A Complete Guide to Nearshore Software Development Outsourcing.

Nearshore-software-development-atlanta-georgia

We are living in the age of technology, where data and digital communication are the “new oil”. Businesses of all sizes have come to rely on software for nearly every aspect of their operations, from inventory management to human resources. And as the world goes increasingly digital, the demand for software only continues to grow.

Alongside the new trend, the world is facing the largest software developers talent gap in history. The companies are striving to find the right mix of skills and experience locally, often turning to outsourcing as a solution to tackle the problem.

The software outsourcing basics.

Outsourcing software development entails the use of a third-party contractor to perform work that could have been done in-house. Nearshore software development, for example, is an outsourcing model that allows companies to focus on their core competencies while still saving time and money.

There are three types of software development outsourcing models: nearshore, offshore, and onshore. The rise of software development outsourcing as a way to gain a competitive edge has led to much debate over which of the models would work best for the long-term goals of companies in the US or EU.

Now let’s take a closer look at nearshore development and how it stands out as the top option for businesses.

What is nearshore software development model?

Nearshore outsourcing refers to the process of delegating tasks, particularly those related to software development, to neighboring countries in an effort to have more control over operational expenses. Nearshoring has a number of well-known advantages, including similar language, cultural proximity, and convenient time zones and geographical locations.

For example, Poland can serve as a perfect nearshore country for the Middle East (UAE and Israel) and Western and Northern Europe (United Kingdom, Germany, Netherlands, Sweden, Finland, Denmark, and Norway).

Nearshore software development services emerged to meet the demand of businesses that wanted to reduce time and distance offsets. These organizations learned that working with a nearshore firm saved them money while allowing them access to personnel for specific activities that could not be handled in-house.

Nearshoring vs onshoring

Onshoring refers to outsourcing software development work to a site within the same country. Onshoring is a form of domestic software development outsourcing. Software development projects are sent out of the country to another location. There are several advantages to onshore software development. Because the third-party team is in the same nation, communication with them becomes much easier and face-to-face meetings are possible. It also removes any cultural, legal, or tax issues connected with working across borders.

Onshoring, on the other hand, is more expensive than other outsourcing strategies and does not always alleviate the scarcity of skilled personnel. If there’s a dearth of talent in an area, it may also be a problem with local talent. Skilled developers, designers, and engineers frequently prefer to work for overseas companies. As a result, finding the best talents from within the country working at an on-shoring firm is often difficult.

Nearshoring vs in-house teams

It’s worth noting that in-house software development isn’t a form of outsourcing. If you’re creating software, one alternative is to keep it all inside the company, using its own personnel and resources. Many CTOs believe that in-house development teams are preferable for scaling software operations. You have complete control over the vision and product development by establishing an in-house software development team.

Overall, although there are many advantages to hiring technical in-house staff, it is often not possible for businesses. Software development projects necessitate the participation of a number of people with diverse talents and knowledge. Hiring specialists isn’t simple or inexpensive, and depending on the location, finding qualified candidates might be difficult.

Even if you hire a complete in-house staff, you must ensure they have access to the tools they need to do their work. This can be quite pricey and significantly raise your project budget. Finally, establishing an in-house staff might not be the answer in the long run.

For example, if you are wondering how to get started developing a website, we offer affordable and quick software programs that can be utilized on any sort of operating system or device. In certain areas, enterprises simply need help with a short-term or medium-term project from a team of developers. Nearshoring and other outsourced programming solutions allow companies to scale down personnel when they are no longer required. It is considerably more difficult to reduce staff when you have in-house talent.

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Nearshore vs offshore: How is nearshoring different from offshore software development outsourcing?

Offshoring is the process of outsourcing IT services to distant locations in order to have a more streamlined hiring and budgeting process. Companies frequently choose nations with a large talent pool and lower hourly rates or salaries when seeking for a suitable vendor.

Time zones are also an important consideration during the selection process. To conduct calls and online meetings, in-house and remote teams must have at least a few hours of overlap. An offshore team can provide you with a high-quality product while still saving money at the conclusion of the project if you take the appropriate actions and exercise caution when making your choices.

The only factors that determine efficiency of offshore development are the quality and costs of engineers. Most of the time, offshore companies are located in another part of the world. For example, a company in Poland can be an offshore company to one in the US. One in Germany would be an offshore company one in Mexico.

