Developing a software is a complex, time-consuming and usually expensive task. Choosing to outsource part of the entire development team to a nearshore development partner can be a wise choice. Not only because it is relatively affordable and cost-effective, but because it offers a new set of benefits for growing business that are looking to expand their reach.
In such a changing and competitive world, organizations are constantly on the lookout for the best alternative to optimize various aspects of their business.
Nearshore software outsourcing offers companies the opportunity to work with a partner that can effectively optimize their software development methodologies, while simultaneously creating a positive impact that allows them to keep evolving.
With that being said, this report intents to shine a light on the new world of software outsourcing, what it is, how it works, why nearshore development is such a viable option for big, medium and small companies, and the way this method can either benefit or affect your business.
Table of Contents:
- What is Software Outsourcing
- Types of Software Outsourcing
- What is Nearshore Software Development
- Top Factors to consider before picking your provider
- How Nearshore Development can benefit your company
- Possible risks of Nearshore Development
Relationship between the provider and the client
- Responsibilities of the provider during the Nearshore Development process
- Responsibilities of the client during the Nearshore Development process
- How the provider achieves a better service over time
Conclusion
Software Outsourcing
What is Software Outsourcing
According to the Cambridge English Dictionary, “outsourcing” refers directly to “a situation in which a company employs another organization to do some of its work, rather than using its own employees to do it”.
Indeed, as stated before, software outsourcing is based on hiring an external company to handle specific operations and perform certain services that were once done by the company’s own staff.
Software development outsourcing relies on a third party or external company taking on the responsibility of assisting another business on developing, designing and testing their software applications, in the hopes to spot major mistakes, fix them and finally improve the overall software.
- Why are companies looking to outsource their software development processes: The process of conceiving, programming, testing and fixing a software, also known as software development can and it should be outsourced in order to accelerate and improve said process, instead of wasting precious time and resources on trying to do it all by yourself.
- The impact of software outsourcing: According to the Statistics Portal, the global outsourcing market is extremely profitable. As a matter of fact, only in 2017, the global outsourcing market amounted to 88.9 billion U.S. dollars. With 60% being represented by IT and software workers.
Types of Software Outsourcing
There are three types of software outsourcing methods: Onshore, Nearshore and Offshore software development are the three types of outsourcing you will encounter when looking for options. For the sake of this paper, In-House software development won’t be listed as an outsourcing method.
Onshore
Onshore Software Development happens when a company decides to hire an external team that is located within the same country or even region as their own business. It is considered as the most recommendable option out of the three types of outsourcing.
This option connects your company with another business that is within your time zone, speaks the same language as you and are able to meet you in person if necessary at any given point during the project.
It is important to mention this is the most expensive option of them all. Although convenient for many, the prices to outsource your software development process this way, can be considerably higher when compared to offshore or nearshore development.
Offshore
Offshore software development is based on the idea of hiring an outsourcing company or team located outside your own country, meaning hiring someone to work remotely from abroad.
It is considered the most affordable option. Costs rates are lower, work can be done virtually, and the overall hiring process is fasts. However, dramatically different time zones and language barriers can quickly dismiss this method as a viable option for business.
Nearshore
Nearshore development is based on the process of hiring a company that is located on another country, but unlike Offshore, this country is actually nearby or relatively close to where your business is located.
This significantly improves the future professional relationship between your company and the external organization. One, there won’t be dramatically different time zones nor language barriers, and two, the lower costs will maintain.
What is Nearshore Software Development
Nearshore development is one of the three types of software outsourcing, becoming extremely popular amongst big, medium and even small companies across the world. According to statistics, only in the United States during the early 2000s, multiple corporations choose to outsource their processes, successfully outsourcing over 2 million jobs.
Nearshore Software Development as told by the numbers:
Top Factors to Consider Before Picking Your Provider
Trusting the process of creating, developing and testing a software to a third party, gives your company the liberty to focus on the more urgent tasks ahead.
