Software Development Outsourcing - #1 Agile Software Solutions

Get Better Results with a Proven Software Development Outsourcing Partner

Considering working with a software development outsourcing partner to help grow your business? If so, you’re far from alone. Many businesses use outsourcing to reduce overhead, access specialized talent, and achieve a quicker return on investment.

Here, we’ll explain the basics of outsourcing, as well as the differences between working with an offshore development team or nearshore development team.

What is Outsourcing in Software Engineering?

Software development outsourcing typically involves hiring a development company based outside of the United States to reduce costs or fill in skills gaps within an organization.

For most companies, the big ‘IT decision’ used to be whether to keep development in-house or outsource their software development efforts.
Now, the more common consideration is whether to offshore or nearshore software development. As more and more companies are becoming aware of its advantages, nearshoring is quickly becoming the go-to choice for organizations that want the benefits of working with a US team, with the cost savings of working with an overseas team.

Challenges of Offshoring

Traditionally, software development outsourcing provided a far better ROI than nearshoring but the tides are turning. Nearshore talent is closing the gap, enabling Agile software development outsourcing like never before.

Software development outsourcing services allow companies to delegate their software development needs to an outside organization, typically in a country with more competitive wages.

This access to a cheaper labor pool allows companies to develop software quickly, and with less investment. Likewise, software development outsourcing allows a company to scale the size of its development team on-demand.

What Is Offshoring? The More Challenging Option

The practice of “offshoring” is when a business hires a development team that is in a different country and timezone. Offshore software developers are primarily located in Asia (Afghanistan, India, Malaysia, China, Philippines, and Vietnam).

There are many development companies in the Eastern European countries of Romania, Bulgaria, Russia, and Armenia. In Africa, they are typically found in Kenya, South Africa, and Morocco. Offshoring is becoming the less popular option, as there are several obstacles between a US-based company, and development teams in Asia, Europe, and Africa.

What Is Nearshoring? Software Development Outsourcing Done Right

When a business selects to utilize a nearshore software development firm, they work with developers in countries within the same geographic region.

For companies in the US, this includes Mexico, Brazil, Costa Rica, or Argentina. The Nearshore model provides such benefits as shared time zones, more comparable cultures, and generally, fewer language barriers, resulting in simpler integration with existing teams.

For nearly two decades, the number of organizations that select offshoring for their software development outsourcing needs has been on the decline, while nearshoring is rising in popularity.

Here’s why:

1. Geographic Proximity Improves Collaboration and Communication

More organizations are seeing the advantages to the geographical proximity.

Offshoring software development, for the most part, implies slack time (typically around 12 hours) and less control over quality, activities, and due dates.

The difference in time zones often results in the development teams’ US counterpart regularly attending meetings at odd hours. This also makes it extremely challenging for internal resources to have any communication with their outsource counterparts.

Where agile development typically favors collocation and increased collaboration, offshoring stands as the least desirable software development outsourcing option for organizations practicing Agile or DevOps.

Quality of communication is a major factor in the success of any project or business relationship. When you dramatically improve the quality of communication with your outsourcing software partner, projects are often more successful, sent to market more quickly, and provide a better ROI. This improvement in communication is evident when you outsource to a nearshore country like Mexico, rather than countries on the other side of the globe like China or India.

In any given project, there are many stakeholders. Each stakeholder has a unique investment and interest in the project, and when there is a stronger relationship between all stakeholders, development time, and the quality of the end-product naturally improves.

2. Reduced Cultural & Language Barrier

People all over the world speak English as a second language, but because English is a very nuanced and complex language, there can be many things that are lost in communication. This can be particularly frustrating when communication is already difficult due to time zones and distance.

While the first language in Mexico is not English, Mexican nearshoring partners are far more likely to speak English and communicate fluently with clients.

Beyond language, working with Mexico-based software development teams eliminates many of the cultural barriers that come with working with companies based in Eastern Europe, China, or India.

Offshoring your software development project to a developing country brings along challenges that include a less concrete common framework, immature legitimate and administrative frameworks, and issues related to political instability, and touchy, licensed innovation.

