When local pools of tech talent are tapped out, a remote software development center becomes a viable way to source software developers. One of the most significant benefits of this approach is that it comes with the overlapping coverage fostered by the cooperation of two teams operating in different time zones. Located in different regions, your remote and in-house units will clock in 8 hours per day each, which in many cases totals to 16 hours in a 24-hour timeline.
Another notable benefit of this model is its flexibility, especially when it comes to mid-term projects spanning 1-2 years. A remote software development center lets you work with a team for the duration of your project. This eliminates the expenses and efforts associated with HR processes that often arise when disbanding a team upon project completion.
Now, let’s review the steps to build your own remote software development center.
Before you dive into building your own software development center, it’s important to know why you need it. Is this a question of saving costs, an overfished talent pool, or both? Next, think about the importance of working in the same time zone as a team. Then, consider how complex your project is and if it needs highly skilled talent. And most importantly, do you have the capacity to manage your remote software development center? Once you’ve addressed these questions, you’ll have a better idea of which region to choose for your remote center (in terms of the rates, time zone, talent availability, etc), which collaboration model suits you best, or whether sticking to in-house development is the right choice for you.
Before hiring remote software developers, you should define the scope of work for both your internal and remote software development teams. There are basically two approaches to dividing the scope of the project between your units. One approach involves the common work of both teams with full integration of your remote software development team. Alternatively, you can divide the project into components, which each team will deliver independently. The approach you take depends on your project as well as your management style. Regardless of the chosen approach, it’s essential to deconstruct the project into deliverables and set up time frames when you want each part to be delivered. That way, it’ll be easier for you to coordinate the teams, track progress, and measure success.
Another crucial thing is the budget. Software developer rates differ significantly from region to region. A recent Accelerance report shows that launching a remote software development center can lead to significant savings – from 40% to 70% of overall costs. Based on our experience, the rates in LATAM and CEE are 2-4 times lower than those in the US, whereas in Western Europe the difference is 1.5-2 times lower.
So, the outcome of this step should include a defined set of deliverables for both teams, a timeline, and a budget. Based on this input, the provider will take care of sourcing relevant remote software developers that will meet your demands when it comes to skillset, experience, and rates as well as handle the HR processes, equipment setup, and all operational costs.
Team composition varies for different scenarios. It may consist of several software engineers fully integrated into your workflows, working closely with your internal staff. In this setup, you can communicate with each team member. directly Alternatively, you might opt for a comprehensive dedicated team approach, akin to a “turn-key” remote software development center. Such a team would involve essential software development roles, including a UX/UI designer, developers, QA professionals, and a project manager who serves as a singular point of contact. Whichever scenario you choose, our remote software development company will help you build the right team.
The entire concept of a remote team for software development is that it allows you to bring in talent you lack on-site. Thus, after you’ve outlined the scope of work, you need to define who will be a part of your remote software development center. That is a necessary step because it’s impossible to start cooperation with a purveyor of tech talent without knowing the roles they need to source to complete your remote unit. The list of skill sets should be based on the type of product you want to build and your vision of the future product.
READ ALSO: When do you Need Full-Cycle Product Development?
At this step, it’s essential to define whether the team members must operate from a single location. This factor may be critical for hardware and IoT products. In this scenario, the pool of candidates may be more limited. On the other hand, you may opt for a remote distributed team, which lets you access a broader pool of talent without being tethered to a single location.
How does candidate selection for your remote software development center work? After you’ve chosen the provider of a remote software development team, you should establish a clear process for candidate interviewing. We recommend keeping it as concise as possible, including no more than 3 steps. This approach helps prevent frustration among your candidates, especially senior ones, as convoluted interviewing processes may prompt them to go with other options available in the market.
Furthermore, when selecting candidates, not only should your provider sift through the labor market for relevant candidates, but also pre-screen them for a variety of competencies, including English proficiency, culture fit, and tech skills.
If you decide to set up your remote software development center in Eastern Europe, chances are this step won’t be time-consuming, as the pool of tech talent in this region boasts nearly 1.3 M software developers. Another popular software development hub, Latin America, is home to 1 million IT experts. Many developers in these regions have years of experience being part of European and North American companies, which means they have solid communication skills and the needed expertise. To be sure of that, all remote software developers that we pre-select for you undergo our internal HR and tech screening process.
At nCube, our clients are always a part of the interviewing process, as it lets them make the right decision when it comes to choosing who they want to add to their team. With that in mind, our clients interview all candidates before they decide whether or not to hire them for their remote software development center. We are always here to coordinate the process of interviews and answer any questions you may have. If you end up approving a candidate, we officially inform them that they are offered a position as a member of your remote software developer team. Essentially, in our model, there are no down payments before you approve the first member of your remote department, as we want you to be sure this model suits you before you commit to it.
So, you hired remote software developers and are ready to put your remote unit to work. To officially launch your remote software development center, we prepare all the necessary paperwork, including signing a Service Level Agreement, Non-Disclosure Agreement, and contracts with your remote software developers.
We recommend signing B2B contracts with your team members as it lets you negotiate a longer notice period, rather than adhering to the standard 2-week notice.
At this step, we aim to make the integration process as smooth as possible, so you can count on our assistance at any time. To that end, we assign a personal account manager to coordinate matters between you and your remote software development team. They will be available for you to contact 24/7.
The onboarding process holds the key to your remote team’s success. It’s important to integrate your new hires into your processes and include them in your internal meetings. This step is crucial for them to feel a part of your team and be more invested in its success. We at nCube help our clients establish the right communications between their internal and remote units.
What do businesses seek when they partner with a remote software development company? Let’s break it down.
Cost reduction. Trimming unnecessary costs is one of the most expected outcomes of a remote software development center. For many companies, especially startups, building a local team of developers is beyond their means. Studies reveal that in-house hires tend to cost from 40% to 100% on top of their salary. The cost of local hiring is snowballing, as talent acquisition, onboarding, training, employee retention, and administration tend to factor in. Hiring remote software developers is a way to cut back on extra expenses. The vendor typically takes care of team administration, retention, and IT infrastructure.
Shorter time to hire. Launching a remote software development center lets you go outside your “four walls” and add talent from a diverse pool of technologists, for example, Eastern Europe or Latin America that have a total of 2 million ICT specialists combined. Thanks to this, your company can significantly reduce the time required to backfill vacancies.
READ ALSO: Nearshore Product Development: Eastern Europe and Latin America Overview
Simple scaling. If you err on the side of being risk-averse, a remote software development company is the way to go. Scaling your remote unit up and down is easy – you can start with one or two remote software developers to take the approach for a spin and then scale up as you see fit. You can hire more specialists or disband the team if you decide to close your remote software development center. Vendors typically offer flexible engagement models where you only pay for the hours your remote employees invested in your project.
Acceleration of processes. A remote software development center will help you get overlapping coverage where two teams invest 8 hours of work in a 24-hour timeline. That extra effort will speed up your development process and get you to market sooner. That way, hiring remote software developers helps your business operate around the clock by uniting the efforts of team members from different time zones.
In a nutshell, it will be your own team of remote software developers who will work on your project as if they were team members of your internal staff. The team will work with you full-time, 40 hours per week, Monday through Friday. As a client and a leader of your remote software development team, you will have direct access to all team members. Alternatively, you can hire a project manager through us who will run your remote software development center on your behalf.
Our model allows you to have the benefit of managing the processes in your own unique way. Working under your management, your remote software developers will stick to your communication style and adopt your methods of software development. Thus, it can be your own Agile software development remote teams if you’re a proponent of this approach.
The peculiarity (and the biggest benefit) of our model, in our opinion, is that you’ll keep control over everything, from who is going to work on your project(s) to team management and processes. This model allows you to truly embrace Agile software development with remote teams, as you can scale up and down whenever your project needs it. On our side, we at nCube will have your back when it comes to team member retention, providing such services as team building, insurance, HR and tax support, motivation, help setting up IT infrastructure for your remote software developers, and more.
When your team reaches a certain size, we offer to create an R&D center with a separate office, dedicated HR and operations managers. Thanks to this, our remote software development company boasts an average retention rate of 3.5 years, which means most developers endure throughout the lifetime of the client’s project.
Let’s connect and discuss how we can help you build your remote software development center in 2024.
A dedicated development team is a viable approach to software development that comes in handy in various scenarios. Some companies hire dedicated software developers to beat the competition and ship the product as fast as possible. Others use dedicated software development services to cover their sporadic need for development resources. Finally, a dedicated software development model is a cost-effective alternative to an in-house development approach.
