You’ve probably heard a lot of about nearshore software development in recent times. People have been moving between onshore and offshore development for decades with varying degrees of success. Nearshore development offers the promise of good profits with less risk of cost and quality issues. This strategy is allowing many businesses to gain the best of both worlds.
What is nearshore software development?
When a company uses software developers from a nearby country to write software, we call this nearshore software development.
Later we are going to talk about some of the other software development strategies. These strategies will help put this one into perspective.
What are the advantages?
There are a number of reasons to consider this strategy.
Lower cost can be one of the factors that companies take into consideration. Some countries are able to pay their workers a lower wage. This can happen when there is a big difference in the currency exchange rate.
Another advantage of nearshore software development is to gain access to skills that are hard to find in your own country. Today we can easily collaborate with people from around the world. This allows us to expand our team to include people who are the best in their field.
Additionally, it is possible to expand your team while avoiding some of the disadvantages of strategies such as offshore software development. For example, timezone differences can be greatly reduced or eliminated with this approach.
Are there any disadvantages?
Every strategy has it’s own unique blend of strengths and weaknesses.
For nearshore development, there are a number of key disadvantages to watch out for.
Are you close enough?
One potential disadvantage of nearshore software development is distance. Agile teams, traditionally, rely on close proximity to increase their performance. The further people are from each other, the more “expensive” communication becomes.
Two people sitting next to each other can quickly talk and discuss issues. But if you add friction, the effort needed to communicate increases as well. This makes communication less likely or less frequent.
Things that add friction include separating team members by:
- physical barriers like cubicles
- the space across the floor of a building
- different floors in a building
- distant buildings in a city
- various cities in a country
Each layer of friction means that additional planning has to happen before conversations can happen. Instead of talking within a few seconds you end up talking hours or days later. This increases project costs and makes meetings less effective.
Do you understand each other easily?
Another problem can be language. We live in a diverse world with hundreds of languages.
Languages are amazing for a whole lot of reasons but…
They’re like a form of encryption. If you don’t know how to decipher the message it can be lost completely.
Yes, you can put processes in place to reduce language issue. But hiring translators for meetings and written communication can lead to a lot of miscommunications.
Often, the easiest approach is to require everyone to speak the same language. But this can be difficult for people who are less fluent than they would like.
When choosing a nearshore software development partner it is best to choose teams that are highly proficient in your current team’s language.
Is your culture similar?
Culture is a wonderful thing. Our world is full of many amazing cultures. This makes the world a better and less boring place!
However, sometimes things can get a bit tricky. Culture decides the common rules that people follow. Trouble is, these rules can be the exact opposite between cultures.
What is polite in one culture can be extremely offensive in another. When two teams have a conflicting culture the result can be chaos and a lot of hard feelings.
Choosing a nearshore software development partner that has a similar culture to your own can help reduce the issues you have. For example, if one team’s culture is to collaborate while the other prefers to work independently then you will have problems.
Collaborators will feel like the other team doesn’t like to coordinate their efforts. On the other hand, independent teams may feel the other team is too clingy and involving them in too many meetings.
Can you be certain about the quality?
When you are separated by distance, culture, and language you will face a lot of challenges with keeping quality high.
You need to make sure that your nearshore software development partner has a same commitment to quality as you.
There is nothing more frustrating than paying hundreds of thousands of dollars for a team to write low-quality software. Low-quality software leads to an expensive maintenance phase. Sometimes, this can even lead to costly re-writes.
If possible, you should confirm their quality standards by closely inspecting their previous work. A team’s output quality doesn’t increase dramatically overnight. Team’s with a long history of writing quality programs are more likely to give you a better outcome.
When should a company consider this strategy?
Nearshore software development can be great for your business.
If you are able to find a partner that meets most or all of these points below, then you may want to consider this approach:
- A Highly professional team that produces amazing software
- Speaks the same language at a comparable degree of fluency
- In a timezone that overlaps closely with your current team
- Has a similar culture and proven commitment to quality
Are there alternatives to nearshore development?
Absolutely! Nearshore software development isn’t the only game in town.
There are several other strategies that you should definitely consider.
These strategies include:
- In-house software development
- Onshore software development
- Offshore software development
Ultimately, you want to choose an approach that is right for you and your team. The right approach will allow you to create software that helps a lot of people and makes a lot of money too.
What is in-house software development?
This is when a company uses its own employees to write it’s software. Typically, this is done on the same premises as the rest of the business. Developers are able to work closely with a number of teams within the business to define and implement solutions.
Just like nearshore software development, there are a number of pitfalls with in-house development.
It can be expensive to train up people to be world-class specialists. This is especially so for businesses that don’t have a large number of technical employees.
Furthermore, employees can be very expensive in some countries. The expense can be well worth it if the quality remains high and is profitable.
Alternatively, if high quality can be achieved at a lower cost, then it makes sense to seek higher profits.
This strategy works best when a company wants to keep its valuable intellectual property from falling into the hands of potential competitors.
What is onshore software development?
When a company has teams in different locations in the same country, this is called onshore software development.
This is different from in-house development because the additional team members are not employees of the company.
Furthermore, it is different from nearshore software development because team members live in the same country.
Sometimes, individual freelancers or contractors are hired for their specialist skills. Other times, companies will partner so that their strengths can be combined.
This strategy can help a team to scale beyond the four walls of a single building.
What is offshore software development?
Offshore is when a company partners with programmers from a different country. Often, one that is halfway around the world.
Examples include companies in the United States of America using development teams in China or India.
When done right, this approach can be highly profitable due to the massive reduction in pay rates.
Another big advantage of this approach is that companies can start to operate 24/7. By having teams placed strategically around the globe, there can be a continuous output of work. For many businesses, this is a huge competitive advantage.
On the other hand, the challenges of language and culture can lead to quality issues. When done poorly, project costs can skyrocket and fail.
Unless you are highly certain of the reliability of your offshore partner you may wish to pick someone closer to home.
