When implemented correctly, software development outsourcing can result in significant ROI growth for a business. Recent discoveries state that enterprises are expected to spend around $133.3 billion on outsourcing software development by 2025.
This provides multiple benefits to companies investing in it, and an in-house team working together in an office is no longer critical for modern-day businesses. According to Statista, around 70% of the tech sector workforce works remotely as of 2023.
More and more companies are choosing to hire tech talent worldwide, becoming more agile while delivering estimated results and cutting costs on particular projects. Even though agile nearshore development outsourcing isn't new for enterprises, it's still gained massive momentum recently and has become an attractive option for businesses to access a broader talent pool.
In this article, you will learn about Agile nearshore development advantages and discover how to implement this approach for your business.
What Agile Nearshore Development Is and Why It's Important For Your Businesses
Whether you're a skilled IT entrepreneur or a beginner, outsourcing can be a smart way to delegate your operations and cut off costs. Outsourcing can be broadly divided into offshore, nearshore, and onshore.
Put simply, nearshore Agile software development is an approach that combines nearshore outsourcing with Agile practices. The former involves hiring a development team from a neighboring country or region. The latter is a flexible and iterative approach that emphasizes collaboration, customer satisfaction, and adaptability. In this article, S-PRO experts will explain how your business may benefit from putting them together.
Nearshore Agile Software Development Teams: Key Roles and Structure
The structure of an Agile nearshore development team will depend on costs, available resources, and the project's type, meaning there's no one right way of shaping it. Different teams utilize different frameworks, each with its own advantages and disadvantages.
Here are some key structure examples of nearshore Agile teams:
Generalist
This is the structure in which each team member has a general understanding of a wide range of topics without focusing too deeply on any of them. Because of the versatility such a team possesses, people within it can work on diverse tasks and easily switch with their colleagues.
Specialist
In such a team, everyone has a different area of responsibility. Such employees are highly valuable as they usually offer deeper insights into complex areas, leading to better-quality products. This is a more common structure for larger Agile teams with enough people to cover every specific knowledge area: programmers, database administrators, product developers, etc.
Hybrid
A hybrid team structure combines both generalists and specialists. Within such a team, each specialist focuses on developing their own project component, while generalists bring them together to make sure the project makes sense as a whole. Hybrid Agile teams benefit from gaining extensive knowledge from both generalist and specialist approaches. Some of the advantages of a hybrid structure include improved teamwork, high-quality deliverables, and a greater sense of ownership.
Parallel
Here, the team members switch tasks with each new iteration. That said, if everyone works on software development in sprint A, they'll all move to software testing in sprint B. This approach requires vast training and experienced professionals who can seamlessly adapt to new roles.
Sub-team
This is practically an individual team within a larger one. There, people work on a particular area combined with others to form a finalized deliverable. Outsourcing companies use the sub-team structure to break large projects down into digestible elements, thus enhancing visibility and accountability.
Key Roles and Responsibilities
An Agile approach clearly outlines each team member's role. The main focus here is a person’s skill set rather than the job title, so a well-defined set of roles brings clarity into Agile workflows.
Here are some of the major roles in an Agile team:
Team lead
A team lead coordinates the team and ensures the processes run smoothly. They arrange requests, manage tasks, keep track of project workflows, and host team meetings.
Product owner
Product owners express the client's needs and are responsible for outlining the customer requirements and making sure they're met during the Agile project life cycle. Product owners regularly communicate with the team, offer guidance on features, and point out the needs the team has to prioritize.
Team member
A team member represents a multitude of roles. For example, an Agile development team will consist of software developers, programmers, UX designers, and QA testers. In an Agile team structure, all of these people can be referred to as team members.
Stakeholder
Stakeholders aren't directly involved in project activities, yet they're essential for determining final deliverables. They regularly communicate with the rest of the team to offer improvements to the development process, and their feedback could significantly influence the project's end result. End-users, investors, and senior company executives can all be stakeholders in this case.
Agile Nearshore Development Costs: Why More Companies Are Choosing This Approach
Experts typically associate Agile nearshore development with reducing and optimizing software development costs. This, in return, lets businesses source experienced team members from more affordable locations. It's now possible to combine the advantage of lower developer rates with the increased efficiency of the Agile approach, thus significantly reducing the IT budget.
