Once you have decided to outsource your software development, you quickly come to the next decision point: where should you look for your development partner?
Nearshoring software development has been a kind of middle ground between onshoring, where your outsourcing partner is in your country, and offshoring, where your partner can be half a world away. Though nearshoring could be seen as just a flavor of offshoring, there are some characteristics that distinguish the term.
Thus, “near” in this context could mean:
- geographic proximity—the country where the partner is located borders your own, or there is a sea or other countries separating the two;
- time zone proximity—business hours are the same or mostly the same;
- language proximity—this can be taken to mean how similar the spoken languages are, but more realistically it comes down to the overall quality of English instruction in the country and how important professionals there feel it is to limit language barriers;
- cultural proximity—not everyone has experience dealing with cultural differences. This proximity refers to where both sides share similarities in terms of things like service expectations, timeliness, and how to say “no.”
In a post-pandemic world where people are accustomed to online collaboration, nearshoring is trending as an alternative to onshoring. Where clients once preferred or even expected outsourced employees to work on site, this is no longer a requirement.
Look beyond programming skills
When choosing a nearshoring partner and, later, the software development team, it’s tempting to focus on the technical skills of the staff, whether it’s how many languages the person can code in or how eye-catching their graphics are. While those are quite important, the fact is that, especially with staff augmentation or the hybrid model, you are creating a team in which some people will be strangers to others; the more so if there’s a national border or a sea between you!
The story of working culture and hiring practices in the last 20 years is one of a realization that your experts need more than hard skills—the soft skills are at least as important. Venture capitalists know this, and so do HR managers. A quality partner will have training available for its employees in soft skills areas such as emotional intelligence, leadership skills, and conflict resolution. You should strongly consider implementing such training for your own staff, too, if you haven’t already.
So, what other factors should you consider when choosing a nearshoring partner?
Legal frameworks
Without a doubt, your company already cooperates with and buys services from other companies, so you know how important a legal framework for a partnership can be. If your partner is in another country, there will be various additional legal complexities, but nothing insurmountable if your partner-to-be acts in good faith.
As mentioned in our article on creating a good IT outsourcing contract, key considerations include the following:
- What’s the process for accepting completed tasks and settling accounts when everything is finished?
- Certain processes are key for the success of any software development: responding to the initial request, onboarding the team, reviewing task performance, and—something that will hopefully be unused and unnecessary but is important to have—replacing team members.
- Security, compliance, and confidentiality. Trade and financial secrets are perhaps the biggest worry for a company considering an outsourcing partner. This all the more reason why security and compliance will need to be covered by the legal framework for your cooperation.
- The legal framework should include copyright and non-disclosure considerations, as well as promises from both sides not to hire team members away from the opposite side. Doing so might be convenient, but it’s bad form.
Finally, you should also consider what kind of contract you will sign with the software development company: a time and materials (T&M) contract or a quoted time and materials (QT&M) one. A competent nearshoring partner will be ready and willing to choose the form of contract that will be optimal for both sides.
How many team members will be in your nearshoring company’s employ?
If you are not already outsourcing your company’s daily IT needs, you may already have staff who are able to take on at least some of the tasks involved in software development. How many such employees, how much experience they have, and how much time they could spend on the project will all have bearing on which of the three outsourcing models (staff augmentation, hybrid teams, dedicated teams) you choose. An experienced software house will be able to guide you if you need assistance with this decision.
Shared business processes and best nearshoring practices
A good nearshoring partner can help you with your research and will help you plan how the various software development functions will be located and managed. They should ask about any legacy code or if any technical documentation is missing, if applicable, to avoid uncomfortable surprises later on in the project. They will need to know what in-house skills you will provide, if any, and the experience level of the staff providing them.
Your partner should have a good communications strategy in place, helping you to create a feedback culture. They will communicate often, so that potential misunderstandings are caught and that expectations are clear. In particular, they will be open about the quality of their work and what they are doing to address any issues.