The best testament to the success of this model is that companies are actively investing in it. In fact, the revenue in the IT outsourcing market is projected to reach US $512.50 bn in 2024.
A dedicated development model suggests expanding your unit by adding dedicated software developers located in a region with lower development rates, such as Eastern Europe, Asia, and Latin America. Such a team is called “dedicated” because it’s solely dedicated to the client’s project, working full-time. The client usually has direct access to each dedicated software developer. The vendor of a dedicated engineering team takes care of recruitment, employee retention, office space, IT infrastructure, HR support, and employee perks.
As we’ve mentioned before, a dedicated software development approach lives up to its name. It refers to a model where a virtual team is interwoven into a client’s software project, working from the vendor’s office. A dedicated development team is typically gathered by the vendor from the ground up and tailored to the client’s project. While the vendor takes care of candidate sourcing, establishing the workflow and synchronizing external and internal teams rests on the client. Below we dive deeper into the benefits of this model.
READ ALSO: How to Build an Offshore Software Development Center
READ ALSO: Advantages and Disadvantages of Offshore Software Development Services
Let’s recap this part. When choosing between an in-house and a dedicated team, many companies lean towards the latter, mainly due to the high costs of local developers. A huge stumbling stone with this model can be maintaining communication and team control in a remote setting. The key is in selecting the right tools and setting the right processes. However, it would be better for a manager of a dedicated development team to have relevant experience in managing remote teams.
READ ALSO: How to Manage Your own Dedicated Development Team
“Should I build a dedicated team or a traditional in-house team?” Many tech leaders inevitably come across this question when the need for team scaling arises. Let’s compare the concept of a dedicated development team vs. in-house development across various criteria.
Criteria | Dedicated development team | In-house development team |
Location of the team | The team works in a remote office, often located in offshore/nearshore regions, for example, Latin America, Central and Eastern Europe, etc | The team works in your local office |
Cost | Dedicated development is more cost-effective, mainly due to lower software development rates in offshore/nearshore zones | In-house staffing is more expensive due to expenses associated with permanent staff and overhead |
Team control | The client runs the team remotely | The client has direct, immediate access to the team |
Developer availability | Access to the pool of global tech talent | Confined to the local job market |
Communication | Communication can be impeded by time zone differences and a language barrier | Face-to-face communication |
Culture | Potential challenges associated with cross-cultural cooperation | More possibilities to build a unique company culture |
The roles within a dedicated development team resemble those within an in-house unit, although you may want to backfill some of them with in-house staff. Let’s explore key roles in dedicated development.
PM is an expert who drives the software development process and supports your dedicated development team throughout the project. They will ensure your project stays on track and report to you on its progress.
The role of a BA is to align the software development process with your business goals. Oftentimes, BA serves as a bridge between stakeholders and a dedicated development team. The key task of a BA is to ensure your business needs are translated into tech specifications.
A software architect is the mastermind behind your project. They design the overall structure and guide your dedicated development team on how to build and integrate different components of a software product.
User Interface (UI) and User Experience (UX) experts will craft the design and usability of your software product. Their job is to create a user-friendly, intuitive, and attractive design for users.
A development team, consisting of front-end and back-end experts, is the backbone of every project. These roles are the most costly on your dedicated development team.
QA experts are on guard for your software quality. They thoroughly check if your software meets the standards of usability, security, and performance before it goes live.
DevOps engineers focus on automating and refining processes aiming to enhance the speed, efficiency, and quality at every stage of software development.
Now that we’ve analyzed the key roles, let’s dive into the cost aspect. Below, we compared the rates of various tech roles in North America with rates for the equivalent roles in nearshore/nearshore zones. We believe this information may be useful for you to make an informed decision when selecting the location to build your team. You can see that opting for LATAM or CEE for dedicated software development is more cost-effective than in-house staffing in North America.
Role | Hourly rate, North America | Hourly rate, Latin America | Hourly rate, Central & Eastern Europe |
Project manager | $96–$123 | $59–$82 | $53–$78 |
Business Analyst | $109–$154 | $56–$68 | $57–$81 |
Software Architect | $139–$182 | $72–$96 | $71–$95 |
UX/UI designer | $79–$100 | $48–$75 | $53–$71 |
Senior developer | $143–$172 | $65–$82 | $68–$76 |
Intermediate developer | $119–$144 | $53–$66 | $47–$65 |
Junior developer | $75–$91 | $41–$53 | $35–$53 |
Quality Assurance expert (Automated) | $167–$74 | $35–$72 | $32–$74 |
Quality Assurance expert (Manual) | $139–$62 | $66–$34 | $61–$26 |
DevOps | $148–$114 | $59–$82 | $62–$79 |
When building a dedicated software team, you want to source dedicated software developers with the right skills to bring your project to success. There are two major parties involved in this process: Customer and Provider. The responsibilities are typically divided in the following way:
The provider takes care of: talent acquisition, IT infrastructure, office space, dedicated software developer retention, administration, payroll, paperwork, team building, and employee benefits.
The customer is responsible for: providing Project Scope, team effectiveness measurement, communication, and company culture.
Now that we’ve outlined the responsibilities of each party, the next question would be where to start?
Before contacting the vendor, your team should decide on a tech stack and prioritize features so that a vendor can build a dedicated development team based on your needs. Giving information about your company will help find developers who would be a good fit in terms of company culture.
Typically, the hiring process includes several rounds of interviews. The candidates are initially verified by the vendor’s team, which involves technical and HR interviews. Then, the candidates who’ve made the cut are forwarded to the client for client interviews.
During the hiring process, you may want to take the provider for a spin. Take notice of their company culture, communication style, and ability to meet your requirements. That will allow making an informed decision. With nCube, there’s no need to pay upfront until you are ready to hire a dedicated software developer. We also are open to signing a non-disclosure agreement before we start our cooperation.
If you have chosen the team members carefully, chances are high that your dedicated development team will be a success. At this point, a lot depends on your involvement in the project. Set up the processes and communicate with team members regularly. If you choose nCube, you’ll be working with developers from CEE or LATAM who have high technical proficiency, a problem-solving mindset, and strong communication skills.
These are regions that are the most comfortable for launching your dedicated software development team.
When it comes to the best countries to launch your dedicated development team, many Eastern European countries (Ukraine, Poland, Romania, etc) are globally recognized as hotspots for this activity.
In Eastern Europe, developers have vast experience working on global software development projects and excel at diverse technologies. Particularly, Ukrainian and Polish developers are well-versed in JavaScript, Java, C#, Python, PHP, Swift, and C++ as well as in-demand fields, such as Data Science, IoT, Blockchain, and AI/ML.
When you go for dedicated team development in this region, you can rely on a repository of nearly 1 million expert IT specialists. Dedicated team development in this region is also a lucrative option thanks to a convenient time zone, no-barrier communication, and minimal cultural discrepancies. So, when sourcing dedicated software developers from Eastern Europe, you can optimize your budget without any trade-offs.
READ ALSO: Offshore Product Development: Eastern Europe, Latin America or Asia?
LATAM is currently a growing tech hub, where such countries as Mexico, Argentina, and Brazil stand out as the most popular destination for dedicated development. LATAM is also a preferred region for US-based companies seeking nearshore opportunities.
Akin to Eastern Europe, LATAM offers affordable software development rates compared to North America. LATAM nations are close to the US when it comes to the time zone, so many businesses prefer to launch dedicated software development teams in this region. Besides that, providers in LATAM are laser-focused on North American projects, which allows them to have a deep understanding of their inner workings, requirements, standards, and goals.
We at nCube focus on both of these regions and will help you set up your own dedicated development team in the destination of your choice.
READ ALSO: Why is LATAM Software Development Thriving?
To summarize our post, we’ve gathered a few scenarios where adopting a dedicated development model may be a suitable choice for your business.
At the end of the day, there is no universal recipe for developing software. In some scenarios, it’s best to go with an in-house software development team. In others, a dedicated team can be a good solution, especially when you want to scale your internal team fast and prune the extra costs associated with an in-house team. Together with a dedicated development team from nCube, you can build long-term relations with the best tech talent in Eastern Europe and LATAM. Let’s connect.
If you need to back up your already-existing tech unit or create a remote team from scratch, nearshoring to Poland sounds like a solid plan. As a software development company with a network of 100,000 software engineers located across Central & Eastern Europe, our team is expertly skilled in the local talent market. In this post, we’ll focus on how software nearshoring to Poland can positively impact your software development efforts, focusing on its distinct features in the context of other tech hubs in the CEE region. Let’s begin with a short definition.
