Melissa Malec, Author at HatchWorks

Generative AI Statistics: The 2024 Landscape – Emerging Trends, and Developer Insights

Melissa Malec — Fri, 19 Jan 2024 19:21:05 +0000

With 2023 dubbed the year of Generative AI, what advancements, trends, and use cases might we expect in 2024 and beyond?

To find out we need to look at recent research and AI stats.

In this article, we’re analyzing the statistics and trends informing the adoption and use of AI.

Throughout, we’ll comment on what those AI statistics mean as well as add insights from some of the developers on the HatchWork’s team who are part of our Generative-Driven Development—a method that has led to a 30-50% productivity increase for our clients.

What you’ll be left with is a clear overview of the state of Generative AI and its future.

Table of Contents:

The Current State of the Global AI Market
What Tools Are We Using? Core AI Technologies and Generative AI Systems
Developer Insights on Generative AI: How is it Impacting Software Development
Key Statistics and Trends in Generative AI
The Impact of Generative AI on Employment and Skill Development
Ethical Considerations and Regulatory Landscape
Looking Forward: Where Is Generative AI Going Next?

The Current State of the Global AI Market

Key takeaway: AI is a growing industry, with projections showing an annual growth rate of 37.3% between now and 2030. It’s largely fueled by advancements and the adoption of Generative AI.

AI tech and its potential has mesmerized the world for decades.

Film and TV have long projected a world where artificial intelligence is a facet of everyday life—to both sinister ends (iRobot) and peaceful coexistence (the Jetsons).

We’re closer than ever to finding out just how well humans and artificial intelligence can live side by side. And as a whole, we’re investing big in its development.

In 2022, Precedence Research found the global artificial intelligence market was valued at USD 454.12 billion. It showed North America having the biggest piece of the pie, with their AI market valuation hitting USD 167.30 billion.

In the image below you can see how much money is being invested into AI by geographic area.

And the AI market is only set to grow. In fact, McKinsey projects an economic impact of $6.1-7.9T annually.

Behind much of this growth, high valuation, and investment is the development and increased use of Generative AI.

Gartner reports that in the last 10 months, half of the 1,400+ organizations they surveyed have increased investment in Generative AI.

They’ve also found that 44% of organizations are piloting generative AI and 10% have put it into production. Compare that to 15% and 4% respectively in just March and April of 2023.

The rapid adoption of generative AI demonstrates its potential to revolutionize how we work, the skills we need, and the type of work we will do.

What’s driving our need for AI? It’s a mix of:

Increased Demand in Various Sectors: AI solutions are increasingly sought after in healthcare, finance, and retail. Check out our guide on use cases across various industries.
Advancements in Generative AI: Innovations in neural networks are propelling AI capabilities forward.
Big Data Availability: The rise in big data availability aids in training more sophisticated AI systems.
Complex Data Analysis: AI’s ability to analyze complex datasets is invaluable in numerous applications.
Digital Transformation and Remote Work: The shift towards remote work and digital operations has accelerated the adoption of AI technologies in business.

What Tools Are We Using? Core AI Technologies and Generative AI Systems

Key takeaway: With systems like ChatGPT, AlphaCode, and DALL-E 2 leveraging vast datasets, industries are witnessing a shift towards more intuitive, creative, and efficient processes.

Generative AI relies on core technologies like deep learning and neural networks.

These technologies empower AI systems to learn from vast datasets and generate new, original content. This capability extends across domains, from language processing to visual art creation, and code development. It’s changing how tasks are approached and executed on a daily basis.

Generative AI : A Brief Definition

Generative AI refers to artificial intelligence systems that can create new content or data, which they were not explicitly programmed to produce.

These systems use advanced machine learning techniques, such as deep learning, neural networks, and transformer technology to analyze and learn from large datasets, and then generate original outputs.

This can include tasks like writing text, composing music, creating images or videos, and even generating new ideas or solutions.

Among the most notable tools leveraging generative AI is OpenAI’s ChatGPT, known for its ability to engage in human-like conversations and provide informative responses. It exemplifies the advanced natural language processing capabilities of these systems.

