How to Choose a Nearshore Software Partner

Nearshore Outsourcing

How to Choose a Nearshore Software Partner

A 10-Point Checklist for Choosing Nearshore Services

Nearshore services have significant advantages over onshore and offshore outsourcing. But how do you choose which company to work with when there are many nearshore development companies competing for your attention? Our checklist will help you break down the process so you can make the decision that’s best for your company and build a successful nearshore partnership.

  1. Before starting your search, establish your specific needs and priorities.

If what you are looking for is clear from the get-goto you and the companies you contactyou’ll have more success finding what you need within a reasonable timeline. Determine your vision and long-term goals.

  • Are you looking for a company to perform a single transaction or to develop a long-term partnership?
  • Do you want to work with a co-located team, or are you open to a distributed model in which team members collaborate remotely?

You’ll also want to determine the engagement model that suits your project. For example, your goals may be best achieved with staff augmentation, which is an especially good option if you already have experience with distributed development. However, if you’d like the assistance of management roles you may prefer to hire a full scrum team.

Decide if you consider price or quality a higher priority. Specify what kind of technical skills and industry experience you need the development team to have. Laying this all out as clearly and specifically as possible will help you find a nearshore company that can meet your exact needs and help you reach your goals.

  1. Consider distance and time zones.

While at a significant advantage to offshore companies in regards to time difference, there are still six time zones across Latin Americathree across Mexico and Central America, and three across South America. This may be an important factor to think about if you want to maximize overlapping work hours. For example, Bogotá, Colombia is in the same time zone as New York City, whereas Santiago, Chile is one hour ahead and Montevideo, Uruguay is two hours ahead of EST.

If you plan on visiting the nearshore service provider throughout the project, travel time and flight expenses are also important considerations. A flight from Miami, Florida to Medellín, Colombia is about USD 300 round trip, and the flight duration is three and a half hours. Flying from Miami to Montevideo, Uruguay takes about nine and a half hours, with round-trip tickets at roughly USD 700.

  1. Assess the level of experience with foreign clients, especially clients in your industry.

Find out how long this development company has been around. Check out their website and LinkedIn profile for company history and successful case studies, and be on the lookout for previous clients in your industry. Ask them if they have had other clients with needs and goals similar to yours, and evaluate whether they understand your industry. Can they describe their ideal customer profile? Asking this question may help you determine, among other important factors, whether they typically work with companies that are bigger, smaller, or about the same size as yours.

Test their expertise by asking them to identify the risks and challenges of a software-outsourcing relationship and to explain how they manage these risks and challenges. You may also want to find out if they have errors and omissions insurance, how they handle intellectual property, and whether they’ve worked with non-disclosure agreements.

One of the best indicators that clients are happy with their nearshore partner’s performance is whether the client refers them to their peers. It’s a good sign if a significant percentage of a nearshore company’s current clients were acquired from referrals. Ask a company you’re interested in whether they can share that percentage rate with you. Be sure to also request contact information so you can talk to a former client. This is someone who can answer all your questions about their experience working with this nearshore company.

  1. Evaluate the technical expertise of the team’s engineers, developers, and designers.

Review the company’s hiring processesare they as demanding as yours? What do they look for in hirable candidates? Inquire about the level of education of the members of the team you would be working with. Does the company frequently provide educational opportunities so their developers can continue learning and stay up to date with the latest systems and technologies? How committed is this company to research and training? If your project requires specific kinds of skills or expertise, now is the time to mention that. If possible, ask to see samples of work from completed projects. This is critical if your project involves many visual components and you want to see the skill of the UX/UI designers.

  1. Consider whether their approach to development is compatible with yours.

It’s essential that the nearshore company you partner with has a company culture that fits well with yours. If you work with Agile methodologies on a daily basis, make sure they do, too. It’s a good idea to ask how employees get trained in Agile. Also, ask whether anyone on the team has an official certification in Agile from a respected organization like the Scrum Alliance, Scrum.org, or the Project Management Institute (PMI). Above all, be sure that the team prioritizes collaboration, cooperation, and constant communication.

Another important factor to evaluate is their automation strategy:

  • How do they ensure that QA engineers are testing early and often?
  • Is automated testing part of the development of new features?
  • How fast are their automated tests, and are the results consistent and reliable?

An excellent way to get a clear picture of a nearshore company’s approach to development is to hear it directly from the experts. Interview the tech leads and have them walk you through the architecture of a completed app. This way, you can see how they handled the different priorities of the project.

  1. Make sure communication is effective and consistent.

Ask them how they manage communication with clients. It’s a good sign if they mention tools like Slack, Trello, Jira, and Github. Do they have adequate hardware and bandwidth for quality video conferences?

The team members, especially senior members, should be proficient in English. Don’t expect the same understanding of conversational nuances as a native speaker. However, do expect that all team members understand what the project entails and can discuss its components in detail and without difficulty. There should be absolutely minimal misunderstandings due to language. If any of the team members have already traveled to the U.S. for professional purposes, this is a good indication that there won’t be any significant language-based communication issues.

  1. Check that technologies and security measures are up to date.

Does their IT use the latest hardware and software? Do they have fast internet connection with carefully-placed redundant links to guarantee uptime? You also want to be sure that they will apply the appropriate digital security practices to protect your intellectual property. Find out if they use firewall, VPN, and/or encryption technology. On-site security measures such as video surveillance and controlled access to the office are also essential.

  1. Calculate costs.

Different companies may use different payment models. Time and materials contracts tend to be common because they allow flexibility. However, you’ll still want to find out if they charge monthly or hourly. If they use a monthly model, does it include vacation days, and if so, how many? If they charge hourly rates, do they include overtime pay? Find out if there will be adjustments for inflation.

While some companies will offer a fixed bid, this is not the wisest option due to the possibility of changes during the development process. A better option is to set a budget cap and keep the scope of the project flexible. We recommend running a separate discovery phase to minimize risks.

You’ll want to include the cost of travel to the remote office in your estimate as well (see points 2 and 10).

  1. Research the region and culture.

Be mindful that Latin America is very culturally and racially diverse, with traditions stemming from indigenous, European, and African cultures. Customs, cuisine, politics, and lifestyle vary greatly from country to country, so it’s crucial that you do your homework.

First of all, you want to be sure there are no major geopolitical factors that could affect the stability of the country. What is the state of the economy and inflation? Is the tech industry a priority for the local government?

Equally important, read up on the local culture and learn some of the language. This will go a long way in forging a strong professional relationship. Cultural literacy will come especially handy if you visit in-person (see point 10).

  1. Visit in person before signing a contract.

While an in-person visit may not always be possible, it’s a great way to ensure an authentically positive relationship with the nearshore team. If you’re deciding between competitors, an in-person visit will often help tip the scale in favor of the company that’s better suited to your needs. Spending a day or two at the nearshore office allows you to check the physical infrastructure, learn about what motivates the team, and experience the company culture first-hand. 

Ready for choosing the best nearshore services for your team?

While there are many options for nearshore services, don’t get overwhelmed by the choices. We’re confident this checklist can help you find the right fit for your company. Be open about your needs, goals, and expectations, and you will find the nearshore outsourcing partner that can fulfill your vision.

Ana Jorcin

Ana Jorcin

Ana is part of UruIT’s marketing and business development team. The team's’ goal is to make sure UruITers continue working on challenging innovative projects and helping industry leaders build great products. Her focus is to generate business opportunities by applying digital strategies and techniques for the company to meet its growth plans.

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