Suppose you have a terrific product idea but lack the technology, resources, and team to build one. 

What do you do?

Well, here’s your game changer – nearshore product development.

This strategy lets you hire specialists from a nearby country who will take care of every stage of product development. In turn, you’ll benefit from massive cost savings, access to high-quality tech talent, and faster turnaround times. 

Let’s discover more about nearshore product development, including how to pick a reliable partner and some mistakes you should avoid while selecting one

We’ll also let you in on a secret: the perfect nearshore partner for your product development needs!

Further Reading: Discover why you should Nearshore Software Development to Mexico

Explore 15 Best Nearshore Outsourcing Companies you can hire in 2023. 

This Article Contains:

What Is Nearshore Product Development?

Product development is the process of creating a new product or improving existing ones to meet consumer needs. It consists of a product’s entire life cycle — right from the conceptualization, design and development of a Minimum Viable Product (MVP) to the launch of the new product. 

Now, nearshore product development involves delegating these processes to a competent team in a nearby country. 

This clever business strategy lets you access expert tech talent, minimize developmental costs, and quickly scale your development team according to your project requirements.

A good nearshore product development service provider would typically offer these services:

  • User and competitor research: Competitor research assesses the strengths and weaknesses of competing businesses. Meanwhile, user research focuses on target users’ needs and pain points. 
  • Software development: It’s the process of designing, programming, documenting, testing, and deploying software products. This may also include building an MVP with essential features to gather user feedback before further refinement and expansion.
  • UX/UI design: The user interface (UI) focuses more on the user’s visual experience (for example, elements like navigation bars.) Whereas user experience (UX) design refers to all aspects of the interaction a user has with your product. For example, redesigning a mobile app to reduce the number of steps to complete a task can enhance the UX design, making it more efficient and user-friendly.
  • Quality assurance & software testing: QA focuses on establishing processes to prevent defects, while software testing involves actively assessing the software’s performance. This involves identifying bugs or errors and checking the overall functioning of the actual product. 
  • Project management: It’s the coordination of tasks, resources, and timelines to ensure the successful development and launch of a product. 

Hiring a reliable nearshore partner like Distillery would be your safest option. 

However, most companies use the terms “product development” and “software development” interchangeably. Some companies may say they offer “software development” but also offer other product development services like user research or QA testing.

Let’s look at the difference between product and software development in detail. 

How Is Nearshore Product Development Different from Nearshore Software Development?

We’ll compare them on the basis of scope, processes involved, stakeholders, and other aspects:

Nearshore Product Development

  • Scope: As we saw earlier, product development includes various stages like design, prototyping, pilot production, and launch of the new product.
  • Focus: Focuses on providing a solution to a customer’s problem.
  • Process: It involves methodologies and best practices like iterative design, user-centered design, lean development, agile, and continuous feedback to ensure your products meet user needs and market demands efficiently.
  • Team composition: A product development team consists of product managers, software engineers, UX/UI designers, and other roles needed for product development.
  • Stakeholders: Includes the client who requires the product, the nearshore development team, project managers, end-users, and any local entities or partners involved in the development process.
  • Communication: Requires extensive cross-functional collaboration between the nearshore team, client, and third parties.

Nearshore Software Development

  • Scope: The scope involves creating functional software that meets the client’s requirements. 
  • Focus: Focuses on delivering outputs (like a software tool or app features) that function according to the specifications.
  • Process: Follows software development methodologies like Agile, Scrum, Waterfall, etc. It includes software development services such as coding, testing, debugging, database management, and application architecture.
  • Team Composition: Includes a software developer, tester, software architect, UX/UI designer, and more.
  • Stakeholders: Nearshore software outsourcing usually involves the client who requires the software, the end-users, and the development team.
  • Communication: Requires strong communication and collaboration between the nearshore development team and the client.

Next, let’s check out the different types of nearshore product development models.

3 Key Types of Nearshore Product Development Models

Depending on your project requirements, you can opt for:

  • Staff augmentation: This is an outsourcing model where you can extend your existing in-house product development team by hiring a developer from a neighboring country at lower costs. 

