How nearshoring helps CTOs overcome the five most critical challenges

In today’s digital society, Chief Technology Officers (CTOs) face a number of challenges that hinder innovation and growth. These include a shortage of IT talent, an increasing number of IT projects, growing complexity of IT solutions, rapidly changing market conditions, and rising development costs. Every CTO struggles with how to overcome these issues. Nearshoring presents a promising solution for CTOs, one that can eliminate these pain points while simultaneously driving innovation for forward-thinking companies.

Outsourcing IT related tasks has grown in popularity in recent years. One form of outsourcing is nearshoring, which means that Dutch companies delegate work to teams in nearby countries such as Poland, Romania, Spain, or Portugal. Take Romania, for example, where NetRom is also active. The time difference with the Netherlands is minimal (just one hour), employees share many of the same cultural values, and the work ethic is just as strong as in the Netherlands. In addition, most professionals in Romania speak excellent English. And since Romania is part of the EU, companies are required to comply with European regulations regarding the storage and security of sensitive data when executing IT projects.

Nearshoring versus offshoring 

Another form of outsourcing is offshoring, which involves delegating work to development teams in distant countries such as Nepal, Thailand, the Philippines, Indonesia, Malaysia, Sri Lanka, Vietnam, Bangladesh, and China.

Although the hourly rates for IT specialists in offshoring are somewhat lower compared to nearshoring, this form of outsourcing has several drawbacks. First of all, due to the great distance, there is a significant time difference, meaning foreign development teams are working while we are asleep, and vice versa. This makes direct communication much more difficult, which negatively impacts project progress. Additionally, English proficiency is not always as strong everywhere.

Another disadvantage of offshoring is that the work culture in these distant countries is considerably different. IT specialists there tend to be more reserved in giving feedback when taking on and executing assignments. This can adversely affect the quality of delivered work. Since these countries are not part of the EU, they are not required to comply with European laws and regulations. This may result in IT projects not meeting our standards regarding quality and compliance.

Compared to offshoring, nearshoring offers a large number of advantages. Nearshoring combines geographical proximity with cultural similarities, overlapping time zones, and the same work ethic. Against this background, it is not surprising that Dutch companies increasingly prefer nearshoring. This is also evident from the 2024 IT-Sourcing study by Eraneos & Whitelane, which shows that 44% of the Dutch organizations surveyed indicated they will use nearshoring more frequently when outsourcing work.

Regarding nearshoring, organizations often choose a blended team, where the local team and the external team work together as one unit. By closely integrating both teams, organizations realize several benefits: they increase their development speed, improve output quality, enhance operational efficiency, and maintain control over strategic direction.

Concerning the five main challenges faced by every CTO (shortage of personnel, increase in IT projects, growing complexity of IT solutions, rapidly changing market conditions, and rising development costs), nearshoring offers several solutions, which we will elaborate on below.

1. Shortage of skilled personnel

To remain competitive in rapidly changing markets, companies are forced to continuously innovate in the IT field. This often means that multiple IT projects need to be started simultaneously, which places extra pressure on the IT team. Each project requires, at certain stages, an IT specialist with specific expertise. This causes the demand for IT capacity to fluctuate significantly during project execution. Quickly scaling a local development team up or down is easier said than done. In practice, this is quite difficult to achieve. Not every developer is immediately available for your project.

Choosing nearshoring can solve this problem. Nearshoring offers flexibility, enabling CTOs to better manage the required workforce and respond faster to market developments. Collaborating with nearshore development teams ensures strategic agility. In practice, integrating nearshore teams with local teams works well. The more or less shared work culture contributes to good communication among all team members. This positively impacts project duration and the time-to-market of new products and services. It results in a larger market share and improved profitability for the organization.

