Nearshore Outsourcing: Expectations vs. Reality

Many companies have invested in outsourcing for their IT departments. Outsourcing is a wise decision because you can find skilled professionals who are experts in IT. This allows your business to get more done and trust expert professionals with completing essential tasks. It also saves you a significant amount of time, so you do not have to focus on growing your team. Partnering with an outsourcing company increases productivity and efficiency within your company. It allows you to focus on your business’s essential parts that you care about and excel in. In the world of IT and software development, outsourcing traditionally meant offshoring – relying on a company that’s potentially on the other side of the planet.

Nearshore outsourcing, on the other hand, will provide your business with cost savings, IT access, and the adaptability to scale up, down, or in a completely different direction. Nearshore offers the convenience and expertise provided by a domestic development team but at the same time provides affordability by using developers and experts that are in an adjacent country but within the same time zone and similar conditions. Many companies, however, have reservations and expectations when it comes to nearshore outsourcing. To provide you with a better understanding of what to look for in a prospective partner, here is a helpful guide to the expectations versus the reality of outsourcing for your company.

Skepticism With The Subcontractor

The expectation of hiring a subcontractor is that communication is key, and both parties should share the same goals. The company should include the subcontractor as if they are part of the in-house team. Both you and your hired nearshore team should build a mutually beneficial relationship. In return, they deliver the work on time and on budget. Both you and the subcontractor should equally respect and commit to the success of the project.

However, in reality, companies panic that subcontractors will not be committed to completing the work on time, as they are not intimately invested in the business. They fear that working remotely will disadvantage their overall business model and finding time to meet with a subcontractor remotely can be a headache. Companies fear they will not be able to trust a subcontractor. They believe subcontractors will do sub-par work and charge a large amount of money.

A solution to make sure you choose the right subcontractor is to create a substantial list of IT service companies that offer nearshore and managed service outsourcing. Do your due diligence and find out how long the outsourcing company has been in the industry and its history. Find out:

  • What other companies have they subcontracted for?
  • See how many projects they have completed and their success rate.
  • What challenges have they faced, and how did they overcome them?
  • What do they do differently now?

This is by no means an exhaustive list, but it’s a start. By partnering with an outsourcing company that has been in the technology service for a number of years, with good relationships and reviews, will help mitigate any worries about subcontractors.

Uncertainty About Non-Disclosure & Legal Disputes

When it comes to proprietary products and software, there’s the understanding that the entire project will be completely confidential, and every team member will comply with a nondisclosure agreement; this is the expectation every company has when outsourcing. Establishing a trusted relationship is essential to a productive and mutually beneficial working relationship. All in-house team members, including all outsourcing team members, are expected to follow all contracting rules and agreements. Written and verbal agreements should always be signed, and both parties should follow through with their promises. None of this should come as a surprise.

The expectation here is that everyone should abide by the rules, but in actuality, there is a lack of trust and uncertainty with hiring new outsourced teams. Although both parties will enter into a signed contract, companies fear that new team members will not abide by the rules, because they’re not invested in the company – they’re a hired team and get paid either way. This reservation causes many headaches for businesses. The last thing a company wants to deal with is costly legal disputes, a leak of their IP, or having to chase down an outsourced partner who may still have some proprietary assets.

If you do your homework, however, the reality is quite different. This is a business of reputation and despite companies and managed services/outsourcing providers having global footprints, it’s a small world. People will talk and there’s no future for your outsourcing teams if you’re not deemed trustworthy.

The best solution when hiring an outsourced team is to establish an NDA with the nearshore provider. It’s a good idea to include clear terms and conditions. When working with companies located in other countries, it’s vital to incorporate intellectual property rights, nondisclosure agreements, firm liability, and data protection. Ensure the outsourcing company you choose has entered into NDA contracts before so they are well aware of the legal requirements.

Time Zone Compatibility & Culture Differences

The expectation every company hopes for is that the entire team should communicate frequently and share common goals for the project. Outsourcing should help your business with time-consuming tasks, and repetitive processes and complete them on time, while your core team focuses on core solutions. Cultural differences should always be respected, but the outsourcing company should always follow you first. The outsourcing company must respect your company’s time zone and everyone should be working towards exact due dates and schedules.