For instance, you can hire nearshore developers from Latin American countries like Mexico to work on your product along with your in-house team in the United States. 

  • Dedicated teams: This outsourcing strategy lets you hire an entire team of specialists to work exclusively on a specific product or some aspects of it, like user research and design. Dedicated teams are best suited for long-term, large projects.  

It may consist of UX/UI designers, QA engineers, software engineers, and more based on your project needs.

  • Project-based nearshore outsourcing: Here, you can delegate an entire project (from start to finish) to a nearshore team. Your nearshore partner will handle the entire project and deliver a final product according to your specifications.

Now, you may be wondering if nearshoring product development is better than offshore or onshore outsourcing.

Let’s compare all the different outsourcing models. 

Nearshore vs Onshore & Offshore Product Development Outsourcing Models

The benefits and trade-offs of these outsourcing models to find out which one best suits your business: 

Differentiating FactorsNearshoreOffshore Onshore
Geographical ProximityNeighboring countryGeographically distant regionWithin the same country
Ease of CommunicationEasier, due to similar time zone and cultureOffshore development might require more coordination due to differences in time zones and cultureEasiest, as they share the same time zone and culture
Cost EfficiencyMore cost-effective than onshoringMost cost-effective of the threeLeast cost efficient
Talent PoolAccess to the talent pool in several nearby countriesOffshore outsourcing lets you access a global talent poolAccess to a limited talent pool within the same country
Flexibility and ScalabilityA nearshore development team is very flexible and makes it easy to scale your team up and downAn offshore development team can support scalability but may have security risks and quality control issues due to geographical and time zone differencesAn onshore software development team is flexible and can be scaled up and down but at a much higher cost
LegalitiesNeighboring countries may be more familiar with your country’s laws and potentially have similar legal frameworksMay need to navigate and figure out international laws to avoid legal complications and data security issuesEasier to manage as they share the same law
Speed to MarketFaster due to fewer cultural and linguistic barriers and overlapping time zonesCan be fast as you can leverage 24-hour development cycles due to time zone differencesFastest among the three due to zero cultural and linguistic barriers. 

As nearshore product development clearly has its strengths, let’s jump straight into what you need to look out for when selecting a service provider.  

7 Aspects to Check When You Choose A Nearshore Product Development Team

The nearshoring partner you choose may dictate how successful your product development process will be.

Some factors you should look out for are:

  • Good track record: Check your potential nearshore partner’s portfolio to ensure they have the appropriate experience, expertise, and resources to handle your projects. 

You can also check testimonials online, awards, or take direct feedback from previous clients to validate the company’s services. 

  • Technical expertise: Evaluate the qualifications, skills, and experience of the product development team working on your project. Likewise, find out about the technologies, programming languages, frameworks, and tools the nearshore outsourcing company uses. 

To be sure, conduct a small test project before committing to a larger project. This will help you assess the team’s technical proficiency and how well they align with your project goals.

  • Product governance framework: To evaluate a company’s product governance framework, look into its product governance documentation. It may consist of processes, guidelines, and policies related to project management. 

Ask how they identify, assess, and mitigate risks. A strong governance framework includes strategies to manage potential issues that may arise during the project.

Most importantly, check whether their product governance framework can adapt to your project needs. You can ask for a walkthrough of their product governance framework to gain a better understanding.

  • Quality Assurance practices: Ensure the nearshore software development service provider offers automated QA testing for consistent and repeatable testing processes. Also, look into their process for tracking and reporting bugs identified during testing. 

Additionally, check if they offer QA tests like usability testing to ensure your software is user-friendly and regression testing to verify new features don’t break your existing software.

  • Apt technology and tools: Before shortlisting a nearshore outsourcing company, assess if the tech stack and tools offered by the company align with your project needs. Also, check if they partner with industry giants like GitHub or Google Cloud Platform. 

Plus, ensure they use the right communication and project management tools for successful nearshore project execution.

