The complete guide to Nearshore

A new wave of technology growth is on the way!


The last year has seen companies adopting new technologies and driving their digital transformation efforts at the fastest rate in the last decade. The demands of social distancing, lockdowns and economic contraction have led to a new way of facing work by adopting new technologies and guarantee that companies, workers, consumers and governments stay ahead of the curve and not get left behind.

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CIOs are responding to this by reassessing their outsourcing models and partnerships to make sure they’re getting the best ROI they can for their immediate needs while also assuring their long-term strategy for when the economy rebounds is firmly in place.

Our comprehensive guide to outsourcing is designed to provide an end-to-end playbook to ensure that companies know how to prepare for, choose and manage their outsourcing partners to meet their short-term and long-term goals.

It draws on our company’s decade of experience in developing and delivering innovative technological solutions and underpins the success and strength we have with our own partners around the world.

The Evolution of outsourcing (pre and pos-Covid)

The global pandemic that hit the world early 2020 has had an effect in every single aspect of our life, disrupting the way we travel, communicate and work. Every industry has been affected differently, but the tech business, especially the tech outsourcing business, has seen some interesting consequences because of Covid.

Since the 1950s, companies around the world have been increasing their usage of outsourced partners for the management of key services, a trend which had only increased as IT grew into an integral part of the success of a modern company. Over the years this use of outsourcing became a key solution to the problems of a lack of talent and agility in their IT, which consequently saw the rise of offshoring as a model to find qualified people while reducing costs.

Before economies locked-down, the tech business was already growing and struggling with challenges related to talent shortage, nevertheless the current health crisis accelerated digital transformation for many companies and made key attraction and retention a relevant focus for the average CIO. This has occurred, even though many companies briefly had to cut investment levels and the market came to a standstill during the first global lock-down in March 2020.

After the initial economic shock it became clear that digital transformation had to be part of the global agenda of any company and business and so, the trend to move from offshoring to nearshoring in the outsourcing industry looks set to grow rapidly. This happens because there is a renewed idea and potential recognized regarding remote work, and there is a surge of newly available talent in the world market close to their former company locations.

Relevance of company culture

Company culture is something that is always referred to as essential for any organization, but when talking about outsourcing it becomes even more important. In these types of businesses, the majority of employees are dispersed widely around clients, cities, countries, cultures and time zones.

This means that these employees are spending all their time in offices that are not their own, talking and engaging with people from different companies and rarely setting foot in their own headquarters. This is a huge challenge for companies, as this makes it harder to connect with employees and instil in them a company culture of which they feel fully part of.

For outsourcing businesses, it is of the utmost importance to cultivate a human-centered, people-first culture. That’s the only way to create true cohesion and a sense of belonging and purpose. One way to achieve this is to have a well planned and well-organized onboarding process with the aim of making people feel welcome and be treated as a critical driver of value to clients.

But even with a warm and heartfelt welcome, people still need time, coaching, training, hard effort and patience to improve and grow within the company. Having a people-first culture needs to be a continual process with a long-term commitment and investment in order to have a long-lasting impact.

Strategy for choosing the best model

Given the wide variations in how an offshore, nearshore or reshore model can work, it’s essential that you align your company’s goals with the chosen route. There are 3 broad categories to look at when deciding on a model.

1 - What sector do you work in and how complex is your product?

Clearly a company operating in a niche industry with a very specific talent need will probably find their possibilities are more restricted. It may be that in order to get the required expertise you’ll be better served working with a nearshored team in San Francisco, whereas people needing talent in more typical areas can go further afield for an offshore partner with no discernable difference in quality.

2 - How do you identify your exact needs, so you can select the best partner?

You should take a look at what your in-house team is capable of and which areas you need to complement. If you have a capable internal project manager and a partial team in place, then you can probably look to outsource the rest of the team from anywhere in the world. On the other hand if you are outsourcing an entire team then it might make sense to look closer to home to enable smooth communication.

3 - Does geography matter?

If you need to have frequent face-to-face meetings, communicate during the same business hours or are happy to let the team run independently then the most appropriate model will look very different. Additionally, depending on the project you’re working on the local regulations, security levels and cultural sensitivities will also have to be taken into account.

In many cases, there will be no perfect fit and instead a hybrid model of a nearshore team with offshore clusters might make the most sense. In this way, you can guarantee a more dynamic and fast moving resource pool. Therefore it is critical to consult an experienced partner who can suggest the best model for your needs.