To show you how cost-efficient outsourcing to nearshore Agile teams can be, let's compare the rates for an average onshore software development team from Germany to the nearshore one from Ukraine:
| Junior developer, average hourly rate | Middle developer, average hourly rate | Senior developer, average hourly rate | |
| Germany | $15.3-$28.2 | $19.9-$35.8 | $29.2-$46.6 |
| Ukraine | $3.8-$7.4 | $8.5-$14.4 | $18.4-$29.2 |
The Advantages Of Nearshore Agile Software Development
Let us explore what benefits come with this approach compared to other types of outsourcing. They are:
Cost Savings
Nearshore outsourcing allows businesses to hire skilled development teams at lower rates than you have in your country.
Sometimes nearshore can even be more cost-effective than offshore. How is it possible? When you are comparing nearshoring and offshoring rates, take hidden costs into account. They could be business trip expenses or language courses for onsite employees collaborating with an offshore team. Agile nearshore development allows saving on these while still getting quality service.
Access To A Wider Talent Pool
Do you find yourself in a situation where you want to drive innovation in your company but struggle to find specialists with the necessary expertise in your professional network? Time to explore a broader talent pool and look for them in neighboring countries.
Hiring nearshore will maximize your chances of fulfilling vacancies within your budget.
Faster Time-To-Market
Nearshore outsourcing perks work best with Agile methodologies. Agile nearshore development allows businesses to release products faster than traditional development approaches. The Agile methodology enables continuous integration and delivery, ensuring that the product is delivered to the market faster.
Improved Collaboration And Communication
Compared to offshore outsourcing, nearshore outsourcing lets you benefit from geographical proximity between business units.
Teams in the same or similar time zones can easily schedule meetings and communicate in real time without struggling to find the best slots. As a result, nearshore outsourcing provides better communication and collaboration, leading to more efficient project management.
Flexibility And Adaptability
Nearshore teams often work in a business environment similar to that of their clients and know the market dynamics. It leads to a better understanding of business needs and processes. That is why nearshore teams show better anticipation and response to changes.
With the help of nearshore outsourcing, businesses get the flexibility and adaptability they need to succeed in today's rapidly changing market.
Implementation and Management of Agile Nearshore Software Development
When approaching Agile nearshore development, consider these steps as a guide for successful implementation and management:
1. Choose The Vendor
Choose the right nearshore outsourcing vendor with the required experience within your budget.
Wherever your business is, S-PRO can help. In particular, we offer mobile development outsourcing services both in nearshore and offshore formats. We have clients worldwide and know how to make them happy with our work.
2. Preparation Phase
Clearly define your project requirements, timeline, and budget. Prepare documentation, templates, and all that your team needs before starting.
3. Set Up Communication
Set up a virtual meeting with your nearshore team to see each other face-to-face. Get to know each other and establish boundaries. Set up communication channels and tools and choose formats.
4. Quality Monitoring
Set up regular meetings and check-ins to monitor progress and address any issues promptly. Establish 1:1 with team leadership and development leads if needed.
5. Adjust Your Processes
Be open-minded and audit your processes regularly. Feel free to change them to make them fit your environment better.
Risks in Agile Nearshore Development
Agile nearshore development may provide numerous benefits, but it's not without risks. They are:
- Communication barriers: Working with a team that speaks a different language can lead to miscommunication that can impact the project's success.
- Data security: Working with a remote team may present additional security risks, especially when sharing sensitive information or data.
- Legal and regulatory differences: Different legal and regulatory requirements can create challenges regarding data protection, intellectual property rights, employment contracts, and other legal matters.
Summary: Nearshore Development – What To Expect?
In this article, S-PRO experts described the advantages of implementing Agile nearshore development for businesses. Сost savings, geographical and cultural proximity, and extended talent pool are among the benefits of such an approach. We also provided a short guide for adopting nearshore development in your organization.
At S-PRO, we understand how important it is to partner with a reliable vendor. With our nearshore development approach, we offer a cost-effective and flexible solution that allows for seamless communication and collaboration throughout the entire development process.
Contact us, and let's build your digital product together!