How to Gain Maximum Business Value Through a Rightshore Software Delivery Partnership?
In the era of digitalization and digital transformation, terms such as nearshore and offshore software delivery are gaining more and more popularity since people are considering them a synonym of reduced costs and more affordable labor. These two statements are not necessarily false, yet many organizations fail to realize the importance and real benefits of a nearshore/offshore software project delivery. The dynamic evolution of technology has made it possible for businesses to overcome distances, bridge cultural differences and unite for the sake of success and enhanced outcomes.
In this article, we will explore the benefits of nearshore/offshore software delivery models, all associated risks and how to mitigate them, as well as how to ensure a sustainable model, which alleviates the cons and boosts the pros.
What is driving businesses to build nearshore or offshore software partnerships?
Local, regional companies were facing the challenge of whether to go global and start building software solutions for international corporations and SMEs or stay local and grow at a slow pace. Some businesses have changed, in order to scale and step on the global scene with the big players, whereas others have chosen to stay away from the global competition. Software Development companies, which embraced the globalization underwent many changes within and are constantly adapting to all market challenges of today’s Big Society.
“Who delivers and from where, is not important if the actual outcome brings tangible business value, security and quality.”
Lyubomira Mihaylova | Managing Director | ScaleFocus UK
The nearshore and offshore software delivery models inevitably attract high attention by giving international companies the opportunity to scale their operations and reach new horizons. Big companies, which need to be constantly up-to-date with all technological advancements face two options – one is to build and maintain an internal software solutions team, the other is to adopt the nearshore/offshore delivery model and find the right partner, who has expertise, experience and know-how in various fields.
Pros and cons exist in both models, yet retaining a sustainable internal IT talent pool is becoming harder than ever. The traditional IT delivery models, which rely on partnerships with local vendors are highly location and cultural centric, whereas offshoring reverses to process-centric and location-agnostic.
Let us look at the main reason companies are turning to nearshore/offshore software delivery models: capitalize on inexpensive, still quality labor force. This, however should not be the only purpose, since many people associate lower prices with mediocre quality. This may be the case sometimes, yet if you manage to find the right technology partner, you will benefit from high quality at a fairly set price.
Building an internal dedicated IT team is costly, since you will have to choose the right talent for the respective project, onboard them, pay monthly salaries and scale their knowledge to always be up-to-date with the latest trends in the world of technology. Furthermore, your company may now need to go through a Data warehouse migration and later on build a new mobile application. Technology experts from various backgrounds are needed for the successful execution of both types of projects and managing all of this with internal development force is simply not sustainable in the long run. These are some of the main reasons businesses turn to nearshore/offshore software development partnerships. There are some other specific benefits such collaborations bring, stated below.
Which are the key capabilities, coming from nearshore/offshore software delivery partnerships?
“I have found the right nearshore software development partner in the form of ScaleFocus. Their key capabilities lie within their ability to go deep into your specific business requirements and understand your needs to find the most innovative solution. Furthermore, their personalized approach towards the client is what makes the business relationship even more successful.”
Mark McKenzie | Ultratex
Business goals are easier to achieve with the right technology and IT solutions partner by your side. Different software delivery models have been established to help organizations thrive in today’s dynamic environment. Many countries fall behind when it comes to finding and attracting top talent, so instead of wasting time and resource, they are starting to rely on the popular onshore/offshore software delivery models.
Recent data shows that the US companies alone have relied on those models and hired more than 93,000 people from foreign countries for certain specific projects in the last two years alone.
In this section, we will explore the key capabilities your nearshore/offshore software development partner should needs to possess and how they can drive your business’ success.
Capability #1) Using outcome-based contracts
The perfect nearshore/offshore technology partner will want your business to succeed as much as you do and be willing to play an all-in game as for everything to be delivered on time, within budget and with highest quality. This type of risk-sharing process ensures both sides of the equation will add-up to the final number as equals. In short, your nearshore/offshore software delivery partner needs to embrace your goal and own it as well. A partner means also an advisor, a friend and a challenger, always with the aim of driving better results.
Capability #2) Thinking-on-the-spot, with high analytical capabilities
The ability to act quick in a fast-changing environment and think outside of the box is a capability, your technology partner needs to possess, improve and master. If you are not sure what type of solution you need, your strategic tech ally needs to have high analytical skills, in order to asses your current situation and be able to respond to the need with the most convenient proposal.
Capability #3) Adaptation from both sides
Your nearshore/offshore technology partner should be adaptive in terms of your team’s culture as to fit your company’s core values. Businesses follow different flows and already have established “rules” on how processes should go. Ideally, your partner should be flexible enough and adaptive as to fit well within your organization, without disrupting the already set process flows.