To ensure that you find the perfect model you should have the answer to these questions:

A - Who should choose the team?

Within your outsource partner’s talent pool will be a wide variety of talent, both ready to work directly for your partner or through a contractual basis. Additionally, there may be a need for additional external and highly-specialized knowledge. Hiring talent is a skill in itself, so while some companies may prefer to outsource this particular function, others might prefer to be more hands-on. It is critical to know the experience and recruitment model the partner uses, as often this is one of the main pain points a outsource partner can solve.

B - Who should manage the team?

The client can retain full management control, or ask the partner to handle this responsibility. Obviously the trade-off is exchanging time and resources for a greater awareness and direction over the project journey, for which the ideal scenario is highly business specific.

C - Where should they be based?

With the right tools and processes, most IT functions can be fulfilled entirely remotely. However for a variety of reasons, such as team building and security, companies may wish for outsource partners to work on site. In many cases a mixed approach can also be adopted.

D - Should this be a joint venture?

In some cases a simple contractual agreement will suffice, in others a client and outsourcer might desire a more comprehensive union. In these cases a joint venture where part of the outsourced resources is spun-off to permanently dedicated to the needs of the client might make more sense.

E - In what situations can an Extended Team as a Service (eTaas) work?

Rather than focusing on a single project, some clients are better served by having an extended team always ready and on-call to help with their needs. This helps clients meet skills gaps without having to add members to their internal team.

In all cases the model chosen should be fully scalable and able to meet the financial and operational needs of the client in both directions according to market demand.

Partner vs supplier

Our ambition is never to just be another supplier. We believe our clients are always best served when we create a long-term and trusting relationship that positions us as their full and respected partners.

Whereas a supplier can be counted on to do a single project to the minimum requirements set out, we as partners are able to exceed in delivering extra value to our clients.

More creativity, innovation and problem solving

By fully immersing and aligning ourselves to the goals of our clients and understanding exactly who they are and what they do, we are able to provide a ground-up assessment of what extra innovations and new ideas we can add above and beyond the basic requirements.

Full support in operational and strategic affairs

A continuous relationship and deep knowledge of our client’s positioning means we can meet, pivot to and support any new operational or strategic challenges as they occur with zero lag.

In the challenging “new normal” we find ourselves, this commitment to partnership with clients is even more crucial because a well-constructed relationship leads to a better understanding of each other’s circumstances and possible impacts. It’s about creating a relationship with our clients where both companies come closer to one another with the objective of helping each other grow. This mindset is implemented in our internal market as well as it is in our international market. We aim to grow internally and internationally, and we want to do so by helping our clients in their growth and technological transformation process.

Choosing the right partner

Nowadays all IT companies have different partners to help them better develop, bring to market, sell and support their products. Having strategic partners was once revolutionary, but now it is a normal part of a company’s growth strategy, which means that the competition to become a company’s partner is fierce.

Choosing the right partner is essential to assure that a company can boost their business goals, whether it is from a sales perspective or from a quality assurance one, for example. In the end this will always lead to more money and time spent for the organisation.

When searching for a partner, it’s important to consider the following factors:

Do they have the right experience in your business sector?

IT is a very broad spectrum that contains a whole host of niches. Potential partners should showcase through references and success stories the relevant experience they have either in your industry or working with similar challenges.

Do they care about your success?

Some outsourcers will be overly project-focused and operate only to achieve the pre-requisite KPIs and benchmarks defined. A true partner will be invested in your success knowing that it underpins a long term relationship.

Can they find ways to create value with you?

Remote freelancers outsources, without the right supervision and management, can sometimes be disconnected from the overall vision of your company. A partner will aim to understand, align and immerse themselves with your product and company so that they can find ways to add value on top of your original needs.

Is there a significant language barrier?

Having a full understanding of a project and being able to keep a client updated while responding in an agile manner demands complete command of the client’s language. If you feel unsure you’re being understood, then your partnership will not last long.

Does their culture, vision, mission and values align with yours?

A common company ethos can help with matters related to product development and sales, but more importantly it makes it easy for workers to quickly get on board with the project and work in tandem with your in-house talent.

Is there long term pedigree?

In an increasingly turbulent world economy, it’s important to consider whether your potential partner has the pedigree to keep working with you in a couple of years or whether they have the capacity to evolve and re-make themselves as a brand new entity able to help the new needs of the client.

Do they focus on price at the expense of quality?

