In-house teams are declining in importance as businesses increasingly opt for outsourced development.
Outsourcing offers cost and time savings while maintaining productivity.
Conversely, it can present challenges such as language differences, timezone conflicts, and ineffective management. This article explores why nearshore software development in Estonia is rising in popularity.
Estonia’s IT services market is experiencing consistent growth, offering favorable conditions for foreign investors, startups, and software giants like Skype and Microsoft.
It is clear why nearshoring software development in Estonia has become famous for companies that want to find skilled workers at competitive prices. Given this rising trend, Estonia has become a significant hub, offering a large pool of trained workers, proximity to strategic regions, cultural similarities with clients, and demonstrable experience in developing Estonia as an e-state.
Nearshoring to Estonia
Nearshoring to Estonian firms in a nearshoring model minimises time zone differences and eliminates communication issues for global companies. Even personal visits are straightforward; a Berlin to Tallinn flight takes two hours and three from London.
Opt for nearshoring in Estonia for comparable oversight at a lower cost of product ownership.
Why consider nearshoring software development to Estonia
Despite the evident advantages, nearshore software development does not fit all companies. Below, we outline the criteria for considering nearshoring options.
Comfortable geographic position
Nearshore development is particularly location-dependent among outsourcing strategies. When selecting an outsourcing firm, consider the availability of skilled professionals in the country. For instance, if you are a Norwegian company considering outsourcing, an Estonian nearshore team would be preferable over an Indian or Philippine offshore team. Estonia is only one time zone ahead of Norway, the Philippines is seven hours ahead, and India is five.
Project budget flexibility
For budget-conscious firms, nearshore software outsourcing offers a cost-effective alternative when affordable local providers are lacking. Conversely, expanding your in-house team may be viable if budget constraints are minimal. Otherwise, nearshore software development companies remain an optimal choice.
Easier team scaling
Having an in-house team can be advantageous if multiple applications are in the pipeline, as team synergy from the first project can be invaluable in the future. However, maintaining an on-site team is not necessary for a single project. A nearshore development firm can construct and maintain the application, eliminating the need for office rent and salaries.
Maintaining positive relationships
Success in outsourcing software development hinges on robust human relationships, which necessitates mutual trust and commitment. Thus, investing time and resources in these relationships is advisable. By leveraging cultural alignment, geographical closeness, and cost-efficiency, businesses can maximise the value of their resourcing via nearshore IT development.
During application development, adherence to specific regulations is obligatory. For instance, targeting the European market necessitates GDPR compliance, while CCPA governs California residents. Ensure the company is well-versed in these legal requirements before contracting.
Before formalising an agreement with a nearshore development team, verify their competence in adhering to your region’s regulations. Breaching GDPR or CCPA can result in substantial fines; treat this consideration with the utmost gravity.
Estonian nearshore software collaboration boosts your team’s productivity, allowing you to concentrate on crucial responsibilities. For instance, external professionals could manage back-end development.
Moreover, burnout is likely if your staff frequently operate during late hours. Nearshoring can negate the need for night shifts, thereby elevating labour standards and employee engagement.
What other reasons should organisations consider outsourcing to Estonia?
Estonia and an advanced digital society
Estonia ranks 9th in the DESI 2022, scoring higher than the EU average. The country is a frontrunner in Digital public services, ranking first in the EU on Digital public services. It continues to be a strong frontrunner in this area.
The proportion of e-government users has gradually risen in recent years, making up 89% of the nation’s internet users. Estonia outperformed its 2020 figures in the usage of pre-filled forms, scoring 97 out of 100, significantly surpassing the EU average of 63.
Over the last decade, Estonia has constructed a digital infrastructure system that made nearly all government services available online. 99.9% of Estonian public services are digitally accessible, including filing taxes, viewing healthcare records, and voting in federal elections.
Most notably, Estonia has developed an e-residency program to facilitate “the first digital nation for global citizens.” E-Residency gives individuals a unique digital identity in Estonia, which helps attract international business efforts and has led to a burgeoning software and startup sector.
The software sector and the startup sector thrive in Estonia
As it stands, Estonia hosts 1,442 startups, with 50 new enterprises added to the database last year. Notably, 32% of these startups have been operational for over five years.
The most populous sector for active startups is Business Software and HR, boasting 258 active companies, constituting 18% of all startups in the Estonian Startup Database. FinTech follows this with 193 active startups (13%) and Consumer Products & Services with 156 active firms (11%).
