Near Contact. What Is Offshore Software Development and How To Do It Right?

septiembre 24, 2021
/Nearshore IT

What Is Offshore Software Development and How To Do It Right?

Without a doubt, the tech sector has become extremely crowded. Industry analysts predict that the world will be home to more than a million software enterprises within the next decade, thanks to a surge in digital start-ups. Almost half of these enterprises are concentrated in Western Europe and the United States. The level of competition has never been higher, operating costs are constantly increasing, and talent is becoming increasingly scarce. 

Offshore software development services have emerged as a viable option for Western companies seeking to compete in a competitive and expensive industry. If you’re thinking about using this method for your upcoming venture, keep reading! This article will provide a comprehensive rundown of this outsourcing strategy, its benefits and drawbacks, and a few suggestions to help you find a trusted service provider. 

What Is Offshore Software Development? 

Offshore software development is a method of creating software solutions in which the product owner contracts all or part of the development work to a third-party agency. The contracting firm is based in a different country or continent. 

The primary reasons for taking this strategy are usually a scarcity of experts with the necessary qualifications or a shortage of human resources for software development. Furthermore, companies can boost their productivity and strengthen their technical capabilities without unnecessary pressure, difficulty, or cost resulting from decreased overhead expenses, a large talent pool, and the ability to scale swiftly. 

When Is It Appropriate to Recruit an Offshore Software Development Team? 

The following are some instances where it would be advantageous for companies to contract their software development to offshore agencies.  

Your Operating Expenses Are Out of Control 

Engineers are currently the highest-paid professionals on the planet. Employing local talent in the West entails paying top dollar, with employee compensation representing more than half of a typical business’ fixed costs. That’s only for the paycheck! 

When you factor in other employee benefits like travel allowances, insurance, and annual bonuses, the operating costs skyrocket. Instead, you can save a great deal of money and boost your profit margins without sacrificing quality by initiating offshore development. 

You Aren’t Scaling Quickly Enough 

No company wants to be in a situation where they have to reject profitable opportunities for growth because they lack internal capacity. However, this is very likely to occur without the correct technical team in place. 

Contracting your software development to an external provider will not work if you are searching for a long-term strategy. You’d want to scale your team quickly. Offshore development can be highly beneficial in this situation. 

With offshore development, you have access to a large pool of highly competent engineers who are not hired on the side but a company extension that adds value. They’ll stay a part of your company for years to come, allowing you to undertake more tasks and earn more money. Furthermore, since the skilled workforce in countries like Mexico is extensive, you’ll never have to be concerned about a lack of talent. 

The Benefits and Drawbacks of Offshore Software Development 

Many businesses feel that outsourcing is essential to their success. However, before making the final decision, you need to weigh your options. Here are some of the benefits and drawbacks that you might experience with offshore software development. 


  • Less cost: Employing remote programmers might help you save money. They’ll be paid less than in-house developers, and you won’t have to invest in buildings, utilities, or equipment. 
  • Professionals with talent and expertise: Professionals from many countries make up a diverse talent pool. They are tech university graduates continually honing their skills and participating in numerous IT conferences and contests. 
  • Management with a sense of balance: Management of project developers is in the hands of the customer. You have complete control over how many and which developers you require. However, since the offshore software agency will assist you, it will not be tedious. 

Potential Drawbacks 

  • Communication problems: Considering the time zone differences, communication may be slowed at times. This is more about dealing with concerns quickly, but various current communication methods are available, including video chats, email, and even instant messaging. It will simply demand a little extra planning and cooperation. Fortunately, countries like Mexico are close enough to home for this not to be an issue. 
  • Cultural difference: Due to cultural differences and varying work ethics, it is advised that you consider this factor. The Latin American perspective is relatively similar to the United States, although some Asian companies have failed to develop communication. As such, this does not pose much of a problem if you choose nearshore staffing from Mexico. 

Factors to Consider When Picking an Offshore Software Development Partner 

Keep the following considerations in mind while selecting the best offshore software development contractor for your firm, and use the list of essential steps to help you make your decision: 

  1. Be aware of your objectives: You should first figure them out, then decide which technology you’re interested in and what outcomes your business anticipates. 
  1. Look for a reputable service provider: Seek out a seasoned offshore software development firm. They don’t have to be experts in all areas at the same time. However, their programmers must be an expert in your chosen field. 
  1. Examine references: Examine ranking aggregators and their corporate site for details on past projects, as well as contacting the company’s representatives. 
  1. Safeguard your data: Data protection is essential when a contractor has access to a customer’s information. Any outsourcing contract should include a non-disclosure agreement and rules governing how IP is handled to avoid security breaches. 
  1. Maintain consistent communication: Maintain contact with your contractor, provide direction, and retain control over the development process. A key component of success is effective communication. 

The Bottomline 

There are many choices for growing your business in today’s software market. If you have a good understanding of offshore software development and its benefits, you can make your own decision. This article defines what offshore software development is, its advantages and drawbacks, and how you can do it right for your company. Just keep what we’ve shared in mind, and you’ll soon be able to leverage this strategy for growing your business! 

Mexico is one country that can provide skilled offshore software developers. Due to its highly talented workforce and proximity, Mexico is an excellent fit for U.S. companies because no cultural, linguistic, or time restrictions could hinder a project. To learn more about nearshore staffing in Mexico, contact us today! 

For more information on how Near Contact can help you access the pool of IT skills you need, email us at 

About Near Contact  

Specializing in digital transformation, software development, and mobile apps, Near Contact attracts and retains the top talent from across Mexico to support US enterprises and service providers. With over 20 years’ experience matching the right talent for each client and project, Near Contact’s flexible, hybrid outsourcing model offers fast access to a highly-skilled, scalable resource pool—delivering your project, your way.

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