Outsourcing is a competitive business but before discussing price the client has to know exactly service they want, because at the end of the day for each service they expect a minimum quality which can vary from case to case Factors such as team experience, technology stack, and project complexity all will impact pricing and its’ important to align these expectations before deciding about pricing.\

Are their management teams open and accessible to you?

Working with remote teams is only possible with transparency and communication. This means at the early stages of deciding on a partner you should evaluate how easy it has been to get in contact and discuss matters with the senior members of the outsourcer.

Can they adapt to your culture and processes?

All outsourcers need to work with multiple companies, in multiple companies according to multiple processes, but not all outsourcers can juggle these variables well. Consider well if your project needs special considerations that your outsourcer might not be able to meet.

When working with a partner, in order to achieve better results both sides need to help each other to build processes, methodologies and a solid and trustworthy relationship. It is inevitable that setbacks will occur, but with shared values to support them the solutions will come easier.

Finally, when working with a partner, you need to consider some potential risks:

Companies can claim to be reliable but are ultimately unconcerned with a project’s failure of success. Always make sure to check their portfolio, case studies and references.

When establishing a partnership there will be some access granted to sensitive, valuable or private information. Always make sure that any potential partner has a comprehensive cyber-security policy and doesn’t conflict with your own.

What makes outsourcing successful

When a client and an outsourced partner enter into a relationship both sides will want to see success. As with any business relationship, there are some steps you can take to ensure an optimal outcome.

Selecting the right vendor

First and foremost you need to be sure you have selected the right partner. You should be looking for people with demonstrable success of being fully engaged in projects and who have the requisite experience, capacity and capability in your sector. This means asking questions, checking references and getting feedback from their other clients.

Do they care about your success?

Some outsourcers will be overly project-focused and operate only to achieve the pre-requisite KPIs and benchmarks defined. A true partner will be invested in your success knowing that it underpins a long term relationship.

Share your company goals and values

Make sure your partner fully understands who you are, what your company stands for and what you want to achieve. Ensuring they can completely align with your company culture means they will be able to add extra value and that the remote workers will be able to do their job more effectively.

Create a strategic vision and plan

At the start of the relationship you should share a clear idea of being of the scope and schedule of the work involved, so that you can be confident the partner can meet it for the project and deliver on any wider objectives you may have. Outsource partners need accurate and full information of all requirements and the deliverables expected in order to hit the ground running.

Keep continued communication

Working with multiple outsource partners and teams across multiple time zones can make it hard to stay coordinated and keep a clear view of the big picture. In addition to scheduling frequent meetings, you should ensure there are comprehensive documents for the outsource team to follow and robust tools for tracking progress.

Draw a properly structured contract

In addition to the scope of the project, in some cases the project may require a clear and written work plan with defined milestones. Putting checkpoints into the contract to review these milestones can mean you ensure the quality of delivery remains high as you head towards a deadline and can link payments to these achievements.

Make sure to specify a warranty or support clause ahead of time to secure support when the project has finished.

Engage in an ongoing relationship

Try to involve your outsource team in your decision-making processes to encourage greater feedback and collaboration towards your goal. This in turn builds a stronger and deeper long-term relationship which increases your trust and confidence in your external provider.

Secure senior buy-in and involvement

On both the client side and outsourcing partner side, it’s essential to have the full support and involvement of all senior executives. Try to foster communication at a high level and if necessary start with a small project before committing to deeper involvement.

Careful attention to personnel issues

Your outsourced talent does not directly work for you, but they are still critical for your success. You should aim to work with an outsourcing partner who has a robust physical and mental wellbeing plan and you should try to schedule one-on-one meetings with the talent to instil greater enthusiasm.

Build a clear business case

Working with an outsourcing partner should make financial sense in terms of ROI or costs. Yet a successful relationship will not be dependent on the lowest price, but on a supplier who can balance a high quality product with reasonable costs.
By embracing these principles you can have greater confidence in making your outsourcing journey a success while minimizing risks.

Why is Portugal attracting so many companies?

One of the most popular destinations for companies to grow and establish their business is Portugal.

The main reasons for this are:

1 - High quality-price ratio for software development teams

Portugal has an incredibly high quality of engineers based in the country, which makes it one of the first places people look to set up their nearshoring team. Most countries make the same claim, but Portugal can point to a large number of certified and internationally recognized engineering universities to support this point.

Another strong point is the number (and the quality) of English-speaking people, which will make communicating with our customer’s teams much easier and fluid. Communication is one of the most important keys to success for a distributed team to be successful.