2. Increase in IT projects

Modernizing legacy applications leads to a significant increase in employee productivity. Older systems are often slow and harder to operate, which can result in wasted time and employee frustration. By modernizing these systems, organizations can streamline and automate processes, enabling employees to complete their tasks faster and more efficiently. Modernized systems make it possible to work on multiple tasks simultaneously. Employees can work uninterrupted and experience fewer system outages thanks to a more stable infrastructure. Because they no longer have to struggle with outdated technology, they have more time to focus on complex and valuable tasks.

3. Complexity of IT solutions

Companies are increasingly facing growing complexity in IT solutions. Especially when modernizing or even completely replacing legacy systems, organizations encounter new technologies. This is due to the use of a wide range of technologies, such as cloud platforms (Amazon Web Services, Microsoft Azure, and Google Cloud Platform), DevOps pipelines, and AI/ML implementations.

Additionally, robust cybersecurity is essential, while at the same time companies must comply with laws and regulations regarding the collection and storage of confidential data. Not every company has this specific expertise in-house. Dutch IT specialists with this knowledge are not only scarce but also expensive. Of course, existing IT staff can be retrained, but it ultimately takes a lot of time before they can apply this knowledge in practice.

Nearshoring opens the door to a large pool of talented developers who possess extensive specialized skills and domain knowledge across many areas, along with significant practical experience. This enables CTOs to quickly deploy the right expertise without lengthy recruitment processes. Collaborating with nearshore teams brings fresh insights and innovative ideas. This is especially true when choosing a blended team approach, where local and external developers work closely together as a single team. In such a blended team, specialists with diverse backgrounds collaborate continuously. The ongoing interaction between internal and external team members fosters innovative ideas and groundbreaking solutions that improve an organization’s competitive position.

4. Rapidly changing market conditions

Organizations today face rapidly changing market conditions. Customers have high expectations for delivered products and services and demand a high level of service. For organizations with a legacy IT environment, meeting these high demands is not always easy. Legacy systems can also hinder product development. Due to the technical limitations of outdated systems, it is not always possible to quickly develop new products and services. Speed of development is a key requirement to maintain or improve a competitive position.

Nearshoring offers a solution for organizations that want to respond effectively to rapidly changing market conditions. Highly skilled IT specialists in nearshore teams are capable of efficiently developing well-thought-out IT solutions in a short time. The focus in such a team is on performing the right activities and delivering a quality end product. This is often referred to as engineering effectiveness.

By designing and implementing modern IT systems, organizations can enable integrations with other (cloud) systems and innovate quickly. This accelerates the time-to-market of products and services, resulting in a stronger competitive position for the organization.

5. Rising development costs

Dutch companies not only face a shortage of IT personnel, but when they do manage to attract the right specialists, they also have to deal with high and rising labor costs. This is easily explained by the scarcity in the labor market, which drives up the rates for IT specialists. According to a study by Hello Professionals, published in January 2025, IT salaries increased by 11% in the last quarter of 2024. This is a significant rise compared to previous years.

Nearshoring offers a solution to rising development costs. Hourly rates for developers in Eastern European countries like Poland and Romania are attractive compared to the Netherlands, while the quality of delivered work is at least as good. This makes it possible to stay within tight budgets while still delivering high-quality solutions. Compared to offshore outsourcing, nearshoring offers a better balance between cost efficiency and quality control. The geographic proximity, shared work ethic, and cultural similarities make communication and collaboration easier. This results in higher quality output at affordable rates.

Want to know more about the benefits of nearshoring?

By smartly utilizing nearshore development teams, CTOs can optimize their resources, shorten time-to-market, control costs, and stimulate innovation. Nearshoring offers the opportunity to realize technological goals and ambitions. This allows your organization to remain competitive in a rapidly changing market. Nearshoring is a valuable strategy that contributes to the sustainable growth of your organization.

However, it is important for CTOs to carefully consider all nearshoring options and manage the expectations of all stakeholders within the company. Therefore, choose a reliable nearshoring partner with proven expertise and experience. NetRom is such a partner with more than 25 years of experience. Want to know how nearshoring can support your company in executing IT projects? Leave your details in the form below and we’ll get in touch.