In this blog post, we’ll discuss the benefits of nearshore development which can substantially differ from traditional offshore development. Before launching into the benefits of nearshore development, we’ll explain some definitions. We’ll then move onto discussing the positive impact that traditional offshore development can have regarding economic benefit while maintaining quality and increasing development velocity. Finally, we’ll explore the benefits that nearshore has over the other side of the world offshore development.
Definitions
First, some definitions.
Outsourcing
At its core, “outsourcing” is a simple concept. You hand over (kinda scary huh) a project or deliverable to be completed by a third-party organization or business. While The concept is simple, the reality is a bit more complex as we will discover.
There are two types of outsourcing.
Offshore Development
Offshore development is just that: development traditionally is done overseas. For U.S. based clients, typical locations for offshore development include Vietnam, Russia, India, China, and Eastern Europe. .By adopting an offshore development model, you could select a software development firm from a completely different location someplace around the world. These teams are in different time zones ranging from 8 to 13hrs and can take from 12 to 30 hrs of travel time to get to your teams.
Nearshoring Development
You can think of nearshore development as being much closer to home. With nearshore development, and as the name suggests, you outsource elements or all of your project closer to your home territory or time zone. For U.S. based clients, typical locations include Latin America such as Costa Rica, Colombia, and Argentina along with Mexico. These teams reside in the same time zones as the US and travel times to your teams can range from 4-10 hrs.
In a future post, we will explore key questions to ask to pick the right nearshore software development partner.
Offshore Development Benefits
Economical
Consider for a moment your software business operates in an established economy. The talent pool can be expensive, by adopting an offshore development model, you can reduce the build phase of your project by introducing an offshore development team from an emerging economy.
Time zone
An offshore development team in a different time zone can be a challenge. If we focus on the positives, however, your business support function can take advantage of different time zones and benefit from having 24-hour support.
Global Talent
With sites such as www.freelancer.com and www.upwork.com, it’s easier than ever to leverage talent from around the globe that can ship quality products – providing you can thoroughly document your requirements!
Offshore Development Risks
Communication
This can be an issue if you outsource your software project to a remote location in the world. If the development team doesn’t speak your native language, requirements have the potential to be misinterpreted thereby resulting in late delivery of your project and spending longer than necessary to articulate what needs to be built.
Time zone
Beyond travel issues mentioned in the definition, different time zones can carry other elements of risk. Two examples to look at including Agile Scrum Methodology and Troubleshooting
The Agile Scrum Engineering Methodology was designed with the intent of having lots of interaction, collaboration, and iteration. The promise of a 5-hour overlap with your Offshore team won’t produce a true Agile scrum experience. Teams working off-hours tend to have a higher churn rate along with lower-quality output over time.
Consider for a minute that you’re running late on a software project with your local development team. By introducing a new offshore team, you could work “around the clock” but carry the risk of the offshore team not fully understanding the project requirements and experience troubleshooting delays. Without a “local resource” in the same time zone, it can be difficult for the offshore team to troubleshoot in a timely manner.
This can mean both the domestic and offshore teams need to cater to each other’s time zones and facilitate handovers at the end of the week / each sprint and can often be problematic.
Lost Days
Communication is the key to success when integrating an offshore development team into your domestic team. That said, your domestic team may find they are spending more time hanging out on Slack or Skype nailing down requirements and providing domain knowledge than writing code. All of this can affect release dates and eats into development time.
Detailed Requirements
With offshore development teams, you need to write very in-depth and detailed functional specifications and design specifications. All this extra documentation can increase the analysis phase of your project, regardless of Agile practices.
Nearshore Development Benefits
We’ve detailed core definitions and explored the benefits and risks of an offshore development business model, but how does a Nearshore development compare against an Offshore Development model? Let’s explore some of these now.
Same or similar time zones
One of the most immediate benefits of opting for a Nearshore development team is the time zone. Depending on where you’re located in the world, you may be able to find a development team closer to home in an emerging economy meaning you no longer need a night shift to transition between releases/sprints or meetings.
Better cultural fit
Being on the same continent will reduce the number of cultural and working differences thereby meaning a nearshore team can integrate more easily than a traditional offshore team.
Cost-effective
Nearshore development teams, just like offshore development teams, are also cost-effective!
Easy Travel Zone
In addition to being cost-effective, given that nearshore development teams are closer to your main office, there is greater opportunity to have more frequent meetings – in person. This can have massive productivity improvements and help development teams gel. Face to face communication and the social interaction only afforded by time together is a huge benefit to you and the team.
Problem Solving
With a nearshore development team in a similar time zone to your main team, any show stoppers or priority issues can be tackled almost immediately. In comparison, with a traditional offshore development team, you may struggle to get this type of service level agreement.
Nearshore Development Risks
We’ve compared some attributes of nearshore and offshore development teams. By now, you’ve probably recognized that nearshore development teams carry similar elements of risk, but it’s easier to manage.
But are there any disadvantages to introducing a nearshore development team to your project?
Cost
A nearshore development team, while more economical than your domestic team, will still cost more than a traditional offshore development team.
Fewer providers
As the software development employment market increases and access to workforce sites such as www.upwork.com, finding a nearshore development team may become more difficult as salaries are increasing in locations such as India and the Philippines.
Summary
If you’re looking for the lowest possible hourly rate (remember, we get what we pay for), you should consider an offshore development team. You need to be prepared however that the price may ultimately end up increasing due to miscommunication, delivery and quality issues and high travel costs.
Nearshore development teams offer the benefit of decreasing your costs while also offering some of the benefits of a domestic team such while remaining fairly close to home.
Here at Growth Acceleration Partners, we have extensive expertise in many verticals. Our Centers of Engineering Excellence (COEs) in Latin America focus on combining business acumen with top-notch expertise to help your business.
We can provide your organization with resources in the following areas:
- software development for cloud and mobile applications
- data analytics
- data science
- information systems
- machine learning
- predictive modeling
- QA and QA Automation
We can take the pain out of finding and managing nearshore resources and ensure the success of your project whether it be software development or system testing.
If you’d like to find out more, then visit our website here. Or if you’d prefer, why not arrange a call with us or send us an email.
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