Why Helmes is the go-to company for nearshoring in Estonia
Evaluating Estonian companies using these criteria can guide you towards an optimal choice:
- Opportunities in tech education
- Rankings in global IT destination indices
- Time zone difference
- Proficiency in English
- Availability of resources and diversity in tech competencies
- Cultural mindset
Based on these criteria, Helmes is considered one of the best for hiring a nearshore software development team.
Helmes boasts an array of talents that can be leveraged no matter what project is required. Our team is the complete package – business consulting, data analytics, design, and software development services.
Helmes offers a comprehensive skill set covering business consulting, data analytics, design, and software development. Tailored to project specifics and budget, Helmes can initiate with a minimum viable product (MVP) or a Quick Start to validate concepts and implement early adjustments.
Our business and design experts will optimise the MVP and interpret the resultant analytics. Estonia’s broad educational base and skill diversity deliver consistent, high-quality service.
These values make Helmes and Estonia an appealing Estonian outsourcing destination.
Top companies that have trusted Helmes for their software development needs
Top companies opt for Helmes due to our leading nearshore software development teams in Northern Europe. Helmes provides technology strategy, service design, software development, and data management, emphasising achievable business expansion.
Airbus is a design, production, and global delivery company of aerospace products, services, and solutions. Operating across commercial aircraft, helicopters, defence, and space industries, the company pioneers efficient and cutting-edge technologies.
Helmes was commissioned to create the platform, culminating in the launching of the Airbus New Standardization Portal (NESPA) in June 2022.
NESPA, a bespoke project management application for Airbus’s internal standard organisation, allows authorised global access through its web portal. Utilised daily by hundreds of employees, this cloud-based system is readily scalable to accommodate a growing user base.
The Organisation for Economic Co-operation and Development (OECD) gauges productivity, along with global trade and investment, via its wide-ranging expert network. The OECD establishes global norms on myriad issues, ranging from agriculture and taxation to chemical safety.
Four teams at Helmes collaborate with the OECD Headquarters in Paris. We are crafting various internet applications, devising a statistics module, focusing on publishing and document management, and creating collaboration tools for external and internal users.
Kuehne + Nagel
Kuehne + Nagel stands as a global frontrunner in offering innovative, fully integrated supply chain solutions, with a history spanning 125 years. K+N is the world’s largest sea freight forwarder, second-largest in air freight, and Europe’s third-largest road transport provider.
Helmes created a digital tool for monitoring temperature-sensitive cargo, primarily aimed at pharmaceutical consignments by air and road. The system is synced with a cloud of sensors, allowing customisable temperature settings and alert scenarios for each package. The solution earned the 2015 “Best Use of RFID to Enhance a Product or Service” award from the Global RFID Journal.
Helmes, in partnership with Telia Finland and Turck Vilant Systems, recently adapted a warehouse process for the retail sector. This innovative solution has revolutionised retail.
Telia Finland now experiences fewer logistical and accounting errors, resulting in significant time and energy savings. The solution is also universally applicable, not just to the technical gadgets sold by Telia. Helmes has successfully trialled the RFID technology on various items, including those containing liquids.
Helmes is one of the biggest software nearshoring companies in Estonia
Over the past three decades, Helmes has been a pivotal contributor to the development of e-Estonia, covering sectors like central government, e-voting, e-justice, security, social services, agriculture, e-health, utilities, and local government. You can read about our successes within and outside of Estonia here.
Headquartered in Estonia, Helmes boasts over 30 years of expertise in delivering premium software solutions to startups and businesses of all sizes, employing state-of-the-art technologies.
We offer IT services and custom digital product development, assisting clients in workflow optimisation, overcoming internal challenges, and gaining competitive advantages. Helmes is also at the forefront of sustainable software and architecture.
Choosing us affords our partners numerous benefits:
- Tailored, high-quality software to suit your business
- Comprehensive consultations from our experts, be it a Project Manager, Business Analyst, or Solution Architect
- A team of agile, highly skilled professionals for project development
- Swift elaboration of software architecture processes
- Environmentally sustainable software solutions that benefit both people and the planet.
Even if you have had a previous negative experience with nearshoring in Estonia, the advantages of development outsourcing generally surpass the risks. Companies vary in collaboration styles; past failure does not guarantee future failure.
Teams at Helmes have observed this from clients with failed projects and know how to sidestep these issues. Helmes is committed to enduring partnerships that foster mutual growth. Consult our IT specialists for a free conversation.