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In-house Vs Nearshore Software Development Team: What's the Best Option for Your Enterprise?

In-house Vs Nearshore Software Development Team

Are you considering in-house versus nearshore development, but are not sure about the core differences between those two development practices?

We will help you understand the difference between these two models and which one will fit your enterprise’s needs best.

For starters, in-house development simply means that the software development work takes place within your company, with use of your own employees and IT resources.

Alternatively, nearshore development refers to collaborating with an outsourcing partner which is based in a neighboring Country.

Dedicated software development team: in-house or nearshore?

Dedicated software development team

1. A question of budget

Retaining and affording an in-house development team may be appealing idea at first, but it can turn out to be quite expensive over time.

Why? Simple, because of:

  • Long-term, running salary costs for employees even when you may not need them 100%;
  • The numerous IT resources and tools you’d need to produce an efficient software, as licenses, hardware, and equipment;
  • The costs related to employee recruiting, insurance fees, additional training, pay wages, office spaces, and holidays.

So, if you cannot deal with all those expenses, that’s exactly where nearshoring comes to your help! In terms of costs, in fact, the main benefits of working with a nearshore company are as follows:

  • Saving up 50% on software development;
  • Reducing the wage pressure in making direct hires;
  • Have all the needed IT tools at your disposal with fixed prices;
  • The ability to staff the technologies you need, as you need them from PHP and Java to Drupal, Wordpress or Mobile.

2. Facing the lack of experienced developers

If you plan to work on a big and fast-growing project, you’ll need a wide number of specialized developers. To do this process in-house, consider that:

  • At first, you’ll have to look for several specialists, preferably senior ones with real experience
  • The hiring process in the IT sector is expensive and time-consuming, especially when you need several development skills;
  • High turn-over: one of the main hidden risks is staff exits: after investing significant resources building your team, they may go away, as software developers tend to change the working place quite often (being the demand for such talents quite high). This would mean that your project always risks being stopped or slowed down for months.

On the other side, nearshore can provide you with a dedicated software development team that already runs smoothly and has worked on multiple projects together. This brings to two important benefits:

  • Strong communication between the team members;
  • Extensive working experience with proven results;
  • Continuity, a consistent team working on your project leads to better software development and no code-bloat!

Even if the increasing growth of the IT industry makes it difficult to find and retain the multiple specialists needed in the sector, countries like Ukraine, Poland, and Bulgaria (in the European market) or Mexico and Latin America (for the U.S. one) are rich of highly experienced professionals who can easily help your company gain a higher ROI!

3. Building a dynamic communication relationship

Communication is essential for any software development project.

  • Make your near-shore team as much of a direct extension as possible. Now, when many companies are working remotely and many more have adopted distributed teams, this is easier than ever.
  • Many companies give their nearshore developers company email addresses and add them to their websites as full team members. This helps with the external appearance and the internal cultural integration.
  • Consider daily or weekly company meetings involving your in-house and remote teams.
  • Build your own company culture, if you wish to outline a strict workflow and develop corporate ethics.

Nearshoring, as we’ve already seen in our previous article, means a dedicated software development team can offer you a dynamic and flexible communication relationship, a value that’s becoming more and more meaningful in the current work-from-home environment.

So, the assumption that in-house would be a more communicative working model than nearshoring, is now outdated by practical realities: in 2020, when every company is dealing with remote work adaptability, having a partner who’s used to successfully working remotely is the biggest advantage ever!

4. Dealing with multiple areas of expertise

As we mentioned, to develop a proper software or IT project, you’d need a variety of different skills: this will mean, in terms of in-house teams, hiring several candidates at once.

Therefore, if you’d like to build an in-house team, just remember that:

  • You’ll need to hire a specific candidate for each specific skill, for example, Front-End, Back-End, Mobile, Dev Ops.
  • You may risk a lack of versatility: your employees, in fact, might ace one or some programming tools, but can have a poor knowledge of others, forcing you to hire more and more professionals and making the costs rapidly increase.

Opting for a nearshore partner, instead, would allow you to easily scale your team and have several certified professionals at once, without any added hiring cost!

Delivering projects

5. Delivering projects “On-Time”.

Another crucial aspect you should take into consideration is the necessity to build and deliver a time-to-market project, providing your customers with the best IT solution and user experience as soon as possible.

Time to market favors nearshoring over in-house development simply due to the time required to build a full team and complete all the hiring process.

The truth is that any newly hired employee usually requires at least five months to become a productive team member and integrate into a project.

In addition, each software application requires months to be developed: time that can be used by your competitors who already take advantage of nearshoring to get to market faster.

In-house Vs Nearshore: so, what’s the best solution?

In-house Vs Nearshore: so, what’s the best solution?

Finally, how to decide between in-house vs nearshore team development?

The main truth when it comes to choosing the right development model is that, if web or software development is not the core capability of your company, it may be an overwhelming challenge to hire and retain an IT staff from scratch, and then – only after unsuccessful attempts and a great waste of resources – you may end up with hiring a nearshore team anyway.

So, before you choose a developers’ team or a software development company, you should determine all your main priorities:

  • Would you like to keep the full control of your projects?
  • Do you want to have a time-to-market and outstanding product that meets all your customers’ expectations?
  • Is your budget quite high or rather small?

Nevertheless, just bear in mind that, as 2020 brings new challenges to our business world, your enterprise shouldn’t lose the opportunity to benefit from the skills, talent, and experience available in the software outsourcing industry, in order to accelerate your digitalization and technology assets!

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Would you like to discover more about nearshore software development? If so, keep following ICON’s blog and consider talking to one of our nearshore experts!


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