Nearshoring is the practice of contracting out work to be performed in a nearby country. Although the term is similar to outsourcing, its meaning implies particular geographical proximity to the chosen country, while outsourcing is an umbrella term for all business activities performed abroad. Nearshoring is also different from offshoring as it covers transferring operations to a neighboring country rather than one that is further away. Now, let’s focus on software development in Poland.
READ ALSO: Types of Software Development Companies in Poland
Capital: Warsaw
Time zone: UTC/GMT +1 hour
Population: 38 million
Largest cities: Warsaw, Kraków, Łódź, Wrocław, Poznań, Gdańsk
Language: Polish
Currency: Złoty
In 2024, Poland’s IT services market shows competitiveness, growth, and recognition both globally and regionally. Below are several key numbers regarding nearshoring in Poland to bolster this statement.
Poland, according to Emerging Europe, boasts the most competitive IT sector among 23 countries in CEE. With a robust CAGR of 7.60% expected by 2028, it’s one of the largest markets of IT services in Europe.
The IT Competitiveness Index in Central and Eastern Europe (CEE) places the country third in the region, surpassed only by Estonia and Lithuania. The country deserves such a high score due to the quality of software developers, the overall development of the IT sector, and the business climate.
The tech industry plays a significant role in the Polish economy. It’s accountable for 8% of the local GDP. In 2024, the IT services market shows dynamic growth and is expected to reach $8.31 billion.
When it comes to the exports of IT services (one of its forms is nearshoring), Poland is expected to reach $13 billion by 2026. It’s a 3.6% growth as compared to $10 billion in 2021.
When it comes to the global recognition of outsourcing in Poland, in 2023, the country took the 4th position as the most favored Customer Experience delivery point. It’s the only European destination to secure a position in the top 5.
Finally, according to the Global Innovation Index (GII) 2023, Poland ranks 41st among 132 economies, which is an indication of a determined focus on exporting IT services.
Poland has carved a strong position in the global software industry. It’s home to nearly 50,000 tech companies of various sizes, including 10 unicorns. The country also ranks within the top 40 startup ecosystems in the world, with strong innovation potential in Marketing & Sales, Hardware & IoT, and Healthtech.
Over 1,300 companies offer software development in Poland, as per Clutch. Such a number can be chalked up to the availability of a skilled, well-educated IT workforce in the market.
Another important factor in the growth of nearshoring in Poland is the increasing trend of foreign companies tapping into its talent pool. Capgemini, Amazon, Sii, Accenture, and IBM are the five tech behemoths that shape the Polish tech scene. These foreign-invested enterprises have development centers scattered across various regions of Poland. Moreover, these companies take the lead in employment – they are accountable for employing 36,000+ IT specialists.
Google, Samsung, Facebook, Amazon, Intel Google, Microsoft, Oracle, Nokia, and Cisco are other notable players in the market of software development in Poland. On the one hand, it’s a great testiment of a talent pool quality. On the other hand, the competition for engineers is growing rapidly pushing salaries up.
Finally, according to the Source Seek report, Polish software companies are strongly present in such domains as Security, Energy, Automotive, Education, and Finance & Banking.
The population of Polish developers is the highest in the CEE region – the country boasts 430,000 technologists. This number is higher than that of its closest competitors, Ukraine (307,000 developers) and Romania (202,000 developers). Thus, nearshoring in Poland will give you access to almost a quarter of all developers available in CEE.
Geographically, the majority of Polish developers reside in the three major tech hubs, Warsaw, Kraków, and Wrocław:
When it comes to the proficiency of Polish developers, JavaScript, SQL, HTML/CSS, and Python top the list of the most common programming languages. Here’s a full breakdown:
Software development in Poland is a diverse landscape. The share of programmers in the overall pool of developers is at 53%. Other IT roles in the pool include:
The salary range of Polish developers is based on three types of employment contracts, such as Job Contracts, B2B Contracts, and Contracts For Specific Work. As a service company, we analyzed the data concerning B2B contracts. Here’s the average salary for this type of contract in 2023:
Role | Salary per month, EUR |
IT Architect | 6,712 |
Project Manager/ Product Owner | 4,690 |
Programmer | 4,756 |
Data Science /ML/AI professional | 5,253 |
IT Administrator/ DevOps | 5,327 |
IT / BI Analyst | 5,077 |
UX / UI designer | 3,365 |
Quality Assurance | 3,916 |
Furthermore, we dived into various job boards to analyze the salary ranges of Polish developers in various technologies to see the current trends. So, here’s the salary of Polish developers in terms of technology based on our speculation:
Role | Salary per month, EUR |
Java developer | 2500-6,000 |
JS developer | 1,600-4,300 |
Python developer | 2,500-5,300 |
.NET developer | 2,000-5,300 |
Scala developer | 3,400-7,000 |
PHP developer | 1,800-4,200 |
Android developer | 2,300-4,600 |
iOS developer | 2,300-4,600 |
Another significant report, shows the range of rates for software development in Poland.
Role | Min./EUR | Avg./EUR | Max./EUR |
IT Director/ CIO | 6,200 | 10,700 | 13,700 |
Software Development Manager | 5,700 | 8,000 | 9,600 |
Java Developer | 3,000 | 4,100 | 5,000 |
.NET/ C# Developer | 2,700 | 3,800 | 4,600 |
C/ C++ Developer | 2,700 | 3,600 | 4,100 |
Big Data Developer | 3,600 | 4,300 | 5,200 |
Front-end Developer | 2,700 | 4,000 | 3,600 |
PHP Developer | 2,300 | 3,200 | 3,800 |
Mobile Developer | 3,200 | 4,100 | 4,600 |
RPA Developer | 2,300 | 3,200 | 3,800 |
Automation Tester | 2,700 | 3,600 | 4,000 |
Manual Tester | 1,800 | 2,300 | 2,700 |
Business / System Analyst | 2,900 | 3,600 | 4,300 |
IT Project Manager | 2,900 | 4,100 | 5,000 |
Network Administrator | 2,700 | 3,400 | 3,800 |
Unix / Linux Admin | 2,900 | 3,600 | 4,300 |
Microsoft Windows Server Admin | 2,900 | 3,600 | 4,300 |
Infrastructure Manager | 3,800 | 5,000 | 5,700 |
Database Admin (Oracle, Microsoft SQL) | 2,900 | 3,600 | 4,100 |
ABAP Developer | 3,600 | 4,300 | 5,000 |
Security Manager | 6,100 | 7,200 | 9,100 |
Nearshoring in Poland is driven by well-educated IT specialists. The country is home to 86,000 IT students, with 11,000 IT professionals graduating each year. Moreover, Poland ranks third among EU countries in the number of graduates in natural sciences, technology, and IT per 1000 population aged 20–29.
According to the survey, over two-thirds of Polish IT specialists have higher education, including 39% with Master’s degrees. Only 8% of respondents completed their studies without a diploma and acquired tech skills through self-education.
Furthermore, Poland boasts over 400 institutions, 22 of which are featured in the QS World University Rankings 2024. The country’s 18 technical universities, including the famous AGH University of Science in Kraków and Warsaw University of Technology, contribute to the quality of technologists available for nearshoring in Poland.
Polish developers have a solid command of the English language, with B2+ as an average proficiency level. As per the EF EPI index, in 2023, the country was ranked 11th globally and 9th in Europe, which solidifies its status as a country with “very high proficiency.”
The focus on technical education, coupled with Poland’s excellent English language skills, makes outsourcing in Poland particularly lucrative for international clients. Moreover, the proficiency extends beyond English, which is crucial for nearshoring. In Poland, many ICT graduates are proficient in other European languages such as German, French, Spanish, or Italian.
There are many factors to consider when deciding which countries are suitable for nearshoring. One important factor is the availability of skilled workers. CEE has a large pool of IT specialists, making it an attractive option for companies looking to nearshore. Additionally, labor costs in CEE are typically lower than in Western Europe, making it a more cost-effective option.
Nearshoring to Poland is an increasingly popular option for Western businesses thanks to its relatively low costs, well-developed infrastructure, and a large pool of English-speaking talent. Poland is also located in Central Europe, making it easily accessible for businesses based in the region. There are many reasons to go with software nearshoring in Poland, including the following:
There are many reasons to nearshore IT services to Poland, but some of the most common reasons include reducing costs, accessing skilled labor, and improving communication. Let’s
Contact us to discuss your needs and let’s see if nearshoring to Poland is a viable option for you.
When it comes to building remote technology departments, there are three key models to consider: R&D vs. Outsourcing vs. Staff Augmentation. These options have proponents among software development firms and are common in many domains.