Here’s a list and description of other core Generative AI tools people across industries are adopting:

AlphaCode: An advanced tool designed for programming challenges, utilizing AI to write and optimize code.
Mid Journey: Specializes in generating detailed and imaginative visual narratives based on text prompts.
Copilot: Developed by GitHub, this AI system transforms natural language prompts into coding suggestions in various programming languages. It’s complemented by similar systems like OpenAI’s Codex and Salesforce’s CodeGen.
Katalon: A comprehensive tool for automated testing, integrating AI to enhance the efficiency and accuracy of software testing processes.
Amazon Bedrock: A robust AI platform by Amazon, designed to provide deep insights and analytics, supporting various AI applications and data processing tasks.
CodeGPT: A specialized AI tool for coding assistance, offering features like code completion and debugging suggestions based on Generative AI models.
Hugging Face: Known for its vast repository of pre-trained models, Hugging Face is a platform that facilitates AI development, especially in natural language processing.
Llama by Meta: An AI system developed by Meta, aimed at pushing the boundaries in various aspects of AI, including language understanding and generative tasks.
Make-A-Video: A revolutionary system that enables the creation of videos from concise text descriptions, opening new possibilities in media production.
AI Query: A tool designed for streamlining data analysis and simplifying complex data interactions using AI.
Bard: Focuses on content generation, leveraging AI to assist in writing and creative tasks.
DALL-E 2: OpenAI’s image generation AI, known for creating detailed and artistic images from textual descriptions.
Copy.ai: Aims at automating content creation, particularly in marketing and advertising, using AI to generate high-quality written content.
Murf.ai: Specializes in voice synthesis, enabling the creation of realistic and customizable AI-generated voices for various applications.

This list is truly the tip of the iceberg. Every day new tools are launched into the AI ecosystem.

Time will tell which of them become indispensable to the modern work landscape or who may fall into the deep abyss of almost forgotten memory—anyone remember Ask Jeeves? Or AIM? We do…just barely.

Developer Insights on Generative AI: How is it Impacting Software Development

Key takeaway: Generative AI is already a fixture in the work processes of forward-thinking software developers with data on productivity proving its a worthwhile addition to the industry.

A recent McKinsey report claims Software Engineering will be one of the functions most impacted by AI.

The data and lived experiences of developers back that claim up.

ThoughtWorks reports software developers can experience 10-30% productivity gains when using Generative AI.

While GitHub has run its own studies on the use of CoPilot by software developers and seen positive results on productivity and speed of task completion.

Across two studies (1 and 2) they’ve found developers who use Copilot are:

55% faster in general
88% more productive
96% faster with repetitive tasks
85% more confident in code quality
15% faster at code reviews

At HatchWorks, our integration of AI has revolutionized our Generative-Driven Development process, resulting in a 30-50% productivity boost for our clients.

By utilizing these tools, our engineers have streamlined coding and minimized errors, fundamentally transforming our project delivery methods.

These advancements highlight the significant role of AI in enhancing efficiency and spurring innovation in our field.

To delve deeper into this transformative journey, HatchWorks’ engineers have shared with us their perception of Generative AI tools and how they’re using them to enhance their work.

Further reading: The Competitive Edge: Harnessing Generative AI Tools for Modern Software Development

Key Statistics and Trends in Generative AI

Key takeaway: The world is divided in its trust of AI but businesses are using it to fill shortages and increase productivity in the workplace.

We’ve covered the state of AI, highlighted some core tools and technologies, and talked specifically about how Generative AI is impacting Software Development.

Now we’re covering other key artificial intelligence statistics and trends that are defining the opinions, use, and impact of Generative AI.

Trend: Programming/Software Development is Seeing the Most Impact on Productivity

Stat: AI improves employee productivity by up to 66%.

Across 3 case studies by the Nielsen Norman Group:

Support agents who used AI could handle 13.8% more customer inquiries per hour.
Business professionals who used AI could write 59% more business documents per hour.
Programmers who used AI could code 126% more projects per week.

What it means: It’s not just one industry or function that stands to benefit from AI. It’s all of them.

AI tools likely assist in faster query resolution, provide automated responses for common questions, and offer real-time assistance to agents, thus reducing response times and increasing the number of inquiries handled.

They also can assist in tasks like data analysis, content generation, and automated formatting, enabling professionals to produce higher volumes of quality documents in less time.

