Choosing the Right Nearshoring Destination: Factors to Consider

Nowadays, most businesses need software development services at some point to stay innovative and keep up with digitalization. Hiring an in-house team is not always the best solution, especially if they only need experts for certain projects or periods. Luckily, there are plenty of alternatives to traditional hiring. Software outsourcing, for example, has become a popular approach exactly for that reason. It involves contracting an external team of software developers to work on a specific project. The process of nearshoring, which is part of outsourcing, means outsourcing to a nearby country. 

If you want to know more about the practice of nearshoring, its advantages, and factors to consider when picking a nearshoring destination, you’re in the right place. Let’s get started!

Why Choose Nearshore Software Outsourcing? Key Advantages

The key reason companies turn to nearshore outsourcing is to save on costs. They get to do that by outsourcing to countries with lower living costs and also avoid the expenses that come with in-house hiring, like recruitment, training, or benefits. Nearshore outsourcing comes with a lot of flexibility cost-wise. 

Outsourcing is great in itself, but if you want to have a close collaboration and partnership with your external team, nearshoring might be a better fit for you. This way, you can benefit from proximity, real-time collaboration, and more in-person visits which can help build trust and overall better project management. 

When you choose to outsource to a nearshore location, chances are, your outsourcing partner will share your cultural norms and business practices, making cooperation much easier from the beginning. Cultural similarities also lead to understanding each other better. 

The legal side of nearshoring can be more hassle-free when you choose to outsource to a nearby country or location. There might be some legal frameworks in your country that are also valid in the outsourcing partner’s country as well, making collaboration easier and reducing potential risks from a legal point of view. 

Working with a nearshore outsourcing software team, you get to enjoy flexibility and scalability. Do you only need a team to help out with some software tasks for the next 3-4 months? No problem! With nearshore outsourcing, you can adjust your team as you need with flexible contract terms. 

How to Choose a Nearshoring Location? Key Factors

So, you have decided to go with the nearshore outsourcing strategy as the next step. Now, it's time to find out which nearshore destination fits your requirements best. Let’s go through some general tips and ideas to help you decide on the destination.

Cost savings are an important part of any outsourcing approach. Make sure to do in-depth research to find locations with lower labor costs and plenty of IT talent. 

To make sure that there is a wide pool of talented specialists available in the country, take a look at the local education and training systems to see if they produce the skills your business needs. For example, if you need expertise in AI and machine learning, the chosen nearshore destination should offer specialists in these areas. 

For a successful collaboration, being able to visit your nearshoring partner and meet in person strengthens the professional relationship. Time zone compatibility will lead to better real-time communication and overall collaboration. 

Language barriers can often lead to misunderstandings in outsourcing partnerships. Make sure to find a team that’s proficient in English to avoid communication barriers. Most countries in Eastern Europe have strong English language skills, which can make them a reliable choice.

A nearshoring destination with a reliable tech infrastructure is another important factor when it comes to choosing an outsourcing partner.  Modern communication tools and cybersecurity measures as well as fast internet connection are all part of that. These all improve collaboration and communication. 

It’s highly recommended to do detailed research regarding the local laws and regulations of the nearshoring destination to understand how to do business with your outsourcing partner. For example, destinations in the European Union (EU) all follow strict data protection laws which help your information stay safe. 

Why Consider Romania as Your Next Nearshoring Destination

Romania has been a favored nearshore and offshore outsourcing destination in recent years. According to Statista, the IT outsourcing market in Romania is expected to generate $415.20 million in 2024.  What makes it outstanding is that it has highly skilled IT talent and a strong education system with an emphasis on software development, cybersecurity, and AI. 

Compared to other European countries, Romania offers competitive rates for IT outsourcing services, while maintaining high quality. For companies prioritizing smart budget allocations, Romania is an ideal destination.

Most IT professionals in Romania speak English fluently, so language or communication barriers are not an issue. Romania has cultural similarities with Western European countries, meaning that there’s less chance for misunderstandings. The Eastern European time zone in Romania is also favorable since it aligns well with most Western EU countries, which is great for real-time collaboration. 

Romania is one of the top countries when it comes to fast and reliable internet connectivity. Its constantly growing tech ecosystem and IT community make it an attractive destination for outsourcing software projects. This country is home to many tech startups and IT companies, with the biggest tech hubs in cities like Bucharest, Cluj-Napoca, and Iași. 

What Sets the Best Nearshoring Destinations Apart?

Finding a great nearshore outsourcing destination that fits your needs doesn’t need to be a long and complicated process when you keep a couple of factors in mind. By doing this, you will have a great outsourcing experience and a reliable IT partner helping you succeed. 

Remember, you want to work with a team that prioritizes constant communication and regular updates, not just when something goes wrong in the project. 

Make sure that the team you want to work with takes data protection as seriously as you do. The nearshoring destination should comply with international standards like GDPR, and implement measures to safely store data. 

Cultural compatibility is not just about speaking the same language. It’s more than understanding each other’s way of working, communication and resolving problems together are all part of cultural compatibility. 

Think about the possibility of a long-term partnership. If things go well with your outsourcing team, it’s good to maintain a strong relationship with them, because they might help you with future projects. A reliable team that knows your business processes well, can be a valuable asset to your company.

To keep your company growing and progressing, choose partners that also prioritize that and keep up with the latest tech updates and trends. This is important to implement modern solutions into your tech projects. 

Conclusion

Nearshore outsourcing is a popular practice worth looking into if you’re looking for partners located not too far away from you. Similar time zones, cultural compatibility, and accessing strong IT talent at competitive costs are all advantages of nearshore IT outsourcing. Eastern Europe is a favored destination for these reasons, especially Romania, where you can find thriving IT hubs, a fast internet connection, and English-speaking professionals. 

Choosing the right nearshore IT destination is a good investment in your business whether it’s a short-term or long-term collaboration. Bringing an external team to work on your IT project is a great way to gain fresh insights and perspectives, and take your project to the next level.