  • Data security and compliance policies: When choosing a nearshore country, research their data protection laws to ensure your data is safe and avoid legal complications. For instance, if you breach the Mexican data protection laws, you may have to pay fines up to 20,700,000 Mexican pesos (USD 12,37,120).

Likewise, the company should also follow certain standard compliance policies like the PCI DSS and ISO 2700.

Simply ticking off these boxes isn’t enough, though. 

Let’s check out a few common pitfalls as well.

6 Mistakes To Avoid When Nearshoring Product Development

From having an improper scope of work to insufficient onboarding time, here are a few things you should avoid:

  • Unclear product requirements: Well-structured project requirements form the foundation for a successful project. If your project requirements are vague, your product may have unnecessary features or miss important functionalities. 

It also affects other areas of product development, like QA testing. For example, testers may not know what to test, resulting in inadequate test coverage and potential defects in the final product.

  • Not having a proper budget: Without a proper budget, it may be difficult to allocate time, manpower, and other resources needed for successful product completion. It can also cause delays or project failure if critical tasks go unfunded or unexpected costs arise. 

A proper budget may also help you identify potential risks. For instance, when your resources are limited, a budget can help you prioritize tasks and features based on their strategic importance and potential impact on the project’s success.

  • Lack of a detailed nearshoring contract: Lack of a proper contract can result in misaligned expectations between the client and the nearshore development team. Both parties might have different assumptions about project timelines, functionalities, and quality standards.
  • Not having a proper scope of work (SOW) allows scope creep: A SOW clarifies the project’s objectives, scope, and specific requirements, preventing potential scope creep.

    Scope creep refers to uncontrolled growth in a project’s scope, like additional tasks or features. This can extend project timelines and lead to budget overruns. 

Plus, scope creep can make a project deviate from the original business objectives and user needs, resulting in a product that doesn’t deliver the intended value. 

  • Not allocating enough time for onboarding: Without proper onboarding, new team members may take longer to understand the project’s context, goals, and technical aspects. This might lead to misunderstandings or errors in product development processes.

In a nearshore setup, cultural and language differences can amplify these issues, affecting collaboration and integration. If new nearshore developers feel disconnected and unsupported, they might seek better opportunities elsewhere, leading to attrition and a loss of talent.

  • Not having an exit strategy: Without an exit strategy, your project might struggle to respond to unexpected setbacks. As a result, you may have to abandon the project abruptly, leaving resources, time, and efforts invested in the project wasted. 

Lack of a clear exit strategy can also lead to potential legal issues and may reflect poorly on your ability to execute projects effectively.

But you don’t have to worry about these issues if you partner with a reliable nearshore product development company like Distillery.

We’ll tell you why.

Amp Up Your Nearshore Product Development With Distillery

Distillery is a nearshore company that offers a broad set of product development services like product strategy, user experience (UX), user interface (UI) design, custom software development, and more.

With experts in over 9 different time zones, here’s how Distillery meets your nearshore product development needs:

  • We offer experts in all areas — from product development and QA testing to project management.
  • We have technical expertise in a wide range of platforms and tech stacks, like Jenkins, New Relic, and Appium.
  • We provide end-to-end software development services tailored to your business goals and market demands.
  • We create user journey maps, user stories, and wireframes to ensure a meaningful user experience.
  • We use project management systems like agile principles of collaboration, iteration, feedback, and early testing to deliver high-quality products.
  • We offer manual and automated QA testing to mitigate risks and deliver a high-functioning product.
  • We leverage the custom Service Delivery Approach (SDA) to optimize project timelines and scale as your project demands.
  • Through our client-centric approach, we build long-term software development partnerships with clients.

Ready to Develop the Best Products with Distillery?

Nearshore product development is a strategic outsourcing model that marries the benefits of tech expertise with geographical proximity and cost savings.

You need a resourceful, reliable nearshore partner like Distillery to help you maximize these benefits. We’ll help you develop your product hassle-free with the best tech and talent you can get from Latin America.

Sign up with us to start your nearshore product development journey right away!