locked into rigid contracts — you can adjust as your project grows.

Then there’s productivity. Our developers bring 10+ years of experience across countless products, meaning they work faster and smarter, saving you time and money in the long run.

And let’s not forget meticulous budgeting. With realistic estimates and regular updates, there are no surprises — just complete control over how your budget is spent.

Simplified hiring and team extension

Scaling your team can be tricky, especially if your local talent pool is limited or costly — something we’ve heard time and again from our UK-based clients. Luckily, one of the biggest advantages of nearshore outsourcing is hassle-free staff augmentation or, in simple terms, team extension.

You get the talent you need, when you need it, minus the paperwork and long hiring times. And when your project winds down, you can just as easily reduce the team size.

Better communication and faster partnership start

When we first spoke to our UK-based clients, they didn’t specifically have nearshoring in mind — offshore seemed like a fine option. But once we started working together, they quickly realized the benefits of similar time zones and smoother communication.

Instead of spending weeks syncing up or adapting to huge time differences, you and your nearshore team can start working right away. You can jump on calls, get quick answers, and actually make your partners feel like an extension of your internal team.

Time-zone alignment

This is a big one. Like we said, with nearshore outsourcing services, you work with teams in similar or even the same time zones. This means you can collaborate in real time without the back-and-forth lag. You don’t have to wait for feedback overnight and move your project forward way faster.

Some of our clients initially considered working with offshore teams, like those in Asia, drawn by the lower rates. But when they factored in potential delays from the time gap, they decided to stick with nearshore — and never looked back.

Culture and language fit

Working with teams that “get” your culture is very productive. Nearshore developers are often more in line with your work style, communication, and cultural norms, so there’s less translation — literally and figuratively.

While we’re not native speakers, all our developers communicate directly with clients in the UK and US with no issues at all.

The result? Smoother project workflows, fewer misunderstandings, and ultimately, higher-quality collaboration.

Easier in-person visits

Want to meet face-to-face? It’s way more doable with nearshore outsourcing than an offshore team.

That said, in our 200+ projects, we’ve only had two in-person meetings with our clients. Both were to celebrate the successful launch of their apps. It’s not because we shy away from meeting. In fact, we’re always happy to make it happen when needed.

But here’s the thing: our processes are so clear and transparent that most clients don’t feel the need to travel. Regular video calls with our team create a sense of presence and trust, without the hassle of packing a bag.

Still, if in-person meetings are important to you, nearshore outsourcing makes it easy. And if not, we’ve got you covered with seamless remote collaboration.

Diversifying across markets

Think of nearshore outsourcing as adding an extra safety net to your business.

By working with nearby teams, you can dodge risks like economic turbulence, political storms, or unexpected natural disasters in your local market. It’s like having your eggs in different baskets — but the baskets aren’t too far away to manage.

Plus, it’s a low-risk way to dip your toes into new regions. Want to test a market before diving in? Nearshore outsourcing makes it possible without overcommitting.

Common concerns in nearshore outsourcing

We get it — outsourcing, even nearshore, comes with questions. When we talked to our clients, they shared some of their initial concerns. These are real questions, and here’s how we address them:

Will the quality of work be good enough?

Quality is one of the top fears in nearshore software development. But outsourcing mobile app development or any other task doesn’t mean you have to sacrifice your standards.

We handpick the top 1% of developers, so you’re not getting just any team — you’re getting your dream team. Once we’ve got the right people on board, we handle software engineer onboarding and make sure they’re a perfect match for the job and that we stay within budget.

Besides that, we kick off every project by understanding your needs fully. Once we’ve set the course, we stick to the plan until we deliver exactly what you want — no setbacks. We do it all by the book, following Project Management Institute standards.

And don’t worry, you’re never in the dark. You’ll always know where we are in the process, and if anything feels off, you’ve got the power to steer things back on course. Of course, we make sure everything’s smooth sailing, but it’s comforting to know you’ve got the wheel in your hands, right?

Will I lose control over the development process?

The truth is, you won’t. Actually, nearshore partners like us can make you feel more in control. Because we’re in similar time zones, you have full visibility over the project and can engage in daily or weekly check-ins. We keep everything transparent — you’ll have access to all the files, and we’ll stick to the reporting schedule we agreed on from the start.

Will the product meet my expectations?

You bet! First, we make sure we know exactly what you’re looking for. We study all the requirements, document the end goal, and get your thumbs-up before we start. Then, as we work, you’re in the loop every step of the way. Spot something that feels off? No problem — we’ll adjust right then and there to keep everything in line with your vision.

Take our client, BackupLABS, for example. They needed a web development outsourcing team they could trust to build their product without blowing their budget or needing constant supervision. We stepped in, helping them trim down the extras and focus on the must-haves. The result? A smooth, on-time delivery of a product that checked all the boxes — and working with an easy-to-reach nearshore team as a bonus.

Will my internal team be able to work with the code later?

That’s for sure. We make the project handoff smooth. Our dedicated development team provides clean, well-documented code, so your in-house staff can easily pick up where we left off.

Will I still own my IP?