On the other side, nearshore software development is the polar opposite, paying more attention to a much closer region. There are times when the difference in time between the two firms involved is greater than usual, but as long as the vendor is close enough to the employer, it’s considered nearshoring.

The advantages of partnering with a nearshore software development company.

Nearshoring is good for your business due to a number of reasons. Here are a few of them:

1. Access to the know-how and a larger talent pool

The large worldwide talent pool is one of the main reasons why businesses are choosing nearshore software development. Because it is difficult to find expertise in each field and skill in-house, this is a major benefit of nearshoring.

When you outsource, you gain access to a trained staff in other countries—increasing your horizons and technological capability. It also gives you peace of mind knowing that each stage of the creation process is handled by an experienced team without the need for any additional training or supervision.

2. Lower costs of software development process

When you outsource software development, the income differences between developed and developing countries are significant. When you outsource, you save a lot of money on employee compensation and benefits (However we do not recommned taking cost as a major factor in software development process).

As a result, outsourcing software development and operations to developing nations generates larger economies of scale and lowers the cost of outsourcing software development and operations than doing it in-house.

Global Offshore Software Development Rates Comparison

For more information regarding nearshore software development services rates please take a look at this article: https://nxtide.com/offshore-development-center/global-offshore-software-development-rates-comparison-by-country/.

3. Improved security

Assuming your in-house team doesn’t specialize in IT, there’s a chance that your software’s security is not secure. When there are security holes, your firm and its reputation are always at risk.

Nearshore software development companies offers more comprehensive coverage against security breaches on the IT front. There is a software team that will make sure the code and processes included in the development are safe and secure at all times.

4. Access to a scalable team

When demand is at its peak, you’ll need more resources. This generally necessitates the redistribution of in-house resources to processes and operations they aren’t knowledgeable in. It may also urge you to recruit new staff to assist with the workload. Unfortunately, both alternatives result in reduced effectiveness and increased expenses.

Parntering with w nearshore software companies, however, allows you to hire a scalable team for a fixed time period without the need to hire full-time employees permanently. Once the workload is balanced, you can save big bucks and encourage productivity.

5. Shorter “go-to-market” time

Companies around the world have recognized the importance of speed in operations and how it can be used as leverage against the competition. With nearshore outsourcing, there’s no need to depend only on available in-house resources to launch a product. Your nearshore software development vendor can adjust team extensions to product roadmap and simply allow the team to move faster.

With more control comes greater flexibility, as you have complete control over timelines according to your own schedule. Dedicated developers are also available to deliver IT services according to that particular timetable.

6. Improved risk management

Experts advise diversifying your investment portfolio rather of putting all of your money in one basket to minimize risk throughout the investing process. The same can be said for nearshore outsourcing. It’s highly volatile, so you’ll need a solid risk management strategy to ensure long-term success.

You may reduce risks by dividing operations and components and handing them out to several vendors. Just make sure you do some study, contact previous clients of your vendor, evaluate their industry expertise, and then decide if they are the right one for you.

7. Improved focus on core business

In today’s competitive tech business, firms must find new methods to develop and grow in order to remain competitive. Nearshore software development outsourcing not only minimizes attention on core procedures, but it also prevents your in-house staff from being bogged down with responsibilities that are beyond their abilities. This allows them to concentrate on long-term strategic objectives while still contributing to the company’s success.

As a result, your business processes are streamlined and resources are allocated to more important areas.

8. More support options

The software requires ongoing support and maintenance. After product release, a specialist staff is required to manage the constant changes and flaws. You are already paying your software team for assistance and upkeep since you use nearshore development.

Some nearshore software development companies provide great options of support services after the project is finished.

How to find a good nearshore development company?

Nearshoring Now that we’ve determined the benefits of switching to nearshore software development, it’s time to discuss how you can find a reliable service provider for your company. Below are some factors to consider when selecting a nearshore company for your software needs.

Commitment to security

With more businesses turning to third-party providers to safeguard their goods from cyberattacks, you need to understand how a service provider intends to incorporate security into your program. A good nearshore partner should be able to show you their commitment to cybersecurity by offering a proper overview of their strategy. They must also demonstrate their way of handling sensitive data, backups, and storage. An effective security plan starts in the planning stage and should go on through the testing phase.

