The rise of digital technologies has essentially resulted in rising importance of nearshore IT service providers' traditional strengths. Mid-sized Latin American service providers and Eastern European providers have experienced a unique growth trajectory compared to suppliers in this category. They focus on high-value service lines with low price sensitivity, experienced product engineering resources, and revenue or brand-centric programmes. Having a shortage of heavy application maintenance and support practices, most mid-sized nearshore IT services providers, however, lack an in-depth understanding of legacy environments and the ways to transform them as components of end-to-end digital transformation initiatives.

Businesses that traditionally employed design specialists and had development-only engagements with nearshore technology providers are now fundamentally revamping their strategies. The stronger ones combine digital customer experience (CX) with competencies in operational excellence technologies, likely business process management (BPM) and robotic process automation (RPA).

According to Forrester research, agile practitioners in most offshore suppliers are still a minority in the development workforce. Although nearshore providers amalgamate robust digital CX capabilities with digital operational excellence competencies, most of them strongly lack legacy modernization practices. Nearshore practices around digital operational excellence, such as BPM, are comparatively smaller than their offshore peer-providers. The robotic process automation practices of nearshore providers lack development expertise and do not compare well with those of offshore providers.

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Mid-sized nearshore providers often bring to the table practical design skills, software product engineering, digital customer experience platform capabilities, innovation and thought leadership, agile development practices and maintenance of front-end applications. And, overall, Forrester's clients points out that mid-sized nearshore IT services providers' distinct propositions tap well into businesses' digital CX needs.