A popular opinion is that these models apply to any kind of project. However, it’s only sometimes the case. Before you pick any of these approaches, it’s worth taking a look at the differences between them.
While our article focuses on the differences between R&D vs. Outsourcing vs. Staff Augmentation, feel free to reach out to us to see which model suits your business best. As a company that launches remote teams of software engineers across Central & Eastern Europe and LATAM, we’ll gladly shed more light on these and other models of remote cooperation. Let’s begin with definitions.
An R&D (Research and Development) Center is a branch of a tech company located abroad. The core goal of an R&D team is to generate innovative solutions. It may involve improving an existing product or developing a new solution.
Outsourcing is a model where a company hires a provider to delegate the software development process. During this cooperation, the provider sets up a team on their own, assigns a Project Manager, and is fully responsible for the delivery. The client has a limited influence on the SDLC.
READ ALSO: Outsourcing vs Outstaffing: Which one is Best for you?
Staff augmentation is a way to add team members on an on-demand basis. Not only does this approach let tech leaders find the needed skills but also helps them stay in full control over the remote team.
In the R&D vs. Outsourcing vs. Staff Augmentation standoff, what are the key differences between these approaches? Let’s take a look at several parameters to find out.
R&D: R&D units function abroad under the umbrella of the company brand. There are several possible setups. First, it can be a stand-alone engineering team under the vendor’s roof. The vendor covers HR, recruiting, retention, accounting, legal services, IT infrastructure, etc. Alternatively, you can create a stand-alone unit with a separate office, dedicated HR, accountant, and office managers. If you are looking to create a separate company, this option is best for you.
Outsourcing: This approach lets you offload the work to the provider and wait for their team to achieve the pre-defined milestones. Typically, you neither have access to the software development team nor can oversee the SDLC. Instead, the project manager will be in touch with you to help you stay on top of the progress.
Staff augmentation: With this arrangement, you’ll communicate with the team throughout the entire SDLC. You’ll track the team’s performance, progress, and day-to-day work. You’ll also build your own company culture as you see fit. And what is more important – you’ll stay in charge of the development process.
The difference: In the Staff Augmentation vs R&D vs Outsourcing paradigm, if you want to communicate and work with the team directly, it’s best to choose R&D or Staff Augmentation. Outsourcing will typically leave you out of team control.
R&D: With an R&D center, a vendor will hire staff for your organization according to your vision, with the help of a dedicated recruiting team on their side. On behalf of your brand, they will ensure your R&D team is both skilled and fits your brand culture-wise.
Outsourcing: In this model, the step of team member selection is non-existent. It’s up to the provider to pull together a suitable team regarding skills and experience for your project, no matter whether it consists of shared or dedicated resources.
Staff augmentation: This arrangement obliges the provider to consult with the client during team creation. The provider handpicks and pre-approves team members according to your needs but the decision to hire is yours.
The difference: If you are choosing between Outsourcing vs. Augmentation vs. R&D, the choice typically boils down to whether you want to know who exactly works on your project. With Staff Augmentation or R&D, you’ll approve all team members yourself.
R&D center: The goal with this model is more ambitious than with Outsourcing or Staff Augmentation. R&D units aim to increase your company’s value, create a long-term team, generate and implement new ideas, build an innovative product, and introduce innovation that may disrupt the industry.
Outsourcing: If you don’t have software development expertise, outsourcing is the way to go. The outsourced team can build a product from scratch or perform a part of development, for instance, a specific task like Quality Assurance or Cloud migration.
Staff augmentation: The goal of this model is to resolve the scaling problem in your organization. The vendor of this model will help you access experts with the skills you need and integrate them into your team.
The difference: When choosing between R&D vs. Outsourcing vs. Staff Augmentation, do you need to increase your company profitability, bring in the lacking software development expertise, or fill in the gaps in tech talent? Choose the model based on these goals.
R&D: R&D centers tend to include from 20 up to 100 people, and even more. Given its volume, building one can be a long-term game. Thus, R&D can be that high-level goal that you aim to achieve in the next 3-5 years or even longer.
Outsourcing: It can be a long-term strategy as well, as you need a team to cover the entire SDLC, from ideation through design and development to deployment.
Staff augmentation: Short time-to-hire is the hallmark of this model. This model lets you add the experts with the required skills within a matter of weeks – as opposed to months as with in-house staffing. It’s an effective way to add specialists for short to mid term.
The difference: When comparing R&D vs Outsourcing vs Staff Augmentation, R&D takes more time than other approaches. If we were to compare Outsourcing vs. Staff Augmentation, the latter offers short time-to-hire. Finally, outsourcing teams can be set up fast in case of a bench, and up to 3-6 months depending on the size of the project and specifics.
R&D: It should be considered as a division of your company. Moreover, an R&D center may further include a director of R&D at the helm, several branches, for instance, an idea discovery department, a product development department, or an Intellectual Property department. In the tech sector, the common roles for an R&D unit are:
Supporting roles
Product development roles
Outsourcing: The structure of this model is straightforward: Client, Provider, Team, and Project Manager. This type of cooperation doesn’t leave room for the client’s involvement in the SDLC. The provider decides what kind of team structure is the best fit for the project. Instead, the client typically communicates with a project manager and isn’t concerned about what is under the hood of the development.
Staff Augmentation: The structure of this approach is akin to that of outsourcing but with one significant difference: Staff augmentation puts the client in the spotlight of the SDLC. The client leads the remote software development process, and augmented engineers are fully integrated into the client’s company processes – from recruitment to team management. The provider helps access tech talent as well as recruit, integrate, and retain team members.
The difference: When it comes to R&D vs Outsourcing, the structure of R&D is more comprehensive, consisting of various departments overseen by a director of R&D. Outsourcing has a straightforward structure involving the client, provider, team, and project manager. When comparing Outsourcing vs Augmentation, the latter shares a structure similar to outsourcing but implies higher levels of client involvement.
READ ALSO: Launching an R&D Center: An Expert Addresses Key Questions
R&D: Launching an R&D is a good practice to keep IP within the company. With an R&D team, the client has direct oversight of security measures and procedures.
Outsourcing: In this model, IP protection takes a significant place in the contractual agreements. Most providers prioritize security as their main selling point, but working with external staff always requires special legal frameworks and protocols to mitigate risks. Also, the codebase is stored on the vendor’s server until production ends and is paid in full.
Staff augmentation: Generally, the IP generated by the remote team members stays on the client’s side. Just like with outsourcing, data encryption, access control, NDAs, compliance with industry standards, IP ownership, and other measures are necessary to keep threats at bay.
The difference: In the R&D vs Outsourcing battle, R&D has the upper hand when it comes to IP protection. R&D is typically a secure environment as the client maintains direct oversight of security measures and procedures. If we look at Outsourcing vs. Staff Augmentation, the latter ensures that the IP stays within your organization. With outsourcing, IP ownership is defined in the agreement.
R&D: Given that R&D is like an offshoot of the client’s organization, the client’s board of directors decides on the budgeting and expenditure of their R&D efforts. It’s also worth mentioning that upfront investments and ongoing operational costs go hand in hand with launching an R&D. You can significantly reduce the cost of R&D in case of an under-the-roof scenario where the team will be located in the vendor’s office. In this case, the vendor will also cover all the necessary related team services.
Outsourcing: When comparing R&D vs. Outsourcing in terms of cost control, the latter is a more flexible approach. The client has the freedom to negotiate the price based on the type of services. Outsourcing is an ideal approach for smaller projects with fixed scope, as the price for the works can be agreed on beforehand.
Staff augmentation: With this approach, you can pay for the time an FTE has invested into your project per month, plus a vendor’s fee. This structure is best for long-term cooperation or projects where the scope isn’t set in stone and requirements can change.
The difference: In R&D, the client maintains control over budgeting. When it comes to R&D vs. Outsourcing, both approaches require upfront investments. However, with Outsourcing the price is typically fixed. In the Outsourcing vs. Staff Augmentation paradigm, the price for augmentation is defined by the time an FTE invests in the project each month, along with a vendor’s fee.
The choice between R&D vs. Outsourcing vs. Staff Augmentation boils often down to your goals, team dynamics, your involvement as a client, cost, and IP protection. We’ve wrapped it up in the table below:
Criteria | R&D | Outsourcing | Staff Augmentation |
Team access | Direct | Limited | Direct |
Team format-ion | Through a local manager | Uses a provider’s team | Through a vendor, the client approves |
Project goals | Innovation, idea generation | Access to software development expertise | Resolving team scaling problems |
Time | Long-term | Depends on the project size | Fast time-to-hire |
Struct-ure | A comprehensive division of your company | Provider+Client +Project Manager | Integrated into the client’s team |
IP | Secure, direct client oversight | Defined by a contract | IP stays with the client |
Cost control | Defined by the client | Fixed, Project-based | FTE monthly salary+vendor fee |
READ ALSO: Remote Teams: Why Should You Build One in 2024?
