Nearshore software development can be a great strategic choice for your business.
Lower development costs, minimal time zone differences (compared to offshore development), and fewer regulatory hurdles make it an attractive option for businesses of all sizes.
But, it’s not all sunshine and rainbows – you can still face significant hurdles, if you’re not careful.
With that in mind, we’ve compiled this list of the 6 major challenges in nearshore development you need to know about and some practical tips on how to solve them.
Let’s dive in!
Table of Contents
Top challenges in nearshore development
Here, we’ll cover the top challenges in nearshore development and share some tips on how to solve them.
Poor communication
Here’s a staggering statistic – ineffective communication costs U.S. businesses up to $1.2 trillion every year in wasted labor hours.
Both executives and employees agree it’s a major challenge – 86% of both say a lack of collaboration and ineffective communication are the main reasons behind workplace failure.
And with nearshore development, effective communication is even harder. Language barriers and cultural differences can make it much more difficult.
So, what’s the solution?
The best thing you can do is double down on transparent and open communication. Here’s a short video by DECODE’s CEO, Marko Strizic, explaining why transparent teams win:
Also, make sure you have clear communication guidelines in place before you start working with your nearshore team.
Talk to your service provider and agree on a unified set of communication tools. Make sure to use both asynchronous and synchronous communication methods.
Good communication is the best way to set yourself up for success.
And that’s why you can’t ignore it.
The problems poor communication creates
Project delays – When teams don’t communicate effectively, tasks get misunderstood, leading to delays and missed deadlines.
Increased costs – Miscommunication often causes unnecessary rework, wasting time and resources.
Eroded trust – Poor communication creates frustration and damages your relationship with your nearshore team.
How to solve them
Encourage open communication – Create an environment where people feel comfortable asking questions and giving and receiving feedback.
Share detailed documentation – Provide clear instructions and guidelines so every member on your nearshore team knows what’s expected of them.
Hold frequent meetings – Regular check-ins will help you address any concerns the team might have and keep everyone aligned.
Managing remote teams
Remote work setups often struggle with reduced oversight and weaker team cohesion.
And this is even more true when you work with a nearshore team.
Geographic distance (though it’s not as huge as with offshore teams) and a lack of face-to-face interaction make effective team management more difficult.
So, what can you do to more effectively manage your nearshore team?
First, you need to clearly define your goals and expectations. Every team member should know their responsibilities and exactly what you expect from them.
Also, you need to invest in solid project management. Have a designated project manager who will manage the team from your end.
But, remember – trust is the most important component of successful management.
Share project updates, company goals, and setbacks openly. Your nearshore team will trust you more if they feel included in the bigger picture.
And they’ll work better, too.
The problems ineffective remote team management creates
Burnout and low morale – Poorly managed remote teams will feel overworked and disconnected, which will impact their motivation.
Low productivity – Without clear oversight, your nearshore team’s priorities will get lost and their productivity will plummet.
High turnover – Frustrated employees are more likely to ask to be reassigned, which can cause delays on your project.
How to solve them
1 team, 1 project model – Make sure the team you hire is fully dedicated to your project and isn’t employed on any other projects at the same time.
Hold regular check-ins – Hold regular meetings and check-ins with the team to spot and solve any issues early.
Set clear goals and expectations – Define what success looks like and what you expect from the team at the start to avoid confusion.
Cultural differences
While cultural differences are smaller when you outsource to a nearshore destination, they can still cause friction.
If you’re not careful, different communication styles and approaches to work can even completely derail your project.
A bad cultural fit is one of the main reasons why outsourced projects fail.
So, how can you bridge this gap?
Well, you need to understand your nearshore team’s culture. And that’s where cultural dimensions come into play:
Power distance – Teams from high power distance cultures expect hierarchical decision-making, while low power distance cultures prefer a more egalitarian approach.
Individualism vs. collectivism – Individualistic cultures focus more on personal responsibility, while collectivist cultures prioritize group harmony.
Uncertainty avoidance – Cultures with high uncertainty avoidance don’t do well with ambiguous instructions, which makes detailed planning essential.
So, make sure you adapt your communication style based on these factors.
This will minimize any misunderstandings and confusion.
And that’s key to success.
The problems cultural differences create
Misunderstandings and conflicts – Different ways of working can lead to unnecessary tension and friction.
Project delays – Adapting to unfamiliar practices often takes more time than expected and can lead to delays and bottlenecks.
Team frustration and low morale – When cultural differences aren’t managed well, you risk your team members getting frustrated and losing.
How to solve them
Adapt your communication style – Adjust your communication to your nearshore team’s cultural preferences to minimize the impact of cultural differences.
Introduce a buddy system – Pair each member of your nearshore team with someone on your in-house team to build understanding and trust between the 2 teams.
Create an inclusive environment – Make sure everyone feels heard, respected, and valued to minimize the impact of cultural differences.
Team integration
Team integration can make or break a nearshore collaboration. .
And it’s one of the biggest challenges in outsourcing in general.
One reason for this is that the longer you wait to fix a problem, the more expensive it is to fix.
And that’s not idle talk. Fixing bugs or defects post-deployment can be up to 100x more expensive than fixing them at the start of development:
Now, we want to make an important point – low quality standards have little to do with your team’s location.
For example, if you’re based in the U.S. and hire a team from Mexico, that doesn’t mean they’ll do low quality work by default.
It’sall about hiring the right people – high-caliber engineers are high-caliber engineers, no matter where they’re located.
What you need to do is set clear quality standards and stick to them.
And once you find a company that’s the right fit, you won’t have to worry about quality again.
The problems low quality standards create
Higher costs – Fixing low-quality work means spending more time and money later.
Product failure – Poorly made software can fail in the market, costing you opportunities.
Loss of customer trust – Bugs and glitches drive customers away and damage your reputation.
How to solve them
Set clear quality standards – Define quality benchmarks and what good work looks like before starting the project.
Choose the right partner – Work with teams that have a strong track record.
Automate testing – Use tools to catch bugs early and avoid major issues later.
Nearshore development challenges: FAQs
You should choose nearshore software development because:
You will lower development costs
You’ll gain access to a wider talent pool
You won’t have to deal with time zone differences
To pick the right nearshore software development company, you need to:
Review their portfolio and case studies
Evaluate their tech stack
Check their reviews
Review their development process
Look into their pricing
Also, you should pay attention to:
Cultural and language compatibility
Their quality and expertise
Security and IP protection
Your costs will primarily depend on the hourly rates in the target country, project complexity, and the pricing model you agree on.
But, your costs will generally be lower than with onshoring and higher than offshoring.
Looking for a reliable nearshore development partner?
Do you want to take a crack at outsourcing development to a nearshore destination but can’t seem to find a reliable partner?
Well, you’re in the right place.
We’re an EU-based, high-caliber software development company and we’ve got 12+ years of experience solving tough problems across a wide range of industries.
If this sounds like the right fit for your project, feel free to reach out and our team will be happy to set up a meet to discuss your needs in more detail.
A seasoned software engineering executive, Marin’s role combines his in-depth understanding of software engineering processes (particularly mobile) with product and business strategies. Humbly boasting 20+ years of international experience at the forefront of telecoms, Marin knows how to create and deliver state of the art software products to businesses of all sizes. Plus, his skills as a lifelong basketball player mean he can lead a team to victory.
When he’s not hopping from meeting to meeting, you’ll find Marin listening to indie rock, or scouring the latest IT news.
