Nearshore software development model – a forced necessity or a great opportunity?
Nearshore software development model – a forced necessity or a great opportunity?
Lately, the buzzword nearshore or nearshore outsourcing is heard more and more often, but many companies still do not know its meaning or are confused by its semantics. In reality, the nearshore software development model provides a wide range of benefits both to you as a client and to your future product. Thereby let us have a closer look at this subject.
What is the nearshore software development model?
First of all, let’s explain what does nearshore software development means. It implies that development outsourcing happens on the neighboring territory or within a similar time zone, but outside your country. For example, Poland is located in a one-time zone with Europe, and therefore it makes sense to outsource software development projects to Polish software developers. Nearshore can also be considered as a model for working together between two distant countries sharing the same values and cultures, even though both are different at the first sight. Such an approach allows us to provide cost-efficiency of local offshore development plus the quality of communication close to onsite collaboration.
Just a short summary here: There are three main types of IT outsourcing: offshore (India), onsite (in house team), and nearshore (close country eg. Poland).
The types of nearshore software development services
When considering nearshore software outsourcing we all ask ourselves one important question: should we hire a nearshore software development company or build our own nearshore development team? Certainly, there are many ways to achieve your goals. The final solution depends on your actual needs. Let’s assume that you’re a startup company from the healthcare industry that you’d like to create a web application. The project will last 6-12 months for design and development. In this case, you could simply search for custom and skilled software developers. However, if your needs are more long-lasting and strategic you should consider setting up your own nearshore development team or even nearshore development center.
But what are the nearshore software development benefits?
More than an outsourcing option, nearshoring is a whole new business trend. It is also considered to be one of the most effective ways to communicate with your client. So let us have a closer look at why-do you should consider nearshore software development services based on the example of one specific location – Poland.
1. Access to the fresh talent pool
We believe this should be named as the fisrst, mmost important factor. Why? It is not a surprise that the global IT skills shortage is upon us. The situation will get only worse for western economies in the next decades. The need for offshore and nearshore software development services seems to be a necessity. But maybe it could be considered also as a chance for flexible, agile, and modern companies to find a competitive advantage from this crisis?
Let’s take a look at Poland – a worldwide leader in software development outsourcing. The IT market is booming. The crisis in one region has created a chance for the other. Polish nearshore software developers are not cheaper than software developers in India or China, but they are providing high-quality and skills enabling them to solve difficult problems within short deadlines. A well-composed nearshore software development team can definitely outperform the competition.
2. Cost effectiveness
The costs of software development in Poland are of course slightly higher compared to other countries like India or China, but what’s more important here is that they rely on the same principles as in Europe – wages are paid for work, not for time spent by employees at their workplace. What does it mean? The daily rates for Polish nearshore developers making software applications are approximately 60% lower than in the USA or Australia (with a similar productivity ratio).
3. Quality od work
Quality of work is a major concern for every software company. In the case of nearshore outsourcing Poland is probably one of the best countries to choose from among many others not only because it has attractive rates and location, but also because there are so many international companies operating in Polish software market and hiring local skilled developers. Polish software engineers are ranked as one of the best in the world (3rd place in the Top 50 IT Outsourcing Destinations).
4. Educated workforce
Some say that ability to learn continuesly is the most important skill of the future. That is why educational background matters. In general, Poland offers one of the most educated and skilled workforces in Europe. According to a recent report by CBR Online, Polish graduates rank among the best students in Europe. Poland’s universities produce approximately 170 000 graduates annually with over 80% of those holding at least an upper-secondary qualification. Some estimates even say that as much as 10 percent hold university degrees.
5. Time zone compatibility
Poland works in the CET timezone which is very close to most European countries and America. Working hours are limited between 9 AM and 5 PM, so it’s hard to imagine that your software developers would need more than 2-3 hours to solve any problems, whereas other places like India work for 12 hours per day leaving just 4-5 hours for solving critical issues or answering emails at night. Such a time difference makes Poland an ideal option for nearshore software development.
6. Control over the project (Yo’re still a boss)
Working with Polish software development companies or nearshore software companies does not mean that you lose control over the process. For sure, if you have a project manager from your team in Poland you will be able to control everything much easier, but even without it you will remain the one making the final decisions.
