8 Biggest Mistakes in Nearshore Outsourcing and How to Avoid Them

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Nearshore outsourcing of your organization’s software requirements is a cost-effective way to manage your business. For years now, companies across the globe have been outsourcing their IT and software jobs to other places for sustainability. However, companies often make certain mistakes during this process that ultimately hinders their productivity and impacts the bottom line.

If you are looking to take advantage of the outsourcing model (be it nearshore or offshore) for your business needs, then knowing what to avoid will not only save you time but also money. That is why we have compiled this list of 8 biggest mistakes in nearshore outsourcing and how you can refrain from making them.

Read on to learn more!

Common Nearshore Outsourcing Mistakes

Leaders often experience certain challenges with nearshore outsourcing software development talents. These mainly arise from factors like cultural and professional differences, timezone mismatches, lack of enough face-to-face communication, etc. Needless to say, these can result in costly mistakes that are otherwise entirely avoidable.

The following are 8 such issues and how you can avoid making them.

1. Lack of Thorough Knowledge About the Partners

When you integrate a new team via outsourcing, it is crucial to thoroughly know the people involved. Failure to do so can often lead to miscommunication and a lack of teamwork down the road.

Make sure to take the time out to know your partners before embarking on the project. Know their names, their roles, and specific jobs. You can set up a couple of virtual ice-breaking sessions before the teams start with the actual work.

2. Failure to Create a Strategic Plan

Not having a proper plan of approach and action can lead your entire offshoring project wayward. Hence, before you sign the contract, make sure to have a thorough POA in place.

Involve all the relevant stakeholders and formulate a plan that is both feasible and strategic. This planning stage is crucial in any software development cycle, especially when you have to factor in nearshore outsourcing. Sit with your outsourcing team and iron out all the details before starting to work on them.

3. Not Knowing What Exactly You Want

Businesses usually opt for outsourcing when they either do not have the resources or expertise in a specific area or want to conserve money. However, that doesn’t exempt businesses from having a clear idea of the exact requirements.

Before you approach your outsourcing partner with the details, be sure to understand what needs to be done and what outcomes are expected. Having basic knowledge about deliverables is crucial for the overall success of the endeavor.

4. Absence of a Robust Communication Channel

When working with outsourced teams, the usual modes of communication are virtual – emails, video conferencing, and calls. The absence of face-to-face interaction can pose problems, especially if the communication strategies aren’t consistent. Hence, it is important to establish a robust two-way communication channel for effectiveness.

Arrange for regular stand-up meetings, refrain from over-communicating through emails, and have a specific communication framework in place, if necessary.

5. Not Cutting a Thorough Deal

Outsourcing is, after all, a business deal. Hence, it is imperative to draw up a thorough contract that covers all the possible bases to avoid any future issues.

To address this, you should consider the following points carefully before signing the contract-

  • Have a detailed business case, enlisting all the requirements and resource allocations.
  • Include a scalability roadmap to ensure that the outsourcing team can handle it if operations ramp up.
  • Ensure you have a change management plan in place to handle the transition once the project is completed.
  • Sometimes, it can become necessary to get out of a deal due to unforeseen circumstances. Be sure to address such terms and conditions to avoid any confusion.

6. Failure to Set Clear Expectations

For the software development project to be fruitful, it is extremely important to set the expectations clearly from the beginning. Failure to do so will result in confusion that can lead to both monetary and man-hours losses.

Make sure that both your organization and the nearshore outsourcing software development team are on the same page regarding the project and its outcomes. Additionally, you must also understand and agree with the outsourcing team’s methodology and approaches. Working in tandem can help in setting clear expectations.

7. Extreme or Unrealistic Deadline Setting

This one is a very common issue faced in the world of outsourcing. Meeting deadlines is pivotal to the software development project success. As such, if these deadlines are too tight or unrealistic, the whole project runs the risk of being thrown off-schedule.

To avoid this, you have to understand that proper programming and development cannot always be controlled by a fixed schedule. Bugs or unknown challenges often arise that need time and resources to be solved. You have to give your nearshore developers the necessary space within reasonable limits so that they can deliver a quality product to you. Have certain ground rules in place to address these situations beforehand to avoid unnecessary delays later.

8. Not Vetting Nearshore Outsourcing Candidates Thoroughly

Last but not least, businesses often make the costly mistake of not investing enough time to vet their outsourcing candidates thoroughly. As a result, they can find themselves stuck with a less than efficient team that is not able to bring their visions to fruition.

This can be prevented by selecting a highly rated nearshore outsourcing company that has experience in the proposed field of work. Additionally, carrying out proper interviews with the offshore team members before the start of the project is also critical. If your business does not have the inbuilt capabilities to carry out these interventions, then hiring the help of professionals is the best way to manage this.

Avoid These Mistakes While Nearshore Outsourcing

Nearshore outsourcing is a great way to achieve results while conserving money and in-house resources for other core functionalities. It ensures that your business has a sustainable advantage over your competitors. However, for outsourcing to be effective, you must take heed of these common mistakes and take the necessary steps to prevent making them.

At ParallelStaff, we understand businesses’ needs around project management when it comes to software development. That is why we create pertinent solutions that can help you with your needs related to software development, talent acquisition, and retention of developers.

If you are looking to implement nearshore software development in your organization or want to know more about the model, then do not hesitate to contact us for more details.

Mike Hernandez

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