In reality, your business is worried about cultural differences and language barriers from outsourcing a team living in another country. For example, words and phrases may not always translate correctly and may not have the same cultural meaning, making it harder to do business. Or, you fear the different time zones can affect the work produced and delivered at the proper time because it may cause projects to be slower. If there’s an emergency, then working with an outsourced company located outside your timezone frightens you because it will be hard to find time to communicate effectively or perhaps reach someone at all. Just because your outsourcing partner says they’re 24/7, doesn’t mean you’re getting the best help at 3 am when an application crashes. Working on opposite schedules tends to cause more headaches for both parties.

In reality, finding the right fit for your company, with account managers, team leaders, and team members that are easily accessible is the best solution when working with an outsourced team. Search for a company that shares the same values and mission as your corporate culture. It’s a good idea to choose a team with a similar time zone, language capabilities, and overall culture so your in-house and outsourced teams can work as a cohesive unit. When working with a partner outside of your office and your home country, communication is key; both parties should always communicate in a clear and timely manner. For example, K2 Partnering Solutions has a global presence with local expertise across five different continents, offering their partners local experts that feel like they’re a part of your in-office team, despite being in an adjacent country.

Lack of Initial Project Preparation/Communication

Related to the previous point, a business analyst or a competent team leader should be added to the team from the onset, to make sure the project runs smoothly. These are the people brought in at the onset to consider if the project is viable, what the deliverables will be, set the key KPIs they’ll be monitoring, what their project management strategy will be, and offer timelines and updates. The objective is to bridge the gap between the outsourced IT team and the business, to guide the team in making decisions and improving their processes and systems.

But then reality kicks in. You may begin to worry that the business analyst or team leader, your key contact, disappears for weeks on end once the project has started, leaving you with no communication and a lack of project updates and how close it is to completion. This will cause the project to move slower and push due dates back. Which in turn will cost your company more money and more time wasted. This, however, is seldom true for the majority of partnerships of this nature.

In truth, an outsourcing provider will find it in their best interest to deliver the best work, with constant updates. Their work with you will further their bottom line as well, with potential future jobs with your organization and with others. The intelligent solution to this concern would be hiring a company with a business analyst/team lead who always is aware of all phases of the project and has a proven track record. Hire someone who will be there throughout every stage of the project. It’s important to outsource to a company that will have its own team that essentially joins your team, and wants to remain essential, efficient, and contributing to your success. Your wins become their wins.

Outsourcing for All Types of Businesses

Outsourcing is not just for large technology companies; small and mid-size companies are now seeing the benefits of investing in outsourcing as well.

Outsourcing for startups is a great way to get them on their feet and start to develop the company. Why waste time and energy when investing in outsourcing that will supply professional and expert help, as well as industry expertise and guidance? The core team can now focus on building the brand and focus strictly on the business processes. Everyone is well aware that a startup can be costly. To put your company in a better position in the industry, outsourcing can save you a lot of money and lower operational costs.

IT outsourcing is also beneficial for SMEs (small-to-midsize enterprise). Your company does not want to waste time training future employees when outsourcing already provides access to expert professionals. By relying on external support, your company will have help with software development, technological support for customers, cybersecurity, and so much more. The most crucial focus you will have as a business owner is growing your business, and outsourcing some of your services will help you focus on the important stuff.

What You Can Expect From K2 Partnering Solutions

K2 Partnering Solutions is a leading provider in enterprise software expertise in the managed services and nearshore outsourcing space. With over 20 years of expert solutions to help innovate and grow your business, K2 has a trusted relationship with many global brands.. Employing specialist technical and functional enterprise applications consultants with a wide range of skills, we have global access to many resources but offer teams with local expertise, offering first-class support to clients. Our unparalleled expertise in the enterprise application and development space can save you time you’d otherwise spend in building, training, and maintaining an in-house IT support staff. Consider partnering with a managed service provider like K2, to save you time and money.

Contact us today to take advantage of our expert-managed service teams!


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