Whether you’re looking for an R&D, Outsourcing, or Staff Augmentation partner, it’s best to pick one who will help you achieve success, no matter the model you select. As a company that builds remote teams for global companies, we can offer:
Let’s connect.
What do Gitlab, BaseCamp, InVision, Zapier, Trello, American Express, and Hubstaff have in common? All of them are powered by remote teams.
Last year, Gartner found that 58% of companies have at least some tech talent working from another country. This is a twofold increase since 2019.
What is a remote development team? In the tech sector, remote development engagement means building a software development team abroad. This team typically operates in a different time zone, leveraging technology to synchronize and collaborate with your local staff.
It looks like remote teams are here to stay. In this post, we’ll share six key reasons why you may want to commit to a remote-based model in 2024.
Remote teams are often associated with as-needed hiring. For instance, if you need a Python developer and a Quality Assurance expert to add to your Data Science project, but aren’t sure if your team needs those roles in the long run. Hiring a full-time employee in such a scenario might be costly. That’s where a remote development team steps in. You can create one on-demand, without the burden of in-house staffing like overhead and employee retention services. After the project is done, you can enjoy the freedom to continue working with your remote team or disband it.
READ ALSO: Benefits of Agile Nearshore Development
The grueling truth is that there’s been a 23% increase in hourly rates for software development in North America, according to Accelerance. So, if you’re looking for ways to save, building a remote team can be the best financial decision you’ll ever make. That’s because one of the significant advantages of this model is cost efficiency. Hiring developers in a location where salaries are much lower doesn’t strain your budget as much as a home-based team does.
Another reason for going with a remote team is that an in-house team typically comes with additional expenses you can trim, including overhead costs, employee benefits, and more. At nCube, our model is based on a fixed rate, meaning the client only pays for a full-time employee, while we take care of an employee’s insurance, taxes, motivation program, and HR support.
Many businesses hope to grow their profits thanks to the transition to remote development in 2024. A recent study from Accelerance shows that partnering with a remote development firm can save a company from 40% to 70% of overall costs, making it an excellent reason to consider having a remote development team as an option. Here’s a look at software development rates by region:
Source: Accelerance 2023
Finally, building a remote team is a lucrative solution for many because it’s a good way to save money for marketing and business analysis, which are vital for increasing your profits. Thus, it’s reasonable to state that companies expect their remote teams to impact their bottom lines in a positive way.
Besides being known as high maintenance, it can also be time-consuming to assemble an in-house team. You can spend months looking for strong candidates in your location. In the fast-paced nature of our world, making the right decision quickly is key to beating the competition. Hiring outside your geographic location allows you to tap into an ocean of talent and staff your team without costly delays, given the variety of talent up for work.
By choosing a remote development team, you can focus on hiring the best person for the job, rather than looking for someone willing to relocate. Besides, when your search is limited to one city, finding the right candidates, especially on short notice, can be problematic. On the other hand, when you can choose from various locations around the globe, you have the opportunity to staff your remote team with the brightest minds and do it faster than with traditional recruitment.
Remote development teams can be the antidote to economic turbulence. They provide agility without locking you in long-term financial commitments of permanent staff. Thus, it’s a flexible solution for companies looking to build or augment their tech team. The possibility to scale up or down as needed lets companies respond to uncertainties that may lie ahead.
Talent over location is the motto behind an entire remote team trend. For example, there are nearly 1.3 million software engineers in Eastern Europe, making the region a true powerhouse for tech talent. Not only can you find specialists with more general technological backgrounds, but you can also hire for more sought-after tech skills, from AI, Cloud, Data Science, and IoT engineers to DevOps and Blockchain specialists. With over thousands of graduates joining the workforce annually, in our experience, with the right approach, it’s possible to set up a full-fledged remote development team in Eastern Europe in as fast as 4-6 weeks.
READ ALSO: Offshore Development Center vs. In-House Team: Which one is Best for You?
The downside of a co-located team is that when people work in a shared space for a long time, their creativity can abate. Team members tend to get used to each other (and their surroundings as well) and begin to think alike, and thus may struggle to produce original ideas. This is especially true for close-knit teams that have been working together for years.
Adding remote team members can bring a wealth of fresh ideas to the table. More often than not, remote teams include people from many walks of life and of various backgrounds. Thus, they can come up with solutions to otherwise unraveling tasks. Thus, we can say that a remote team presents diverse thinking patterns, leading to the benefit of diverse viewpoints.
When the first wave of lockdown hit, remote teams were commonly perceived as a necessary evil. A few years later, many companies see remote teams as an infinite source of profit, innovation, and talent. While we don’t expect Silicon Valley to become a ghost town any time soon, we can be sure that remote teams are the new norm.
As a remote team provider, here’s what our approach includes:
Our approach lets you communicate with each team member directly and manage the SDLC yourself. Your remote team members will work under your management, report to you directly, and become an indispensable cog in your operations.
Your remote team will be solely dedicated to your project. The team members we provide will work full-time as if they were your in-house employees.
We pull together remote teams of software developers that match your requirements in full. That includes tech skills, soft skills, culture fit, domain expertise, and English proficiency. No matter the competencies you’re looking for in a candidate, we’re always ready to go the extra mile.
Central & Eastern Europe and Latin America are the most skilled tech hubs in the world. We have a network of over 125,000 developers located across these regions. You can launch your team in the time zone of your choice.
Let’s connect to discuss the opportunities for remote development in 2024 for your organization and how nCube can help you augment your local team.
Providers of offshore IT services have long since proven their worth. The flexibility of this solution helps organizations reduce overhead and switch to more cost-effective resources when drastic cutbacks are required. If you’re still weighing the positives and negatives of this approach, this post aims to complement your vision of the topic and help you understand if it’s suitable for your business.
Before we dive into the pros and cons of IT offshore outsourcing, let’s define it. In this approach, you delegate your software development activities to vendors of offshore IT services located overseas or in a location at a significant distance from your headquarters. For instance, we at nCube provide offshore IT staffing in regions such as Central and Eastern Europe (Poland, Ukraine, Romania, the Baltics), Western Asia (Armenia, Azerbaijan, Georgia), and Latin America (Brazil, Argentina, Mexico). These countries have a strong potential to become centers of software development excellence for EU and North American companies due to various reasons:
Thanks to these reasons, offshore IT staffing as an approach to expanding internal tech units is quite popular these days. According to Statista, in 2024, the market of offshore IT services will reach 512.47 billion dollars in revenue.
Below is a brief overview of the strengths and weaknesses of this approach.
Now let’s go over the pros and cons of IT offshore outsourcing in more detail.
The high cost of in-house software development is the main reason prompting businesses to delegate their software development tasks to overseas providers. As Accelerance reports, businesses can save from 40% to 70% of overall costs by partnering with offshore IT services. Not only are the rates of software engineers lower in offshore regions but also overseas facilities let you cut back on team administration, retention, and IT infrastructure expenses.
Many EU and North American companies struggle to find developers adept at popular programming languages (Java, JavaScript, Python, PHP, etc) and in-demand technologies (IoT, AI/ML, Blockchain, etc) alike. When weighing the pros and cons of IT offshore outsourcing, the shortage of local skilled technologists is a significant argument in favor of offshore IT staffing. Such offshoring regions as Central & Eastern Europe and Latin America boast large pools of quality tech skills (over 2 million software developers combined), which makes them ideal destinations for offshore IT staffing.
In the ever-evolving market, offshore IT services offer a high level of agility that companies need to adapt quickly. It’s a fact that offshore facilities are easy to scale. So, when your project requires more skills, chances are you can build a full-blown team within several weeks thanks to vast networks of software engineers. On the other hand, when you need to disband or reduce your unit, providers of offshore IT staffing can do it on short notice.
Providers of offshore IT staffing can help free up your core team from routine tasks. Unlike the outsourcing model, where a team takes on a project and develops it from the ground up, offshore developers can step in at any stage of the project and bring it up to speed quickly. On the other hand, offshore development squads require a great deal of involvement on your part. Although it acts as an autonomous unit, your offshore team will follow your lead and interact with you directly.
When it comes to the pros and cons of IT offshore outsourcing, it’s worth reviewing the following negatives that can potentially impede cooperation with your offshore unit.