However, keeping in mind the impact a good provider can have on your company, it is a must to carefully select who you will be working with, and take these factors into account.
Costs
Nearshore software development shares the first spot (along with offshore development) when it comes to price rates. Both being incredibly affordable when compared to in-house or onshore software development.
Keep in mind the term being used is “affordable” not “cheap”. This is due to the fact a great nearshore provider won’t be cheap, although costs tend do adjust to your company’s budget, making this option affordable for most small and medium businesses.
The key to find the right nearshore outsourcing software provider is to look for a good balance between price and quality. This is done by comparing what the provider is offering to do vs what they’re offering to deliver and how much they’ll be charging you for it.
Time Zones
The Nearshore development provider should be located in a country that either shares the same time zone as you, or a very similar one with almost no difference.
This is to ensure the communication and overall workflow between the company and the provider is as fluid and synchronized as possible. Although working with a team from a drastically different time zone is possible, it can be a risk that could affect the whole process.
Lenguage
Globalization has made it possible for people from all around the world to successfully communicate through a common language, which in most cases, is english.
The provider should be able to fluidly communicate in english in order to maintain a healthy, clear communication channel between them and the company itself.
This makes it paramount for the provider to be able to speak, write, read and maintain a professional conversation, otherwise, it shouldn’t be taken as a viable option.
Access to Technology
A remote job such as nearshore outsourcing relies heavily on the provider to have an immediate and constant access to technology at all times throughout the whole process. By technology it meas:
- Having access to internet
- Having access to a laptop or computer
- Having access to a clean working space
The provider should also count on with the necessary license, resources and hardwares to successfully complete the job required by the company.
Talent Pool
Considering and thoughtfully evaluating the multiple options regarding the country from which you are considering to hire a nearshore development provider is a necessary step towards finding the best possible company available.
Focus on selecting them over their capacity and ability to perform a certain task (In this particular case, successfully developing a software) and contrast each one until you come out with at least a top five, or in the best case, come out with the desired pick.
How Nearshore Development can benefit your company
Software outsourcing has been proven to be one of the most valuable resources when it comes to better the software development process of a company. If you are still in doubt, we present you the benefits nearshore development can bring
Lower Costs
Hiring a skilled nearshore development provider is extremely more affordable than hiring another employee to do the job. This is due to the fact you’ll only be paying the stated in the contract.
Meanwhile, hiring another employee not only requires you, as a company, not only to pay them a monthly salary, but also include any other employee benefits, spend resources on training them, and so on, ultimately accumulating a great amount of money spent on a single person.
Focus on core business projects or tasks
Nearshore development allows you, as a company, to focus on core business aspects while the software developing process practically runs on its own. You’ll be not only cutting expenses by outsourcing your software development, but this will grant you and your team time to focus on more important tasks lying ahead without experiencing any delays.
Access to expert developers
Choosing Nearshore Development as your software outsourcing method will instantly give your company access to work with expert software developers that have experience on the field and are able to deliver a high quality, error-free software right on time.
Possible risks of nearshore development
Although small, there are risks you as a company can face when partnering with a nearshore software developing provider, risks that you should be prepared to endure during the process.
Language Barrier
Communication might be an issue, specially during the first days of the collaboration between you and the provider. Unless you find a native english speaker, it is likely the language barrier will interfere with your communication every once in a while.
Slow Workflow.
Technical problems (unsteady internet connection, power outs, computers shutting down, and such) might happen during the software development process, making it possible for a delay to happen, inevitably slowing down the workflow between the provider and your company.
Relationship Between the Provider and the Client
Responsibilities of the provider during the Nearshore Development Process
It is extremely important for the client to be crystal clear about the responsibilities the provider will be acquiring during the software development process. The provider should always know what he is responsible for and be able to meet the standards set. Let’s proceed to list a couple of them here:
- If at any point the developer is out of tickets, they should contact the manager so the client is immediately contacted: This is considered an extra benefit the client gets when contracting engineers from the provider. If there is the case the PM isn’t assigning enough tickets to the developer, they will be able to contact the internal manager, which will later on urgent the client to add more work to their responsibilities. All of this is done as a second layer of insurance to make sure the developer is being the most productive during work hours on daily basis.
