Why onshore is important
Where offshoring and nearshoring are concerned, having people onshore (in the same country) and on site is extremely important and adds value – teams can collaborate more easily, trouble shoot more efficiently and work on strategic initiatives more effectively when they are working face to face. Technology is a good example. In a transformation programme, you might have change agents – the project managers and business analysts – sitting next to developers, which can be extremely beneficial. But having some of the team operating from another country can bring benefits, such as having access to a highly skilled workforce and being able to leverage the cost differential of a location which has lower operational costs. So a hybrid onshore and nearshore mix can work well, with the onshore team part time at the client site and the nearshore team being part of that blend.
Mendix – blended teams and big cost savings
Take Mendix, a low code platform which caters for more business-oriented developers. One company, one of the biggest commercial education companies in the Netherlands, is working on a complete re-build of its back-end systems using the platform. There are two teams – a project team and a development and operations (devops) team – designing, developing, implementing and maintaining the new micro services-based system, which is a combination of full code and low code. Two years ago, the entire team was based in Holland, but they have now moved to a blended onshore and nearshore model. The project team is 67% onshore and 33% nearshore and the devops team is 40% onshore and 60% nearshore. The savings are significant – nearshore developers are around 35% cheaper than onshore counterparts.
Offshoring and nearshoring have been around for years. And a lot of blue chips got their fingers burned in the noughties when they shipped all their IT operations offshore. They soon realised that it was the technology equivalent of tipping the baby out with the bath water. Having no onshore – and importantly, onsite – capability can be highly detrimental for any technology programme.
Having witnessed these failures, you can understand organisations’ reticence about sending development to another location. And they can be nervous about language differences. The key is to find a partner who can provide an onshore capability staffed by local people combined with a nearshore capability, who is able to manage the interface between both, smoothing over any language barriers. Finding the right partner will help you to embrace the change to a blended model.
Benefits of blending
Companies, like our education client, are quickly realising the benefits from blending tech teams. For a start, you get more ROI on every euro spent on IT, because the cost differential of nearshoring makes a real difference. You can also scale fast with a strategic partner, either locally, or at the nearshore location. Imagine the scenario – your CEO has prioritised the delivery of a new product to market – your technology team now needs to scale, at pace, to meet this deadline, in addition to carrying on business as usual (BAU). Nearshoring to somewhere like Croatia, where engineering and technical sciences are the second most popular degrees providing a pool of eager, well-qualified engineers, can help you flex fast. And you can be strategic about the work managed onsite and the work managed offshore. In the above scenario, you could push BAU to Croatia and keep the innovative discovery work onsite.
In this post COVID era, companies are extremely well set up for blending onsite and nearshore technology service provision, maybe without even realising it. And with the advantages from keeping high value, strategic work close to home and sending more mature application development to a nearshore location – realising benefits such as cost reduction, swift ROI, scalability and accessing a pool of highly educated software developers – blending teams is a no brainer. Perhaps it’s time you thought about a blended delivery model?
Have you ever thought about nearshoring?
Valcon is able to help you, whatever delivery model you have. If you have your own capability, we can help you extend it to our nearshore location. We can also be your strategic partner for your onshore and nearshore delivery model. If you are interested in hearing about blended teams, get in touch with Paul Ten Haaf on [email protected]