In the case of programming, this leap in productivity could be attributed to AI’s ability to automate routine coding tasks, suggest code improvements, and provide debugging assistance, allowing programmers to focus on more complex and creative aspects of coding.

Trend: Adoption of Generative AI is Explosive

Stat: ChatGPT reached 100 million monthly active users within 2 months of launch, making it the fastest-growing consumer application in history.

What it means: Word of mouth marketing and an impressive display of the capabilities of Generative AI likely fueled such fast and widespread adoption.

It suggests we’re hungry for tools that optimize our work while reducing time and money spent elsewhere. It wasn’t a case of if we’d be adopting AI but rather a case of when and for what.

Even Bill Gates has been impressed by the capabilities of Generative AI. He recently wrote a piece titled, The Age of AI has begun. In it he claims to have seen only two truly revolutionary advancements in his lifetime; one being the graphical user interface, the second being ChatGPT.

He even wrote upon witnessing the capabilities of ChatGPT, ‘I knew I had just seen the most important advance in technology since the graphical user interface.’

So not only is the adoption of generative AI explosive in its numbers, it’s explosive in what it can do.

Trend: The East is Generally More Accepting of AI as a Benefit

Stat: In a 2022 IPSOS survey, 78% of Chinese respondents agreed with the statement that products and services using AI have more benefits than drawbacks.

Those from Saudi Arabia (76%) and India (71%) also felt the most positive about AI products. Only 35% of surveyed Americans agreed that products and services using AI had more benefits than drawbacks

What it means: Notably, the US exhibits more skepticism towards Generative AI than other leading nations.

Earlier there was a stat showing Americans are privately investing the most in AI, followed by China. It’s interesting to see the countries that most trust and least trust AI are the ones investing the most heavily in it.

What comes of this could be reminiscent of the US’s space race with the former USSR. The biggest difference is that Generative AI is accessible to the world’s population in a way space technology never was (or likely will be).

And it prompts questions about whether AI technology is more or less dangerous in the hands of everyday people compared to governments. And whether American skepticism of the AI space is rooted in the potential for government overreach, foreign interference, job security, or how autonomous AI thought can become.

Trend: Trust in AI is Divided Among Those with Geographic and Demographic Differences

Stat: Another survey shows that 3 out of 5 people (61%) are wary about trusting AI systems, reporting either ambivalence or an unwillingness to trust. They looked at geographical location as well as generational divides. This time India came on top and Finland bottom.

When we break it down by generation and education we see the young are more trusting of AI as are the higher educated. Those in manager roles are also more trusting.

What it means: Younger people are typically more accepting of advancement in technology than their older counterparts. This stat is thus unsurprising. It’s also unsurprising that managers see the value of AI given their job is to make their teams and departments more efficient and productive. AI is a proven way of doing so.

Trend: Generative AI is Being Used to Fix Labor Shortages

Stat: 25% of surveyed companies are turning to AI adoption to address labor shortage issues, according to a 2022 IBM report.

What it means: The fact that companies are turning to AI in response to labor shortages suggests that AI is increasingly seen as capable of filling gaps left by human workers. This could be in areas like data processing, customer service (through chatbots), and even more complex tasks that require learning and adaptation.

To learn more, watch or listen to Episode 11 of the Built Right Podcast, How Generative AI Will Impact the Developer Shortage.

Trend: Businesses Believe in Generative AIs Ability to Boost Productivity

Stat: A significant 64% of businesses believe that artificial intelligence will help increase their overall productivity, as revealed in a Forbes Advisor survey.

What it means: The belief in AI’s role in increasing productivity suggests businesses see AI as a tool for driving growth. This may involve automating routine tasks, optimizing workflows, or providing insights that lead to more informed decision-making.

This statistic also reflects a response to the rapidly changing market demands and the need for businesses to remain competitive. AI adoption can be a key differentiator in responding quickly to market changes and customer needs.

Worryingly, we should watch that human contribution and value aren’t overlooked to the detriment of the company. Sometimes it’s our humanity that is our best differentiator and businesses should be wary of passing on too much, too quickly to our AI sidekicks.

The Impact of Generative AI on Employment and Skill Development

Key takeaway: AI isn’t replacing our need for human intelligence, it’s freeing human intelligence up to do other work which puts demand on us to upskill in the use of AI.