In this day and age, remote collaboration is the norm. However, it can be hard to establish efficient communications among team members located in different time zones. With this in mind, many companies choose to stick to in-house teams.
READ ALSO: Offshore Development Center vs. In-House Team: Which one is Best for You?
Yet, there’s another way to look at the time zone challenge – an offshore development model comes with a unique overlapping coverage. In a 24-hour timeline, your internal and offshore team will dedicate 8 hours per day each, which equals 16 hours of work done in a day.
While your offshore squad will be fully dedicated to achieving your goals, you’ll be deeply involved in the software development process. From team formation to managing your offshore unit, the client of offshore IT services is responsible for team management, setting up workflows, and communications. The provider typically covers employee retention, HR processes, overhead, IT infrastructure, but the project’s outcome is always the client’s responsibility.
Offshoring is a multicultural concept, given that the team members will have diverse communication patterns, as they typically stem from different cultures and backgrounds. That being said, offshore IT services should facilitate providing developers with in-depth language proficiency and a track record of being a part of offshore development projects.
Letting providers of offshore IT services handle your operations can pose IP risks. Thus, it’s a good practice to implement security standards and strategies on your side rather than relying solely on your offshoring partner, even if they’ve signed a Non-Disclosure Agreement.
READ ALSO: IT Outsourcing Market in Latin America: An Overview
One of the major offshore software development benefits is the ability for companies to select among a variety of IT hubs and find developers who perfectly match their competence needs, rates, experience, ability to work in a distributed environment, and other relevant aspects. Let’s take a look at destinations that reign supreme in IT offshore outsourcing.
CEE offers good value for money, which is why it is recognized globally as one of the best hotspots for IT offshore outsourcing. The primary beneficiaries of this region are North American companies that rely on the strong IT potential of Poland, Ukraine, the Czech Republic, Hungary, Bulgaria, and Romania, which collectively have around 1 million software developers.
Skills: The region is home to skilled developers with expertise spanning various industries. When it comes to programming languages, the region is a solid repository of JavaScript (front-end and back-end), Java, PHP, Python, Ruby, Android, iOS, and AI/ML talent. CEE is also a good place to hire experts in such sectors as Finance/Banking, Healthcare, Security, Gaming, Automotive, and other industries.
Time zone: A significant offshore software development benefit of CEE is an ample time window for real-time collaboration. This makes it an ideal spot to build a nearshore unit if you’re located in Western Europe and the UK, ensuring complete alignment between your remote and internal team members when working on your project. When it comes to offshore outsourcing, despite differences in time zones, there are usually a few hours of overlapping work time.
Cost: The cost of IT offshore outsourcing in CEE varies from $21 to $118 per hour, excluding vendor fees, as per Accelerance. To find more affordable rates, Ukraine, Moldova, Romania, and Bulgaria are good options, while the Czech Republic, Hungary, and Poland have higher costs of living, which can affect pricing.
LATAM is the go-place region for many companies in times of after-Covid belt-tightening. LATAM’s top IT offshoring/nearshoring destinations include Brazil, Argentina, and Mexico, with an estimated pool of one million IT experts. Brazil alone accounts for half of this talent repository. If you’re a tech leader looking for outsourcing opportunities, let’s explore what LATAM has to offer.
Skills: LATAM’s IT labor market is thriving, with a strong IT sector, startup culture, and new tech education initiatives. Brazil, Argentina, and Mexico rank high in tech and innovation skills according to various reports (Coursera’s Global Skill Report, Global Innovation Index, SkillValue Ranking, etc.) Argentine developers are skilled in computer programming, mobile dev, and Cloud computing, while Mexican developers excel in data analysis, mobile development, and Python/C++ skills. Brazilian developers play strong in cloud computing, data management, and software programming, specializing in languages like JavaScript, HTML, SQL, Java, Node.js, and Python.
Time zone: If you’re located in the USA, LATAM is a true gem when it comes to synchronizing remote and in-house teams. Mexico shares the same time zone as the USA, offering up to 8 hours of overlap, while Brazil and Argentina are in the EST time zone, providing up to 7-5 hours of shared regular work hours with businesses in the US, which is more beneficial than software offshoring.
Costs: The hourly rates for nearshore outsourcing to Latin America are comparable to those in CEE, typically ranging from $28 to $105 per hour, excluding vendor fees. However, it’s worth noting that Brazil tends to have higher rates than Mexico and Argentina, according to Clutch’s data on developer rates.
When it comes to IT offshore outsourcing, it would be remiss not to acknowledge the significant role of Asian countries as a talent powerhouse that has dominated the outsourcing market for decades, primarily due to their cost-effectiveness. But offshoring there can be a double-edged sword, with high chances of compromising between the price and quality. Therefore, in the 2010s, global tech leaders began exploring alternative outsourcing hubs in Eastern Europe and later in LATAM.
READ ALSO: Offshore Product Development: Eastern Europe, Latin America or Asia?
As a company that provides offshore IT staffing, we strive to help you make the most of offshore IT services. Here’s what our approach includes:
A full dedication approach
We aim to strengthen your in-house unit with fully dedicated resources. The engineers we source for you will join your team on a full-time basis, working for you 5 days/40 hours per week. In our approach, engineers will follow your engineering practices and communication patterns as well as adopt your company culture. This way, your offshore team becomes a part of your organization, supplementing your home-based squad.
A customized team formation process
Each client is unique, so we will dive into our network to find candidates that fully match your requirements when it comes to tech skills, company culture fit, English, and other competencies. We are always ready to go the extra mile when it comes to meeting your offshore IT staffing needs.
No intermediaries between you and your team
With us, you will work with and communicate with your offshore team members directly, retaining full control over the provided team. Our approach assumes you will assign tasks and manage the software development process as you see fit.
Only skilled software engineers
As a provider of offshore IT services in Central & Eastern Europe and LATAM, we offer you the opportunity to add best-in-class talent to your team. All developers you’ll meet have undergone our internal screening process, including tech skills, company fit, and English tests. On top of that, the market in our targeted offshore locations is studded with quality engineers with experience working at offshore IT services for EU, UK, and North American companies, which guarantees excellent English skills and domain experience.
Let’s connect to discuss the pros and cons of IT offshore outsourcing for your organization and how nCube can help you build your offshore unit.
If you’re reading this post, you’re probably wondering if it’s worth building an offshore development center vs. an in-house one. As a provider that augments our clients’ in-house software development units with remote tech talent, we’ve seen the best of both worlds. In this post, we’ll shed light on both options so that you can make an informed decision.
If you have a software idea, the reasonable question is how you will turn it into a reality. In many scenarios, it’s not even a question of how you will develop but who is going to work on it. The question of offshore development center (ODC) vs. in-house squads starts with realizing that your local talent pool no longer limits you. Instead, in the connected world we live in, you can assemble an ODC remote center consisting of talented people scattered worldwide and work with them virtually as if they were next door.
In fact, 58% of companies, as per Gartner research, have tech talent working across national borders.
Let’s see how the offshore development centers vs in-house development battle stack up when it comes to various parameters.
Criteria | In-house development | Offshore Development Center (ODC) |
Location | On-premises, without the help of external resources | Remote, often in offshore zones like Eastern Europe or Latin America |
Cost | Higher costs due to expenses associated with permanent staff and overhead | Cost-effectiveness due to zero overhead and employee benefits, as well as lower software development rates |
Control | The client has direct, immediate control | The client has direct control but at a distance |
Talent availability | Limited to the local pool of tech talent | Access to a global pool of tech talent |
Scaling | Limited scaling potential due to local talent pool scarcity | Flexible scaling due to larger pools of talent |
Communication | Implies the benefit of face-to-face communication | Possible communication challenges due to time zone differences and language barriers |
Management | Simpler control and engagement due to closer proximity | Managerial effort required to ensure smooth team synchronization |
Culture | Easier to build a unique company culture | Effort required to instill culture due to a remote setting |
Now, let’s dive in and take a closer look at how you can organize the remote software development process.
In today’s world, we are all familiar with the concept of working remotely, but working remotely and having an actual ODC remote center can be vastly different things. Our model at nCube aims to build an ODC remote centre that will act as an extension of your in-house development unit, as in being fully dedicated to your project, following your company’s workflow, and communicating with you directly. At the same time, you’ll stay in control of the remote development process.
Many companies delegate the task of building an ODC remote center to providers that specialize in setting up teams in a particular region. For example, we build remote teams of Eastern European and Latin American software developers.
Whether you go with our model or decide to build an ODC remote center yourself, we want to show you the benefits and downsides of this solution.