By contrast, Latin America and North America have a common history and interaction with each other for more than three centuries. This shared history and culture is important to outsourcing in that there are fewer things to learn about your off-site colleagues.

 

 

3. More Skilled Employees and Close to Home

While it may seem surprising, the US doesn’t (at least not right now) have the STEM talent pool needed to support demand for new projects. As such, companies are increasingly looking toward outsourcing custom software development to launch projects quickly while staying on budget.

Despite allocating additional funds to developing STEM talent in the US, the gap is still there and Mexico is more than willing to fill that gap with talented developers.

Adding complexity to the issue is the significant STEM salary gap between the US and Mexico. Despite having similar education levels, the demand is so high in the US that US STEM talent often earns a salary significantly higher than that of their Mexican counterparts. Because of this, companies often opt to outsource and Mexico has poised themselves as an ideal alternative.

4. Improved ROI

While outsourcing to India and China allows organizations to tap into a large network of highly-skilled workers at an exceptionally low rate, these arrangements come with several challenges that can quickly cancel out any potential cost savings.

Though far-flung outsourcing companies often charge half as much for service as their Mexico-based counterparts, nearshoring tends to deliver better returns for US companies.

The reason nearshoring to Mexico is a better investment comes down to a few key factors. For one, workers operate in US time zones, making it easy for internal and external teams to work together during their usual business hours–like any colleagues working remotely.

That close proximity prevents time zone delays and enables an Agile approach to development and testing–offering the ability to perform bug fixes and incorporate feedback as needed. Additionally, similar cultures and English-speaking teams mean fewer misunderstandings and higher employee satisfaction.

Companies can achieve faster time-to-market and deliver higher quality end-products while avoiding the costs and slow ramp-up of hiring internally.

5. Nearshoring’s Convenience and Benefit

By nearshoring to Mexico, the opportunity for increased face-to-face time becomes more possible because onsite visits are more feasible.

Not only is face-to-face time improved, by being in the same time zone, it’s more likely that you’ll be working at the same time as your nearshoring partner rather than in completely different time zones, which can create lag time in communication and completion of project tasks.

As we all know, software development projects change often — and frequently without notice, so nearshoring better facilitates Agile software development outsourcing.
Nearshoring to Mexico Map

The Problem with Traditional Software Development Outsourcing

Traditionally, tapping into the most affordable and skilled talent pool for software development outsourcing meant working with companies in far-flung locales such as India, Eastern Europe, or China.

Unfortunately, regardless of talent and access to the right tools, many companies have found that outsourcing software development to India or China comes with a long list of barriers that cancel out the cost-saving benefits of working with an overseas team.

One of the first problems a business may encounter when outsourcing software development to India or China is that there may be communication problems.

These communication problems typically take on a few different forms:

  • There is a language barrier and/or there is lag time because of the time difference when working with these distant countries.
  • India and China also have very different societal norms and cultures and, while it is not always the case, these factors may influence the quality of the final product.
  • In addition to communication concerns, many companies may outsource in an attempt to improve ROI only to discover that there were no actual cost savings realized. That might be due to delays, communication issues, low-quality code, among countless other reasons.

Whether outsourcing software development services near or far, there are certain things that many companies would consider ‘deal breakers.’

These deal breakers are problems that arise at any point during a project that are clear indicators that the outsourcing relationship should be ended or significantly adjusted.

Here’s a look at what we consider “outsourcing deal breakers that can cost you the project:”

  • Project Issues
  • Blame Assessment
  • Communication Problems
  • Technological Differences
  • Organizational Differences

If any of the deal breakers should arise, you must address them as soon as you become aware that they exist. Otherwise; you run the risk of costly development errors, delays, low-quality products, and all-around frustration.

 

 

Software Development Outsourcing Services You Can Count on

At Tiempo Development, we offer high-quality software development outsourcing solutions built on our unique Agile development framework, the Tiempo Quality System (TQS).

Our team members speak English well and operate in the same time zones as our US clients, allowing for seamless communication during normal work hours–with no language or cultural barriers that stand in the way of progress.

Learn more about how Tiempo’s software development outsourcing services can reduce costs, shorten time-to-market, and deliver game-changing ROI. Contact us today to speak to an expert.

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