It’s a fantastic time to be in the software development market! With millions of apps hitting the stores every day, you’re sure to make returns. More brands are adopting software development skills to gain an edge in the industry. And if you’re one of them, you’re probably considering nearshore software development.

Well, you’re probably not the only one, because, let’s face it, software development has gotten expensive. So, you’ve probably heard of it as an option and may be considering it for your project. But how much does software development cost? Does nearshoring really cut it down? And how can you make the most of it without sacrificing quality?

Nearshore Software Development: The Basics

Nearshore software development means outsourcing IT services to teams in neighboring countries. Don’t confuse it with offshoring. Nearshoring involves hiring services from countries in close proximity to the brand in question. That way, their culture and language similarities make communication easier.

Customers of nearshore software development teams, unlike offshoring, can make house calls. Since their locations aren’t so distant, you can run personal assessments of your ongoing project. So, you stand to gain major benefits, so long as you balance its factors with your needs.

Factors That Determine Nearshore Software Development Cost

Software development is extremely expensive. Based on the client’s requirements and budget, an average project could cost between $50,000 and $250,000. With such a huge amount, it’s no wonder many seek ways to slash expenses. This explains why there is a significant demand for nearshore software development services.

Before choosing a nearshore software development company, note that it’s subject to conditions. These factors influence your decision to determine if you’ll save any money.

• Project Requirements: If you’re running a complex project, then you’ll spend more on developers. This is normal, as advanced software necessitates specialized skills and technology. Also, the timeframe of your project will factor in the cost. Software development services charge by the hour, especially if externally sourced.

• Experience and Skill Level: When you pick a team from reputable services, the cost of software development may be steep. But they’ll also come with a guarantee of quality results. You could also consider a less expensive team if they have solid proof of reference.

• Location: The whole point of nearshoring is to hire help from neighboring locations. But note that even this can be a cost factor. For example, you could pay more for a team in another US state than for one in, say, Mexico. In this case, the country’s low cost of living is the reason for such a price, not the work quality.

• Communication: The fewer language barriers your team has, the better communication. Plus, you’ll spend less on potential project redesigns. That’s why the best option is to pick nearshore teams from countries with similar cultures. You also want to consider timezone compatibility, so feedback is smooth.

• Regulations and Compliance: You want your selected nearshore team to come from a country with favorable compliance requirements. This is where legal advice comes in handy. Master the regulations of both yours and the nearshore location. This way, you won’t face legal and financial issues during the project.

How Nearshore Software Development Cuts Cost

Tracking these factors may make nearshore software development seem scary. However, once you understand these factors, you can significantly reduce project costs. Though the perks aren’t the same across all projects, you still stand to experience these cost-saving advantages;

Reduced Developer Pay

Nearshore software development services became appealing because home-based experts grew pricy. One main reason is that the standard of living in the United States has risen recently. Plus, as a top-tier skill, software development commands heavy fees. But the case is different in neighboring developing countries.

Take Latin America, for example, where the cost of living is much lower. That means you can spend less to hire skills from that region and still get excellent results. By choosing nearshore development, you could save up to 80% off developer salaries alone. The combined effect of the differences can save you a lot of money.

Higher Efficiency

Most nearshore software development services are familiar with handling multiple projects. Therefore, you can fully concentrate on your project, as this is a common practice in their field. This dedication and focus spill into the project’s efficiency, so you get better results at the end.

Additionally, because communication is a top priority, nearshore development teams sync their work hours. This cuts the chance of redesigns or errors due to miscommunication. These efforts maintain high levels of productivity throughout the project’s timeline.

Reduced Overhead Expenses

Salaries aren’t the only places where software development projects can drain you. Office spaces and tools can also pull in extra costs. Furthermore, maintenance, staff welfare, and logistics all contribute to the company’s daily expenses.