The emergence and growth of generative AI are shaping job markets and skill requirements and will have significant implications for employment and workforce development over the coming years.

Job Market Dynamics:

Increase in Gen. AI-Related Job Postings: A notable trend is the increase in Generative AI-related job postings. LinkedIn reports that job postings on the platform mentioning GPT or ChatGPT have increased 21x since November 2022, when OpenAI first released its AI chatbot into the world.

Job Creation vs. Displacement: A McKinsey report forecasts that AI advancements could affect around 15% of the global workforce between 2016 and 2030. This statistic encompasses both job displacement due to automation and the creation of new jobs requiring AI expertise.

Skill Development and Educational Trends:

Evolving Skill Requirements: With AI’s growing integration across industries, the skill requirements for many jobs are evolving. There’s an increasing need for AI literacy and the ability to work alongside AI systems as evidenced by the earlier stat showing a rise in AI related postings.

Educational Response: In response, educational institutions are adjusting curricula and offering specialized training in AI and related fields. They’re also finding ways to introduce AI as a tool the teachers and students use. This shift aims to prepare the upcoming workforce for a future where AI plays a central role in many professions.

Ethical Considerations and Regulatory Landscape

Key takeaway: The recent advancements in AI have made us all question its use and regulation. Governments are finding ways to control it while encouraging its use to advance the world.

The use of AI raises a range of ethical considerations, including concerns about its accuracy, the extent of its capabilities, potential misuse for nefarious purposes, and environmental impacts. And with ethical considerations come questions over how we’ll regulate its use.

Let’s look at how public opinion and emerging research highlight the complexities and challenges in this rapidly evolving field.

Incidents and Controversies:

The number of AI-related incidents and controversies has surged, increasing 26x since 2012.

Additionally, the number of accepted submissions to FAccT, a leading AI ethics conference, has more than doubled since 2021 and increased by a factor of 10 since 2018.

Notable incidents in 2022 included a deep fake video of Ukrainian President Volodymyr Zelenskyy and the use of call-monitoring technology in U.S. prisons. This trend highlights both the expanding use of AI and the awareness of its potential for misuse.

Interestingly, it’s those who use tools like ChatGPT often that lose our sense of skepticism in its accuracy. Ben Evans gave a talk on Generative AI and showed the following slide:

The data from Deloitte shows that use correlates to trust.

Challenges in Reliability and Bias:

Generative AI systems are prone to errors, such as producing incoherent or untrue responses, which raises concerns about their reliability in critical applications.

Issues like gender bias in text-to-image generators and the manipulation of chatbots like ChatGPT for harmful purposes underscore the need for cautious and responsible AI development.

Environmental Impact:

AI’s environmental impact is a growing concern. For instance, the training run of the BLOOM AI model emitted 25 times more carbon than a single air traveler on a one-way trip from New York to San Francisco.

However, AI also offers environmental solutions, such as new reinforcement learning models like BCOOLER, which optimize energy usage.

Public Expectation for Regulation:

A substantial 71% of people expect AI to be regulated.

This sentiment is widespread, with the majority in almost every country, except India, viewing regulation as necessary. This reflects growing concerns about the impact and potential misuse of AI technologies.

In fact, President Biden has already “signed an ambitious executive order on artificial intelligence that seeks to balance the needs of cutting-edge technology companies with national security and consumer rights, creating an early set of guardrails that could be fortified by legislation and global agreements.”

Source: AP News

Looking Forward: Where Is Generative AI Going Next?

Despite the ethical and regulatory considerations outlined earlier, the future of Generative AI appears promising from a growth perspective:

Goldman Sachs predicts Generative AI will raise global GDP by 7% ($7T).
McKinsey projects an economic impact of $6.1 – $7.9T annually
Precedence Research believes the AI Market size will hit around USD 2,575.16 billion by 2032.

At HatchWorks we’re most focused on the future of AI as it relates to software development.

We expect the use of AI will only advance over time with further improvements to developer productivity, new use cases for how developers use AI to assist software development, and an evolution in the skills and capabilities businesses hire for (internally and through outsourcing).

And we expect that because we’ve already witnessed it firsthand among our own developers:

Further reading: Generative AI Use Case Trends Across Industries: A Strategic Report

We’ll continue to optimize our approach and inclusion of these AI tools in our processes and equip our Nearshore developers with the education and resources they need to be efficient with them.