Absolutely. You retain full intellectual property rights for everything we create together. Your IP is yours to keep and control, and we make sure all contracts reflect this clearly.

Will the nearshore company meet deadlines?

Don’t worry. We’re all about making sure your project meets deadlines.

First, we take a close look at your project, break it down into manageable pieces, and set clear timelines for each stage. Then, we give you both an optimistic and a pessimistic (taking into account the possible risks) estimate, so you know what to expect.

And the best part? You’ll always have a bird’s-eye view of how things are going, and we stick to our timelines: our projects are consistently within 10% of the planned schedule. Pretty solid, huh?

Best practices for seamless cooperation with a nearshore team

We’ve learned a lot from interviewing our clients, and this has helped us improve our processes and address concerns that really matter. Now, we’ll share the best practices for making your nearshore partnership run smoothly.

If you’re planning to outsource your development, look for a vendor with proven, time-tested processes – because your project’s success directly depends on this:

Communication and project management

To keep everyone aligned and confident throughout the project, the following methods work best:

• Tailored communication plan: Start by creating a communication plan. Specify the communication channels (Slack, email, etc.) and the frequency of updates.
• Regular progress updates: Having consistent status updates (daily, weekly, or biweekly) will help you track progress and prevent surprises. You’ll always know how things are moving along.
• Video conferencing: Scheduling regular video calls is a great way to resolve issues quickly. Video interactions also add a personal touch that emails just can’t provide.
• Customer success meetings: Hold regular customer success meetings to go over project goals, current challenges, and any changes in direction.
• Clear contract terms: Make sure the contract clearly outlines your outsourcing partner’s responsibilities, deliverables, and expectations.

Cost management

To help you stay within budget, your vendor should follow these best practices:

• Optimistic and pessimistic estimates: Look for both optimistic and pessimistic projections on timelines and costs to set realistic expectations.
• Risk management: Handle risk assessments to prepare for potential budget fluctuations and other hurdles.
• Budget reporting: Track costs closely by getting regular reports that compare estimated vs. actual expenses. This gives you visibility over the project budget at every stage.
• Scope creep control: Make it a habit to define and agree on the project scope early, with adjustments carefully considered before they’re implemented.
• Proactive communication on budget changes: If a change affects the budget, the vendor must notify you right away, discuss the options, and help you decide the best next steps.

In most cases, project estimates can vary by about 20%. Yet, with our cost management, it’s usually closer to 10%. We keep everything in check by tracking SPI (Schedule Performance Index) and estimating CPI (Cost Performance Index).

When handling nearshore outsourcing with us, you’ll get weekly or biweekly updates on budgets, and what’s been delivered so far, so you always know where things stand.

Development services quality

When outsourcing software development, you can ensure quality by choosing a vendor who offers:

• Industry standards compliance: Follow recognized standards (such as those from the Project Management Institute) to make sure the dev process is structured and accountable.
• Experienced developers: Work with a nearshore development team that brings diverse experience on various projects, especially for complex tasks.
• Transparent development process: Have a transparent process to assess progress at any time. Make sure documentation and code are always available, so you can review the work as it happens.
• Software testing life cycle (STLC) implementation: Use the STLC approach to catch bugs and issues early.
• Low churn rate: Low team turnover means your project is stable and focused on long-term growth. For instance, our nearshore outsourcing company had a churn rate of 5.5% in 2023, far below the industry’s average of 24%.

Just think about how important the quality of development services is — like with one of our UK-based clients. They came to us after a pretty frustrating outsourcing experience. They needed location tracking and route planning software, but their previous vendor just didn’t have the expertise to pull it off.

When they reached out, they were looking for a team that not only had the right skills but also kept them in the loop every step of the way. In the end, we delivered exactly what they asked for, on time and to their exact specifications.

Flexibility

The best partnerships are agile and adaptable to changes in scope, timelines, or budget. Here’s how to achieve that:

• Agile methodology: Follow Agile principles as we do to adjust your project quickly.
• Scope adjustment support: If your budget changes or your priorities shift, the right nearshore outsourcing partner can adjust the scope according to your current goals.
• Scaling: Choose a reliable nearshore outsourcing partner who can scale up or down as needed or offer niche experts for specific projects.

In short, these are the green flags you want to spot in a nearshore partner. Look for a team that’s always in sync with you, keeps you updated, and follows solid, proven methods.

To sum up

Nearshore outsourcing is a smart way to scale your business, speed up development, and save on costs — without the usual headaches. If you’re ready to give it a go, keep the pros and cons of outsourcing in mind and follow our best practices in cost management, communication, and collaboration to set your project for success.

Here’s the deal: if you like our approach, why not work with us? We’re a classic nearshore vendor for companies in Europe, but don’t worry if you’re based elsewhere. About 50% of our clients are from the United States, and over the years, we’ve perfected offshore software product development with companies that are 6+ time zones away.

And who knows? Perhaps, one day, we’ll be interviewing you, just like we did with our UK-based clients. Ready to take the next step? Consider software outsourcing to Ukraine — we’re here to support any of your ideas.