Proven track record

Before fully committing to hiring an outsourced partner, it’s imperative to carry out due diligence and research their reputation in the industry. One great place to look at is the vendor’s official website. Are there testimonials from verified former clients that attest to the work quality they provide?

It’s also wise to check their portfolio and the projects they have completed in the past, as well as the outcomes of those projects. Reliable nearshore software development companies can proudly discuss their previous projects with confidence. This serves as proof that they were able to deliver a solution that reached the client’s standards.

Pro-active, clear communication

A trustworthy nearshore company puts communication at the top of its priority. Through the use of project management tools (i.e. Trello, Basecamp, Hira, etc.), a company shows its commitment to ensuring clear communication with clients. Communication platforms allow remote and in-house teams to collaborate better. These channels also enable teams to directly reach out to clients.

With open communication channels in place, you’ll have an overview of how the project is progressing at each stage. You can see who is responsible for certain tasks and when they are scheduled to be completed.

Tech expertise that matches your skill gaps

Outsourcing software development to a neighboring nation allows you to choose from a larger number of highly-trained individuals. After assessing your in-house staff’s abilities, it’s time to outsource the knowledge that it lacks.

For instance, your internal team may be excellent in terms of UX design but lacks the JavaScript expertise to make your product functional. When looking for a nearshore partner, they should provide the skills that complement your existing IT infrastructure for better results.

Structure of governance and management

It’s usually a sign of good practice when a nearshoring partner follows ISO, ITIL, or other standards. If you want to know if they’re a good fit for your organization, look to see whether their governance structure is similar to yours.

Examine how they approach stakeholder management, independent testing, issue logging, and risk registers. Find out the company’s perspective on transparency and reporting, as well as the amount of control you can have over the development process. The more aligned your company is with the service provider, the more efficient the process of development will be.

Flexibility in T&C area

Software development, much like any other project, entails its own set of difficulties. However, with improved architecture, these obstacles will be considerably simpler to overcome. You’ll have a more efficient and cost-effective development process if non-functional criteria such as scalability, data migration, performance, and security are considered from the start.

Is your nearshore software development partner capable of adapting to change when necessary? Do they excel at adopting various working practices? Are they experienced when it comes to applying certain approaches to software development? Those are a few of the questions you need to ask before settling on a service provider for your software development project.

Top 10 reasonsto open nearshore software developmenr office in Poland.

1) Location and tome-zones

Time zones are also an important consideration during the selection process. To conduct calls and online meetings, in-house and remote teams must have at least a few hours of overlap. An offshore team can provide you with a high-quality product while still saving money at the conclusion of the project if you take the appropriate actions and exercise caution when making your choices.

The only factors that determine efficiency of offshore development are the quality and costs of engineers. Most of the time, offshore companies are located in another part of the world. For example, a company in Poland can be an offshore company to one in the US. One in Germany would be an offshore company one in Mexico.

On the other side, nearshore software development is the polar opposite, paying more attention to a much closer region. There are times when the difference in time between the two firms involved is greater than usual, but as long as the vendor is close enough to the employer, it’s considered nearshoring.

2) Attractive nearshore software developers rates.

Polish software developers are among the most affordable in Europe. Their rates are up to 60% lower than the rates in other Western European countries. The typical hourly rate for a Polish offshore developer is $25-$35, which is much lower than the rates in the UK ($50-$100) and the US ($75-$150). The table below shows some more details on this topic.

Global Software Developers Rates by Region - NxTide

3) The country has a well-educated and highly skilled workforce.

As mentioned before, over 60% of Polish software developers have university degrees in computer science or mathematics. Additionally, the country has a well-educated and highly skilled workforce. According to the latest World Bank report, Poland ranks high in terms of pupil-teacher ratio (1:14) and gross tertiary enrollment rate (77%). This places Poland ahead of countries such as Germany, France, and the UK.

The polish student’s scores are also pretty good. In the latest PISA (Programme for International Student Assessment) study, Poland ranked 13th out of 72 countries in mathematics, 9th in science, and 5th in reading. This proves some huge human potential for offshore / nearshore software development services.

4) Polish software engineers are fluent in English making communication easy and efficient.