If you want to learn more about how our Generative-Driven Development services have led to a 30-50% productivity increase for our clients, get in touch here.

Built Right, Delivered Fast

Start your project in as little as two weeks and cut your software development costs in half.

The post Generative AI Statistics: The 2024 Landscape – Emerging Trends, and Developer Insights appeared first on HatchWorks.

Staff Augmentation: A Guide to Scaling Your Development Team in 2024

Melissa Malec — Tue, 09 Jan 2024 19:58:38 +0000

Needs change quickly in software based businesses.

One minute you have the skills and capacity in-house. And the next, a project comes along that will push your company to that next phase of growth but which you can’t do with your team alone.

You could hire new team members but that means committing to paying salaries, benefits, and more for the foreseeable future. You could outsource but you want your team to work on it just with more people on board.

So how do you meet your needs without overcommitting your budget?

Staff augmentation.

In this guide, we’ll walk you through:

What Staff Augmentation Is
Its Benefits
When It’s Right for Your Business
The Difference Between It and Outsourcing
Best Practices
Key Challenges
How HatchWorks Offers Staff Augmentation for Software Development Teams

As you read, you’ll see this pushpin: . The pushpin comes with a short summary of each main section. From there you can decide to dive into the details, skim it, or move on to the next heading.

Staff Augmentation: Meaning and How it Works

Staff augmentation is when a company temporarily brings in outside staff to enhance the capabilities of their team. It may be because they’re looking to fill a specific skill gap, to increase output, or both.

You can think of it as an expansion of your team’s skills and numbers, without the long-term commitment of hiring new employees.

So rather than taking on full-time employees during periods of high demand only to lay them off when things slow down, businesses can effectively ‘augment’ their staff with highly qualified professionals when necessary.

The aim is to bring in top-notch talent who integrate seamlessly into your existing team for a specific project or period.

How Staff Augmentation Works

First, you identify the gap in your team’s capabilities and expertise.

Maybe you need an expert in a new programming language, or extra hands to meet a tight deadline. Once you know what you need, you reach out to a staff augmentation provider.

These providers have a pool of talented professionals they can turn to. They match you with individuals who have the exact skills and experience your project requires.

And if you’re not exactly sure what you need, a quality staff augmentation provider will assess the requirements of your project and point you in the right direction.

The augmented staff then integrates into your team, working under your direction and alongside your existing employees.

Once the job is done, they move on, leaving your team lean and agile. It’s a strategic way to scale your workforce up or down as your project demands.

At HatchWorks, we provide staff augmentation to businesses who need help on software development projects. This gives our clients the opportunity to source quality software developers quickly without spending the time or money to recruit, hire, and retain them. When you consider how difficult it can be to find and keep developers, staff augmentation in our industry makes perfect sense.

Key Components of Staff Augmentation

Staff augmentation works around three components, each serving a singular purpose that, when combined, delivers an efficient talent solution for businesses.

These components are:

Flexibility: Companies can quickly scale up or down depending on the project needs or season.
Specific Skill Sets: Staff augmentation is an excellent tool to bring in niche skills and expertise not present within the existing team. The augmentation supplier will find and provide personnel that fit the project needs and fill out the capabilities of your team.
Cost-Effectiveness: Since augmentation staff are only onboard for their contract duration, businesses save on long-term salary commitments and other employee benefits. This makes staff augmentation a good financial decision, especially in temporary high demand conditions or specific project requirements.

Key Benefits of Staff Augmentation

Staff augmentations benefits include:

Quality control over project outputs
Access to global talent which can fill in-house skill gaps
Cost effectiveness compared to hiring employees
Scaling up and scaling down on demand

Quality Control

With staff augmentation, quality control is in your hands. You’re not risking handing off work to an external team with different standards because the staff you bring in will be integrated into your systems and your culture.

They’ll be managed the same way a regular employee would, always adhering to the high standards you’ve set, ensuring consistency and quality in every deliverable.

Plus, this approach aids in better resource allocation and optimizes productivity.

Bridging Skill Gaps Through Global Talent

Does your team need an AI/ML expert? A software developer specializing in mobile app creation? A product manager to direct the evolution of your SaaS?