Budget optimization. The question of an offshore development center vs. an in-house department often comes down to cost. Although building a remote team requires a lot of effort, especially if you do it on your own, that effort can be warranted by affordability. It’s common knowledge that a remote workforce is cheaper than hiring in-house development staff, as you can save on overhead. If you choose our model, you’ll get even more coverage, given that we as a provider take care of IT infrastructure, office space, insurance, HR support, employee motivation, team building, and more.
A vast talent pool. This is one of the biggest benefits of ODC: It allows companies to access a variety of skills, both general and niche ones. More so, many remote developers are on par or exceed many companies’ local markets in terms of skills. Another significant benefit that comes with it is that it takes less time to bump into seasoned specialists. This way, you can build an ODC remote center on short notice. The pool of talent we rely on exceeds the 2 million software engineers available in Eastern Europe and Latin America, which lets us source skilled engineers quickly.
Scalability. Another ODC benefit is that working with a partner like us gives you the flexibility to add, remove and replace staff at will, so you can be more pragmatic and never compromise when it comes to your project needs. Compared to an in-house software development unit, it’s much easier to move resources around in an ODC remote center and even build a team faster. For example, at nCube we set up a typical tech team in 2-4 weeks for an offshore development center vs. in-house which takes less time than building a home-based squad.
Simple hiring. Going for an ODC remote center allows you to forget about the hassle of vying for the top talent with tech giants in your home market. More so, if you partner with a vendor who has expertise in building a tech unit (similar to what we do at nCube), they will pre-select employees according to your ideal candidate profile, so you don’t have to wade through tons of resumes each time you need to backfill a vacancy.
Communication barriers and time zone. Although external employees usually vibe well with in-house development staff, there may be some challenges related to time zone differences and language barriers. However, if you partner with the right vendor, those can be alleviated and even turned to your benefit. For example, if you’re based on the East Coast and hire specialists from Eastern Europe for remote development, you will get a lot of coverage, given that they are 7-8 hours ahead of you. Thus, coupled with your in-house software development staff, you’ll get people pushing your project forward around the clock. The downside here is that, with an ODC remote center, it always comes down to the proper management, which sometimes can be laborious.
Management difficulties. Although your remote employees know they work for you (and your brand), it can be problematic to gauge their commitment and loyalty. Let’s be honest: it’s hard to know how your workers feel when you’re separated by distance. Thus, the question of personal engagement of a team member may arise, which can be rectified by regular surveys and one-on-one meetings, just as you do with your in-house software development specialists.
An in-house software development squad is an internal company unit assembled to handle a specific project on the company’s premises. Traditionally, in-house development staff is co-located. However, now that most in-house units have gone with remote work, the term “co-located” has lost its meaning since team members aren’t tethered to the office anymore.
One of the reasons why leaders choose to hire an in-house team is the notion that remote team members are only productive when they are physically present at the office. Another reason is the need to build a team for the core activity that requires close cooperation between all team members, for example, at the start of the project. Let’s take a look at the pros and cons of an in-house team.
A deeper understanding of the inner workings of your business. An in-house software development unit typically accumulates knowledge about your company, domain, market, etc. Thus, it has a lot of business acumen that can be applied to product development, which can be hard to achieve when team members are scattered around the globe.
Face-to-face communication. When everyone is inundated with emails and chats, which is typical for distributed communication, there is a chance your staff might miss something important. As such, the benefit of face-to-face communication definitely speaks in favor of in-house development teams.
With this in mind, if it’s vital for your business to make decisions fast, an in-house development workforce offers a shorter feedback loop and a quicker approval process facilitated by face-to-face communication. When a team works in-house, it’s easier to stay on top of what they are currently working on and shuffle their priorities at hand. Co-located staff is also better positioned to respond to emergencies, given that they operate in the same time zone.
That’s not to say that ODC remote centers can’t provide the same level of control and communication. It’s just that it takes managerial effort to establish stable communication processes. We at nCube help our customers with that, and to that end provide our teams with everything needed for solid communication, including equipped meeting rooms and modern IT infrastructure.
Team spirit. Although it takes a lot of effort to build a strong company culture, in-house software development teams exhibit a sense of camaraderie, which can be put to good use in building strong communication, mentorship, and day-to-day work. As a result of strong chemistry, employees can remain creative, passionate, and productive.
Talent scarcity. Gathering all the needed experts in one place can be challenging. The demand for good developers is at an all-time high, making it much harder to find the needed skills locally. You can overcome this difficulty with an ODC remote center. If you choose to partner with a provider that builds such centers (for example, nCube), the weight of recruitment will be carried by the partnering company of your choice. You will only need to interview and approve the pre-selected candidates.
READ ALSO: Software Engineer Shortage in the World
High cost. ODC remote centers have the upper hand over in-house development teams in terms of cost-effectiveness. Running a local unit, the employer covers health insurance, days off, IT infrastructure, severance pay, and other benefits. Moreover, when a project is at a standstill, having a team of full-time employees can also strain your budget.
Huge investment. It takes time and resources to keep people happy. In light of high demand, software developers tend to change the working place quite often. Finding new developers is always time-consuming when a dozen other companies are vying for tech talent. As a result, you may face some challenges with finding replacements and therefore lose precious time.
If you’re still weighing offshore development center vs. in-house, we should admit that both models have their benefits and shortcomings, but at the end of the day, the choice depends on your company’s needs. Before diving in, you might want to consider deadlines, budget, and your management experience. To sum it up, here are the typical scenarios for the two options.
When to go with an ODC remote center:
When to go with in-house software development:
Select the location of your offshore development team. In this day and age, it’s possible to launch a remote software development team anywhere in the world. However, certain regions can be more advantageous than others. For instance, you may want to build a nearshore or offshore development team. For that, it’s best to consider such regions as Eastern Europe and LATAM – both regions can suit you best, depending on your location.
Are you located in the USA? Then Eastern Europe will be your ideal location for an offshore development team thanks to its reputation for a vast talent pool with a diverse range of skills and innovation-oriented software development.
If you’re a US-based company seeking nearshoring opportunities, LATAM can serve as an ideal destination due to its complete workday overlap with North American companies.
For UK and Western Europe-based companies, Eastern Europe stands out as the optimum nearshoring destination. Apart from minimal time zone differences, remote development providers located in this region offer solid knowledge of Western business practices and exceptional cultural proximity.
READ ALSO: Offshore Product Development: Eastern Europe, Latin America or Asia?
Define a suitable collaboration model. Selecting the right collaboration model is vital and depends on your specific requirements and technological needs. You can launch your remote development teams based on the following approaches:
Staff augmentation is an essential collaboration model where you source remote development talent through a provider in your chosen location. With staff augmentation, you will gain access to skilled technologists who work exclusively for your project as if they were members of your internal team. This model offers scalability, cost-efficiency, and the ability to quickly augment your team’s capabilities as needed. For instance, you can add one or several professionals with competencies your team requires, for instance, a QA expert, a front-end developer, a Data Science expert, etc.
If you intend to expand your organization and add a substantial number of employees, including administrative staff, establishing your own R&D center is the recommended collaboration model of remote development. This approach facilitates the setup of a stand-alone offshoot of your remote office, which can become a valuable asset to your organization.
If your goal is to build a full-fledged remote software team solely focused on your product, you should select a dedicated remote development team. In this model, you will work with a provider who will assist in setting up and launching a remote team according to your project requirements. The provided team will work under your leadership.
Choose members for your remote development team. The selection process is the centerpiece of the success of your remote software development team. It’s important to remember that remote staff isn’t merely hired hands, but rather an essential extension of your local tech unit.
While you will be guided in your search by your vendor, here are some tips to identify the best remote development professional:
The process of building your remote software development teams is a strategic step in the expansion of your organization, so it’s worth investing time and effort. nCube, as a trusted vendor in remote development, can provide valuable assistance in your journey.
Contact us if you’re interested in building an ODC remote center.
By definition, the model of Agile nearshore development is two-fold and combines the best of a nearshore development approach and Agile, a common methodology used in software development. Due to the deficit of software developers, many EU and UK-based businesses bet on the combination of these approaches to tap into the pools of IT talent located in neighbouring countries and optimise their budgets. In this post, we review how Agile nearshore development can benefit your company as well.
Agile is a modern methodology used in software development, which allows teams to build software gradually via short-time development cycles, including such key stages as development, testing, and analysing the results.
Agile excels at dealing with the uncertainty associated with the ever-changing market. When it comes to nearshore units, it helps to tame the chaos that can potentially appear when two distributed units work together.