Polish software developers are fluent in English, which makes communication easy and efficient. In fact, most of them have at least C1 level of English proficiency, according to the Common European Framework of Reference for Languages. This makes it possible for companies to communicate with them directly without the need for any translation or interpretation services.

Communication with software engineers is a very important factor in setting up a successful Nearshore Software Development Office or Offshore Development Center.

The Hackers Global Rank placed Poland 5th in the world for software development outsourcing. The other ranks that prove the high quality of skills:
– Nearshore Value Index: Poland is in 3rd position
– The best offshore destinations for IT outsourcing: Poland is in 5th position
– 50 countries with the best developers: Poland is in 8th position

6) The strong work ethic.

Polish workers are known for their strong work ethic through years of working abroad and in many BPOs. They are highly motivated and always willing to go the extra mile to get the job done. Close relations with the western countries provided also huge improvements when it comes to standards and frameworks crucial for the effectiveness of work.

Here is a quote from one of the former MS-Tech Directors: “I am extremely happy with the developers I have working for me and would not hesitate to recommend this destination to anyone looking for a nearshore software development office.”

7) The favorable location.

Poland also has a strategic location – it is located in Central Europe, making it easy for companies from all over the world to reach it. Additionally, Poland has favorable time zones – it is in the same time zone as the UK and the US, which makes it possible for companies to communicate with their developers easily and efficiently.

8) The vibrant business climate with great infrastructure and a stable economy.

Another important factor to consider before setting up a nearshore development office or offshore software development center is the business environment.

Poland offers a favorable business climate with low taxes and a stable economy. In fact, it is one of the most promising economies in Europe. The global “Doing Business Rank” place country in the 38th position, out of 190 economies.

Poland also has excellent infrastructure, including high-speed internet and transport links. This makes it easy for companies to do business without any limitations. According to the latest data, the country has the fastest average internet speed in Europe – at 113.6 Mbps.

9) Poland is a member of the European Union since 2004.

Poland offers great potential for offshore software development. As a member of the European Union, it provides investors and companies with access to the largest single market of over 500 million people. This is a very significant advantage over many offshore software development locations.

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10) The developed business support and outsourcing services sector.

Poland has a well-developed business support and outsourcing services sector. This includes a wide range of services, such as legal, accounting, HR, and marketing services, which companies can use to help them set up and run their nearshore software development office or offshore development center.

Build-Operate-Transfer option.

There are a number of different ways that companies can set up their offshore / nearshore development office in Poland. One option is the Build-Operate-Transfer (BOT) model. Under this model, the local software development company (partner) sets up and operates the offshore / nearshore development office for a period of time (usually 3-5 years), after which it transfers ownership of the office to the client. This BOT model has a number of advantages you can read in this article.

Looking for a solid nearshore software development company?

Opening a Nearshore Software Development Office in Poland can be a great opportunity for businesses looking to outsource their software development projects. By partnering with a reliable and experienced nearshore development company, you can get access to a team of skilled software developers who can help you deliver high-quality projects on time and within budget.

Looking for a Nearshore Development Office in Poland? Contact us now! We are a reliable and experienced nearshore development company with offices in Krakow, Warsaw, Katowice and more.

About Us:
NxTide is a specialized company focusing on building local, Software Development Teams or larger Software Development Centers in major cities in Poland. We take care of all recruitment and quality control processes making it faster and more cost-effective for you. Here is some more information about our expertise: – Over 7 years of experience in creating a variety of software development teams – Over 60 teams and 300 engineers successfully hired and deployed – Several dedicated HR and IT Project Management Teams acting on your behalf.

Please take a closer look at a dedicated and flexible offer we have prepared based on market needs:
1) Software Development Teams: dedicated to clients looking to expand their software development teams or create small remote teams from scratch.
2)
Offshore Development Center: dedicated to larger and permanent projects. We’ve implemented the innovative Build Operate Transfer model to make the whole process faster, more efficient, and transparent.
3) Nearshore Software Development Office: dedicated to larger and permanent projects within the same region, and continent.

Create a Nearshore Software Development Office with NxTide

Over our 7-year company activity we have helped many US and EU companies to successfully build Software Development Teams and Software Development Centers in a variety of locations in Poland.
Interested? – Let’s discuss your case on a call.
Marcin Dziedzic, CEO of Pragmatic Coders and NxTide.

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IT Outsourcing, Offshoring & Nearshoring in Poland

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