- Provide good communication based on the project requirements: One of the key aspects of developing a project is communication, part of the importance of good communication is to have a better knowledge of the objectives and the tasks necessaries to reach them. The communication channel between the provider and the client should always be fluid and clear so the provider knows which path to take when implementing said tasks and be able to meet the client’s expectations.
- Involve internal time and people to train your team: The provider is responsible of training and managing the areas that the engineer needs to improve, this a cost the the client gets for free and normally the provider tries to get this time done out of the invested time on the project, before or during the project execution.
- Providing the necessary conditions for their team to work: The provider should fulfil the requirements for their team to work, meaning failover internet connection, coffee, good work environment and such. This is a very basic thing, but the great part is the client does not pay for this.
Having a good working environment is a must in when it comes to nearshore development. As a matter of fact, multiple clients have asked us to show them a walkthrough of our office space with our camera to make sure we have the equipment and facilities necessaries to get the job done.
It’s also quite common have the client talk with couple of people, since they like to be sure that both the work environment and the staff are reliable.
- Solving any internal problems and be transparent with any mistakes that might occur: Mistakes are a common thing when dealing with software development, however the provider should always report any problems that might happen during the collaboration. As a nearshore software development partner, we, as a company, are required to inform and work towards solving any minor or major issue that could potentially slow down or affect the process, with the hope of getting back on track as soon as possible.
- Work hard and motivate the team so they have certifications: A company that tries to get their team certified and have this option open to their team, are companies who understand knowledge not only will get things done quicker but will also significantly lower the issues that can happen on a project . This is a good thing since the client can try to get the developer certified by the providers costs (if the price is acceptable for the provider) or simply the engineer is on the path to get certified.
Responsibilities of the client during the Nearshore Development Process
- To inform when / where should the communication be done: As we have stated multiple times, a good communication is paramount for these kinds of projects. This is something that is taken for granted working with a contractor but in the initialization of a relationship / project, the client needs to be clear with the team as to if the communication should be on a daily basis, or it should be done by implementing an end of day short report. Setting up the bases of a good communication channel will set your project towards the right direction instantly.
- What to expect of every team member: When you, as a company, initiate a project with new members or previous members that the PM has worked with, the PM takes time to explain the expectations and the basic rules about working on a daily basis. This protocol should be followed when working with a nearshore development partner as well, the PM of the client (meaning you) is responsible for letting the provider know everything about the company’s work culture and how things should be done on a daily basis.
- Communicate right away to the contractor manager if something begins to be an issue: This is the fallback of the responsibility of the provider with the client, if also the client feels that something needs to improve immediately, he needs to communicate this ASAP so the fixes can be done.
How the provider achieves a better service over time
The type of provider the clients look for in nearshore development services are companies that can evolve at the same level that the client does. Meaning, if the client uses new development technologies or project methodologies, it's extremely important for the client to share that information with the team, so the team management or team members of the project can acknowledge this and use it to their advantage. This allows both parts to grow disruptively, achieving their desired results in a much harmonious, easier way.
Conclusion
There is no denying the method of Outsourcing your company’s process is more alive than ever. Not for nothing the outsourcing market managed to grossed an impressive amount of 82.9 billion US dollars back in 2013, with up to 57% of companies increasing the use of outsourcing to take care of their projects, this according to the the Outsourcing Stats report.
Taking this previous information into consideration, choosing to outsource your software development process with a nearshore development partner is a right move into the right direction.
Not only you’ll be an active part of these statistics stated before, which makes your company a competitive force to be reckoned with, but you get to improve your business’s internal process, lower the rate costs and manage to focus on other core tasks without compromising your staff’s time or resources.