Capability #4) UX/UI driven customer experience
Solid design and technology-creative capabilities are crucial in today’s dynamic society. In order to thrive, you will need to bring-in your best game. The ideal nearshore/offshore technology partner will be customer-obsessed and dedicated to providing the end user with the best experience, functionalities and a state-of-the-art user interface.
Capability #5) Open-minded and easy-going
Open-minded people tend to give alternatives to every view and come back with relevant feedback, prior rushing to choose a solution. Your partner should be open to new and fresh ideas and always challenge opinions as to pick the most suitable technology stack and stay open to the need of modifications, as time passes by.
Capability #6) Attitude of commitment to life-long learning, disrupting, innovating
Innovation comes from within. It is not merely the act of creating something new and unseen so far, it is the act of using something already established to solve an ongoing problem. Your ideal software development partner must live by that and embrace it as part of the overall company mission and vision. Being up-to-date with everything going on the market, requires drive and inspiration as innovation is actually a commitment to life-long learning. Choose the right ally, who has adopted this attitude and implements it on a daily basis.
What are the associated risks with nearshore/offshore partnerships?
Every business relationship has its hidden underwater rocks, which usually concern most of the organizations, seeking to build nearshore/offshore software delivery partnerships. There is no silver bullet to mitigate the existing risks altogether, yet there is a cure for each disease. All associated risks with nearshore/offshore software delivery models can be alleviated by entering in the appropriate partnership. In this section, we will explore the most frightening ones and advise on how to diminish their effect on your business relationship.
Risk #1) Information leakage
Keeping company sensitive information safe is a daunting task. Many companies fear information leakage and avoid trusting partners with it. This is one more reason why your nearshore/offshore partner needs to have well-established data protection policies, which ensure all client information is kept safe within the company and only used when necessary. Signing a non-disclosure agreement is a must yet getting to know your partner’s security policies is the next step you should take, prior deciding on whether to establish a business relationship.
Risk #2) Time difference
This is a big issue, especially when it comes to handling and resolving ad-hoc issues. Reputable software solution partners take into account this fact and adapt their schedules accordingly. When starting to think about it, this can be turned into an advantage, since your business will benefit from an ongoing development cycle, regardless of the geographical location.
Risk #3) Lack of experience with the remote delivery methodology
Your trusted technology partner needs to have solid experience when it comes to remote software delivery. Shaking hands with a company, which has little or no experience with managing dedicated teams in a different location is risky and may will not pay-off. Reputable vendors have well-established procedures when it comes to onboarding and managing employees, dedicated to your company’s project. They take care of all technical trainings, up-skilling and overall development of the remote team.
Risk #4) Lack of full control over the process
Entrusting an important project to a nearshore/offshore technology partner scares many companies, as they fear losing control over it or missing a point, if something goes wrong. The Dedicated team model are the best fit for such endeavors
Risk #5) Hidden costs
The words many businesses fear the most are hidden costs. A deal may look really cost-effective in the beginning, yet you may end-up spending much more than initially expected. That is why you need to do your homework and double-check the nearshore/offshore partner’s history in terms of successfully delivered projects, customer testimonials and referrals.
“Our best partnerships are with companies who outsource for what they can’t afford and not for the pure cost saving. They realize they’d rather leave it to a 1000+ software engineers company to handle their software, than try to keep an in-house team.
Once you have danced for some time with your software partner you need to change the paste and the music. Evolve the relationship, giving them even more responsibility so you can focus further into your core business. We often see frightened customers, who are afraid that something bad can happen when we take-over the responsibility for an entire system for example. However, those, who overtake this fear very shortly become free from the burdens of these activities and focus on what they actually need to do to grow their business.”
Metodi Amov | Marketing Director | ScaleFocus
Why is Bulgaria the “rightshoring” model for technology excellence?
The new generation of these types of models, which takes into consideration your location and specific needs is referred to as the “rightshoring” model. This type of partnership takes into consideration the geographical location of the partner, the key capabilities he has, the specific services he offers and how they fit within your business specific needs.
Bulgaria is country, which offers some of the best software engineers, according to world rankings and has emerged as a leading IT destination in Europe. Many Fortune 500 companies have entrusted their projects to Bulgarian technology companies and are experiencing the benefits of the rightshoring model. Choosing the right partner is not a daunting task, if you manage to align on everything prior you proceed to the actual execution.
Why is Bulgaria your dream destination for software development? Read our business experts deep insights in this blogpost.
In the end it all boils down to simple human relationships, based on trust, transparency and open communication. This is the golden formula, which will inevitably turn your needs into sustainable solutions, which bring tangible business results.