Set core hours of communication, and be intentional when you decide the best way to share information. For group meetings, teleconferencing will be more effective than a voice call, as long as everyone attending is there to contribute.
To set a project off to a good start, hold a kick-off meeting. With nearshoring and the end of the pandemic, this can, but doesn’t necessarily, involve some travel. There should be an agenda, and if the team is too large, there should be a natural way to break the group into smaller, more communicative subgroups, with tasks to perform at the meeting.
How the team and its work are organized
No project, and no cooperation, is without its risks. Will the finished project work as expected? Will team members have to drop out—or be fired—before the project is finished? Will the market opportunity pass by before the new app is ready? What if not all of the chosen team members are up to the tasks the project requires of them?
Experienced partners know how to mitigate those risks and build a successful team. To a large extent, it comes down to how many questions the nearshoring company asks, because the more they know, the more accurately they can plan. They can plan the right number of team members, and even rotate members on and off as needed. Best of all, a quality partner is deeply involved in the successful functioning of the team and actively intervenes if necessary.
Infrastructure, or the team’s development environment
When it comes to software development, infrastructure refers to the various environments development processes take place in. Each stage of the development process will have a particular environment, though there is some cost to each one. As a result, the size of the team and the size of the project will have a bearing on how many environments are used. Cloud hosting goes a long way toward limiting the associated costs, as well as enabling offshore work.
When setting up the project and the legal framework, infrastructure is an important point to make clear—who is responsible for which aspect? Development operations tools (especially pipelines) are especially important, because they help organize the development process and team work. An established software house will have its own environments already, and its developers will be quite comfortable using them, but as the client, you may require the software house to use the environment you prefer. Ask your nearshoring partner about the following:
- Who pays for, manages and has access to the environments? The software house that has its own environments can cover these costs with the fees from multiple customers, passing the cost benefits on to you.
- Can the environments only be accessed by your employees and theirs, or are some of them open? With an environment that is not open, when is it available—24/7, or only during working hours… and whose working hours? (Here is one way time zone proximity is among the benefits of nearshoring.)
- What data will be used in the environment? Dummy data offers the most security but the least realistic test results; real customer data offers the opposite, of course.
Hardware and software tools
If you choose to work with your nearshoring partner’s dedicated team, you may well not have to worry about getting hold of certain software development tools or technology. With a hybrid team or staff augmentation, however, there will be some useful items that your partner may request.
- Do you have extra computer equipment and furniture on hand? Even if your own employees still use single monitors, your software developers will want two or three. Items such as an ergonomic keyboard and an ergonomic office chair may be more expensive but will help your relationship with your temporary team members start positively.
- Whether you use Slack, MS Teams, Mattermost, or another tool, your collaboration with your nearshoring partner will go more smoothly with the right communication tool. You will probably adapt by getting a license to work with a dedicated team, but the staff augmentation partner should adapt by using the tool your employees are most adept with.
- If you’ve chosen to augment your staff, but don’t yet have specialized tools for the developers’ team, get some recommendations. These tools are ones that can accelerate tasks. For example, Resharper is an extension for Visual Studio that analyzes code on the fly for errors and helps update older code. AI tools are now able to suggest code the same way autocomplete suggests Google searches!
Wrap-up
When you’re considering an outsourcing model, the world gives you plenty of choices. There are certain advantages to choosing nearshoring in a country where skilled professionals are part of a talent pool that uses English and lives in the same or similar time zone to yours. There are added advantages if the country’s economy is stable and home to plenty of experienced choices among many nearshoring companies, and if cultural barriers are minimal, where they exist at all.
A competent nearshoring partner has the soft skills and knows how to craft the right legal framework needed for a successful project. They will know about the infrastructure, the tools and the business processes to put to work for your partnership. In short, dot your ’s and cross your t’s, and if the nearshoring company you’ve chosen does the same, then you’ve done all you can to minimize risk.