But a nearshore software development company doesn’t come with such baggage. Because they are an established firm, you never have to incur these expenses. They cover all necessary costs from the start, resulting in significant savings compared to in-house teams. Plus, this adds a major cut to your software development costs.

Reduced Recruitment Costs

Owning an in-house development team means spending extra on staffing. From new recruitments to finding replacements, the cost of software development increases. Then, you also have to train recruits and upgrade old employees with updated training courses.

But with nearshoring, you don’t need any of these. What you get is a ready-made team of experts waiting to take orders. Their familiarity with such projects eliminates the need for adjustment time. You minimize your software development cost by spending less on recruitment.

Faster Project Completion

While in-house teams may take time to fully understand a project, nearshore teams jump right on it. And since they share similar time zones, you match this efficiency with solid communication. This could speed up your project’s timeframe, so you can launch earlier than planned.

This also gives nearshore software development an edge over offshoring, where time difference is a major problem. Plus, the huge web of expertise means you get wider options for your project. The sooner you assemble a skilled team, the quicker you can complete your project. Nearshoring offers this advantage more than any other method.

How to Cut Costs in Nearshore Software Development

Knowing why you should choose nearshore software development isn’t enough. You also need to master how to make it work for you. After all, you’re dealing with major costs and want to be sure you’re slashing at the right areas.

Create an Engagement Plan

All nearshore software development teams don’t look the same. So, you’ll need to pick one whose plan works on a model that suits your project. You have a variety of model options to choose from, including the following:

• Staff Augmentation: In this scenario, a nearshore company expands an existing software development team. The expansion could be in the form of size, skill, or both. It’s especially useful for custom software development.

• Dedicated Model: In this model, a team functions as a nearshore extension of the hiring firm, handling one or more projects. Dedicated model teams are usually small, featuring a project manager, a few software engineers, and a UX designer.

• Project-based Model: Compared to the others, this option is more limited. Typically, a single project assigns one or more nearshore developer roles.

Make Realistic Choices

Selecting nearshore software development means you’re making an external commitment. That’s why, before the contract, you must commission options based on practical considerations. Ensure the proven reputation of the company before selecting an affordable one. Otherwise, you’ll spend more on damage control than the project itself.

Also, be clear and to the point when expressing your project’s requirements. Don’t give vague directives, or you’ll spend time and resources reestablishing your goals.

Recognize Hidden Costs

A nearshore software development company frequently states your project’s overall cost. This may not be the only place you spend money. Some projects may require you to hire a manager in your stead to keep up with the progress. Other times, you’ll plan personal visits to the nearshore company. And even when you don’t, you still spend time communicating and contributing to the project’s growth.

When considering nearshoring, keep in mind the costs of these activities. Visiting the firm will incur travel costs, and hiring a project manager means extra salaries. Also, keep in mind that each collaboration period will cut into your productive time.

Analyze Cost-Saving Potential

This may be the most important decision you’ll consider in nearshore software development. Despite its attractiveness, you must verify whether it will result in substantial cost savings. The best way to confirm this is to compare the total cost of both nearshore and in-house development.

Start by listing every aspect of each development process, and leave nothing out. While nearshoring does offer huge benefits in speed and efficiency, you must decide if the cost difference is something you can accept.

How We Can Help

Making software costs a lot of money, but it doesn’t have to drain your bank account. We’ve learned the art of nearshore development at North South Tech, which can help you save a lot of money without sacrificing quality.
We want to save money, but that’s not our only goal. Our goal is to improve the efficiency of your job. Our developers’ plans are in sync with yours, so there is less chance of misunderstandings and the need for expensive changes.
With us, you don’t have to worry about the costs of office space, tools, or ongoing training that come with having an in-house team. You have a group of professionals who are ready to go and can get right to work.
North South Tech’s nearshore development could be the catalyst for you to stop spending too much on your software project and start saving money. Let’s talk about how we can make your next software project a cost-effective success.
Want to get the most out of your software development budget? Let’s help you save money. Get in touch with North South Tech.