7. Cultural alignment
Working with a nearshore development team located in Europe might be a little easier than working with nearshore developers from Africa or Asia due to some cultural differences. This does not have anything to do with racial differences or stereotypes – but rather regional structures,culture. Of course there are many other factors that influence the communications between you and your software developers, but it’s worth mentioning that living far away has some negative impact on building a strong relationship and understanding.
8. Business environment
Poland is considered to be one of the best countries in the world for doing business. The Business Environment and Performance Survey has published by the World Bank and International Finance Corporation, demonstrates that Poland ranks 20th out of 183 economies around the world and 5th among EU member states after Sweden (1st), Denmark (2nd), Finland (3rd) and Austria (4th). What’s more – it was ranked as 1st in Eastern Europe! These facts support businesses to make software outsourcing decisions based on their own experience by giving them great insight into the Polish market, its potentials, and advantages over other alternative locations.
9. Intelectual property regulations
It is not a surprise, that “know-how” is extremely important when it comes to any form of outsourcing. Many companies forgot about it when rushing into offshoring to Asian markets in the last decades. It occured to be a risky trade. The Polish legal framework provides strong protection of intellectual property, e.g. patents, trademarks, utility models, and copyrights in accordance to EU / US regulations.
10. Successful expamples: Google and Facebook
Google has been operating from Poland since 2003. The company’s decision to enter the Polish market was highly supported by the fact that Google can easily find local software engineers who are able to help the American giant to create its services for a worldwide audience. Facebook set up a development center to employ around 300 people in Wroclaw, where they were working on the development of new Facebook features, such as chat and timeline.
According to the market rumors, Microsoft, Google, and Oracle are planning to enter the Polish IT service market in the next couple of years which will create more jobs for software developers in Poland.
How to build your first nearshore development team in Poland?
Now that you have learned some interesting insights about the Polish software industry, let’s step back and consider how to enter the market.
We recommend taking your time to plan your next steps. Consider all the possible options thoroughly. It is very important not to rush anything when it comes to choosing a partner in Poland or any other country for outsourcing services.
The first step should always be to do advanced research. Get to know the market, understand what sort of problems Polish software development companies will solve for your business. It is also beneficial to discuss possible engagement models with an experienced software development company in Poland.
1. Choose the right nearshore IT, partner
The Polish market is quite mature. There are a lot of nearshore software development companies offering that can help you with the process. Some of them have developed a strong network of business partnerships that might speed up the recruitment of software engineers or choose the best city and office on a very attractive condition.
2. Choose the right location
The best location for your software development company should be near the main business hubs and universities, but not necessarily in the capital. Poland has a high density of technology-oriented schools and universities such as Warsaw University of Technology (180 000 students), AGH Cracow University of Technology (20 thousand) or Wroclaw University of Science and Technology (50 thousand) which makes it a very favorable local market for the software industry. These educational institutions are directly linked to the job market – they provide an excellent feed of qualified graduates for companies. We have written a dedicated article regarding a good software development hubs locations here.
3. Plan your nearshore development team in advance
It is obvious that every nearshore team will require a good mix of software engineers, IT project managers, UX designers, although we still observe many misconceptions and missunderstandings. The correct strategy and clear goals agreed upon between you and your local nearshore partner (or outsourcing company) will mitigate most of the risks and help build your nearshore dev center faster and cheaper.
4. Focus on software developers quality
Don’t be hasty or too optimistic. Finding good software developers takes time. It is important not to consider it a failure of your nearshore development center if you don’t get the team you expected on day one. Sometimes it takes time to find quality candidates with a perfect match to your nearshore development team – but when you find them – it pay’s off in a long term.
5. Take care of your employees wellness and teams’ morale
This is something you should work closely with your local IT partner from the early beginning. The team morale and individual motivation go in line with company values, goals, and growth potential. The latest surveys show, that Polish software developers are most concerned with transparency, flexibility, career development opportunities, and work-life balance.
Creating first BOT Software Team or Software Development Center with NxTide
NxTide is a specialized company focusing on building local Software Teams or larger Software Development Hubs 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 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 on 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.
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