The Agile approach facilitates effective management, communication, efficiency, transparency, and control over the project progress. All of these aspects play a great role when it comes to creating a seamless collaborative environment for Agile nearshore software development. Below, we go over the benefits of Agile and why it’s adopted by many tech units.
READ ALSO: How to Benefit From Distributed Engineering Teams
Focus on a high-quality product. The core aspect of Agile is flexibility, which allows you to change the project’s priorities instantaneously. Thanks to this, any changes needed for the sake of better quality within the development process can be fulfilled without impeding the overall workflow. Moreover, Agile nearshore development prioritises testing the product as a part of the project execution phase, which enhances the quality of the final product.
Enhanced control over the processes. Thanks to transparency, ongoing communication, integrated feedback, and quality control, Agile lets stakeholders and project managers retain full control over the software development process, which is critical for remote teams. When going with Agile nearshore development, you can have regular progress reports using a wide range of tools and methods.
Reduced risks. Agile guarantees projects a more safe landing due to increased risk prediction and failure prevention methods. The approach offers excellent ways to identify and mitigate mishaps and ensure a more predictable outcome. For example, you can rely on backlogs (a document of features to be delivered) to boost visibility, estimate workload, and plan your future targets.
Continuous improvement. The centrepiece of the Agile approach is continuous improvement. Agile allows teams to develop software gradually, within a continuous process where each version of the product is tested to ensure it’s better than the previous one, which lends itself to better product quality.
READ ALSO: Nearshore Product Development: Eastern Europe and Latin America Overview
More relevant metrics. When it comes to projects with unpredictable outcomes, there’s a lot of unknown. When software development milestones are in flux, so are the priorities and KPIs you set for the teams. With nearshore Agile development, it’s easy to cover all essential metrics within the software development process and make effective data-driven decisions. The methodology lets you keep track of the progress and the team’s performance in an efficient way for each team member using such features as lead time, cycle time, work in progress, flow efficiency, throughput, and more.
Nearshoring is an approach to the formation of a tech team in a neighbouring country. Provided by the vendor of Agile nearshore software development services, the team will work on your project together with your in-house squad while adopting the best practices of the Agile methodology. Here are the key benefits of nearshore units:
Lower rates. While onshore teams are out of the price range for many EU and UK businesses, nearshoring lets companies eliminate the costs for recruitment, onboarding, administrating, and retention of a team of developers. Working with an Agile nearshore software development unit guarantees lower software development costs, so you can further invest that money into growing your business.
Solid expertise. It’s a fact that Western Europe suffers from a lack of tech talent, especially when it comes to the latest technologies, for example, AI/ML, Blockchain, IoT, Cloud, Computer vision, etc. If you’re hard-pressed to add specialists of this caliber, you can bring in the needed talent from neighbouring countries, and even faster. A reliable Agile nearshore development partner, for example, nCube, will provide you with a skilled squad based in Eastern Europe.
Geographic proximity | Time zone. Compared to offshore teams, nearshore units don’t take a full day to fly to, so you can check in on your team in person as often as you need without the added stress of a long journey. Another benefit of close geographic proximity is the time zone, which significantly simplifies communication between your local and nearshore units and puts your teams in a close collaborative Agile nearshore development environment.
READ ALSO: Your Guide to Offshore vs. Nearshore Product Development Comparison
Similar culture. Different cultures can potentially be a complication in establishing a smooth communication process. There’s always a risk of a project going awry due to miscommunication or misinterpretation of messages. Nearshore Agile development lets you work with software developers who are located close enough to be familiar with your culture and share your values. For example, many developers based in Eastern Europe have harbored vast experience working in a multi-cultural English-speaking environment.
The benefits of an Agile methodology and a nearshore development model tend to overlap in many cases. Batched together in one project, these approaches can increase the efficiency of your tech units, add to the transparency of the distributed engineering process, and help you to create a quality product within an optimised budget. Here’s a rundown of the key benefits that come with Agile software development nearshore:
A hands-on approach. Many companies choose the model of Agile nearshore development because it allows them to be personally involved in every aspect – from team creation to guiding a software development process. The benefit of this approach is that it allows firms to adjust the workflow and implement changes instantaneously – unlike other software development models. Also, the client doesn’t hand the keys to the castle to the provider when they work with nearshore units. In nearshore Agile development, they have the ability to manage the process as they see fit – unlike the outsourcing model.
Budget optimization. Agile nearshore development is typically associated with reducing software development costs, as it allows businesses to source talent from more affordable locations. With this methodology in place, you can combine the benefit of lower developer rates with the increased efficiency of Agile methodology where making the changes costs nothing, which significantly reduces your IT budget.
Easy scale-up. The backbone of Agile’s philosophy is flexibility. With Nearshore agile development in place, you can make the most of this benefit, as providers of Agile nearshore software development services typically let you expand or shrink your team on short notice. Nearshoring also enables you to add the needed talent fast, without having to grapple with the formalities associated with increasing or disbanding your team.
READ ALSO: How Software Team Augmentation Helps Achieve Sustainable Results
Autonomy. Some firms prefer to build a nearshore unit to execute a certain type of task, for example, cloud migration or Quality Assurance. Agile nearshore development lets you build self-managing units with increased autonomy that will yet act as an integral cog in your software development project. Following Agile’s best practices, your nearshore unit will share the responsibility for the whole project thanks to the sense of belonging to the bigger unit promoted by the methodology. Providers of nearshore Agile software development can help you to create a unit just like that, guiding you in establishing the right kind of communication and collaboration processes.
Reduced staff attrition. Agile nearshore development helps firms to cope with the biggest problem of IT staffing – tech talent attrition. The methodology lets developers feel that their ideas are valued and appreciated, which turns them into active participants in the software development process. Working in such an environment gives developers fewer reasons to consider other opportunities.
Fast team creation. Building an Agile nearshore development unit is possible at record speed since it gives you access to vast pools of tech talent. With that in mind, businesses located in the UK and the EU tend to seek partners in Eastern Europe where they can enjoy a repository of over 1M developers with experience in Agile nearshore development. The team formation process can take less than a month if you work with a vendor who has a solid network of developers, for example, nCube.
READ ALSO: Five Software Development Success Stories by nCube
When you plan to go for Agile nearshore outsourcing, it’s best to consider the following aspects in advance.
Determine the scope of the project. Before you dive into nearshore Agile outsourcing, it’s best to define your project scope and goals. By doing so, you will set up the venture to success – with a clearly articulated strategy it will be easier for your nearshore Agile software development partner to understand your requirements and expectations, which enables them to provide the right kind of Agile nearshore team.
Ensure a smooth collaboration process. All team members need to be in perfect sync when it comes to the SDLC and communication. This is especially true for nearshore Agile software development teams where close-knit collaboration between the client and the team is essential. Your nearshore developers need to be “in the thick of things” when it comes to communication with your local team. Thus, it’s crucial to ensure transparent communication channels from the beginning.
Maintain agility throughout the project. A nearshore Agile approach assumes high levels of flexibility on the part of the client and the team. So, it’s essential for all to stick with an Agile mindset and make sure you’re prepared for adjustments and adaptations throughout the SDLC.
Build trust. The process of Agile nearshore software development requires a great deal of trust, given that the teams are separated from each other. As such, it’s crucial to regularly share project updates, address concerns, and ensure common understanding. Regular updates, reports on the progress, and team-building activities (even remote ones) will help nearshore Agile teams stay on the same page.
Overall, Agile software development nearshore is a complex endeavor, and choosing a suitable partner is key. As a company that provides nearshore Agile teams to companies worldwide, let us share more detail about how we work.
At nCube, we provide Agile nearshore software development services for our clients from the EU and the UK by sourcing tech talent based in Eastern Europe. We know the ins and outs of the region’s labor market and spare you the task of seeking skilled team members to add to your squad.
We have 15+ years of experience building tech teams who work in a nearshore Agile software development environment. We work with companies stemming from many business verticals, including such industry leaders as AstraZeneca, Green Peace, doTerra, and Dentsply Sirona, to name a few. When it comes to creating tech teams, we cover all fields, from generic programming languages (Java, Python, PHP, JavaScript, etc) to in-demand technologies, such as ML/AI, IoT, Big Data, Cloud, Blockchain, etc.
As a vendor of Agile nearshore software development services, we can help you to build more than just a nearshore team – it can be an offshoot of your company with engineers fully integrated into your workflows while adopting your company’s best practices when it comes to collaboration and communication.
If you’re a proponent of the Agile approach (or any other methodology), contact us to learn about the possibilities of building your own Agile nearshore development squad.