Additionally, Portugal’s low cost of living means that they enjoy competitive rate values, which creates an unbeatable quality-price ratio.

2 - Great locations for nearshore teams

It’s important to have a partner with a location that allows for easy trips between both partner’s offices. having teams sitting together from time to time and an office with a privileged location is key to make these trips fast and enjoyable. Having a team sitting face-to-face on a regular basis will allow people to create bounds and better understand their cultures and differences.

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3 - Flexible timezone

There are already many challenges when setting up a team in a different location, so it makes sense to have a timezone with the maximum overlap on the working hours from both teams in order to minimize that impact. This is also one of the main differences between nearshore vs offshore outsourcing.

Portugal lies on the GMT meridian and has 1h less compared with CEST time zone - which is the timezone for most central european countries. This is an advantage as you can have both teams working within a large and comfortable window for communication while making sure that neither your local team nor your Nearshore team will be blocked waiting for answers from each other for long periods. You can also take advantage of this extra hour (CEST - 1h) of working on your project, increasing delivery speed or the possibility of having your project running during your country’s bank holidays.

4 - Cultural mindset

The Portuguese are known for being a friendly and quite adaptable type of people. We like to have contact with different people and cultures. It’s a social thing! We really do have strong social and communication skills and are always eager to learn more about others. Also, we have a history of being a safe and stable country and we are known as hard-working and dedicated people.

5 - Weather and Food

I know this might be the least important thing in this top 5, but we do really have an amazing country. With mild weather either in winter and an almost complete lack of rain in the summer, visiting Portugal will always exceed your expectations if you are looking for good beaches or countryside to relax in either the Alentejo plains or hilly Trás-os-Montes. Portuguese people love to eat and that is one of the reasons we have such an amazing variety of traditional dishes - meat and fresh-caught fish - and great pastries in case there is still room for a sweet after a meal or as a snack during the day

Why BOLD?

BOLD by Devoteam is a Portuguese technological company, integrated into the Devoteam Group, one of the largest European groups in the field of technology consulting solutions, present in 18 countries.

There are 5 big reasons why you should choose BOLD as your partner for your nearshore strategy:

Experience in Project Typology

With over 9 years of Nearshore Software Outsourcing experience and more than 100 experts working with the latest technologies we are your ideal business partner. Also at BOLD we count with over 600 employees in the IT area, who have gone through a careful recruitment process, with access to specialized and continuous training.

The experience we have in this type of project allows us to ensure its delivery, meeting your specific requirements and needs.

We begin by identifying the needs and the context of the Client, so we can analyze the necessary profiles. Before moving on to the recruitment process, we develop a specific training plan, as well as an onboarding and integration plan with the Client.

Throughout the project development period, we monitor and manage performance closely, both for the team and the project.

Finally, we create and deliver an innovative technological solution that responds to the Client’s challenges.

The key to all projects is to ensure continuous communication, proximity and collaboration.

Internationalization

To leverage the success of our projects and clients, we have an existing network within our Devoteam Group, enabling the sharing of experiences and technical know-how.

Currently, we have ongoing nearshore projects in over 9 countries worldwide (Germany, UK, Belgium, Switzerland, Netherlands, Denmark, France, Norway, USA) while our group has a strong presence in 18 countries across EMEA.

Integrated View of Stakeholders

We have an integrated view of the stakeholders involved in each project, anticipating
and understanding everyone’s role, positioning and interests.

Upon the start of each project we define a collaboration model with the client where we ensure there is an adaptation phase where our employees can visit directly our clients to learn and adapt to their culture. Throughout the project we define several joint milestones where we ensure not only the right model of collaboration but also, involvement of key-stakeholders to review relevant touchpoints and decide on next-steps.

Technology and Agility

Our technological expertise combined with methodologies and agile work tools allows us to add value and innovation to our clients’ business.

We have high technological know-how and are able to apply the most appropriate Agile project management methodologies.

One of our delivery models is focused on performance teams. This model provides a performant team of specific functional and/or technical skills to which clients have access.

These teams are supported by an agreed set of performance targets and followed by key performance indicators (KPIs).

Partnerships

Partners are key enablers of our growth. We are recognized partners of the main providers which give us the skills and flexibility necessary to meet the needs of our clients.

We select the most innovative technologies of the leading tech partners and invest in them through many initiatives. Also we are focused on attracting young talent to develop their partner expertise and bring our offer to market to another level.