Staff augmentation fills those gaps without requiring months of recruitment. You won’t be confined to talent from one region either. You can find that AI expert in Silicon Valley and plug them into your team virtually. And that software developer? There are plenty of them in Latin America. Maybe your staff augmentation provider finds your dream PM in Colombia.

It’s not just skills that you’re getting either. When staff augmentation is done right, you’re also getting an innovative thinker with a unique approach to problem-solving.

Cost-Effective Solution

Last year, the Bureau of Labour Statistics claimed the need for software developers is set to grow over the next decade. That need can be met by hiring in-house talent which would cost around $159,932 per developer.

Or it can be met through staff augmentation at a fraction of the cost and in a fraction of the time it takes to recruit and hire someone with the same capabilities.

It’s like renting a luxury car for a special occasion instead of buying it. You get the benefits without the hefty price tag of long-term commitments like salaries, benefits, and training. With staff augmentation, you pay for the expertise only when you need it, keeping your overheads low and your financial flexibility high.

Quick Scaling of Teams

Staff augmentation can help you scale successfully. When you’re able to add talent quickly, you can meet tight deadlines and capitalize on unexpected opportunities. Your team, built out with staff augmentation, will always match the pace of your business needs, keeping you agile and responsive.

When to Consider Staff Augmentation for Your Business

It’s the right choice when you need specialized skills, face tight deadlines, or require more flexibility than your current team can provide.

Scenario 1: You need a skillset you don’t have internally

Imagine you need expertise in a specific programming language, something none of your current team members specialize in. This is a perfect scenario for staff augmentation. You can quickly bring in a specialist with that particular skill set, keeping your project on track without the need to hire a full-time employee or retrain your in-house staff.

Scenario 2: You have a quick turnaround

Another perfect time is when you face a sudden increase in workload or a tight project deadline. Let’s say your company needs to develop a new feature that’s critical to your product’s success. Your team is capable, but the volume of work is overwhelming. With staff augmentation, you can bring in additional software developers to handle the increased workload and ensure you meet your deadlines.

Scenario 3: You need to temporarily scale your team

Staff augmentation is ideal for short-term projects or one-off developments where hiring permanent employees is impractical.

You can also outsource to Nearshore providers in place of staff augmentation. A good nearshore team will fit nicely alongside your existing one in a similar way to the talent you’d find through staff augmentation. The difference would be nearshoring also offers the option to hand off a project entirely.

Staff Augmentation vs Project Outsourcing

Project outsourcing is different from staff augmentation because the team or individual you outsource to doesn’t integrate into your workforce.

In staff augmentation, you add skilled specialists to your in-house team for short or long-term projects.

The augmented personnel complements your core team, boosting its capacity and capability.

On the other hand, project outsourcing involves completely transferring the responsibility of certain tasks or services to a third-party. There are also several outsourcing models you can choose from including nearshoring, offshoring, or onshoring.

Both are cost effective models that can produce high quality work for your business.

	Staff Augmentation	Project Outsourcing
Control	High level of control over project and team members.	Less direct control over project execution and team.
Integration	Seamless integration with existing team, maintaining company culture.	Separate team, often with its own culture and methodologies.
Expertise	Access to specific skills and expertise for short-term needs.	Access to a wide range of skills and expertise (short-term and long-term).
Flexibility	High flexibility to scale your team size up or down as needed.	Fixed team size and scope, usually predetermined in the contract but some providers (like HatchWorks) can adjust.
Cost	Pay for specific skills only when needed, potentially reducing costs.	Cost-effective option for all project sizes and scopes.
Management Overhead	Requires internal management and coordination efforts.	Outsourced projects are typically self-managed by the service provider.
Cultural Fit	Temporary staff may require time to adjust to company culture and dynamics.	Cultural and communication barriers might exist, depending on location.
Long-Term Dependability	Not ideal for long-term or ongoing needs.	Suitable for long-term and continuous project needs.
Recruitment Time	Some time needed to find the right talent for specific roles.	Outsourcing companies usually have teams ready to start.
Knowledge Retention	Risk of knowledge loss when contract ends.	Knowledge and expertise are often retained within the outsourcing firm.

Pros and Cons of Staff Augmentation and Project Outsourcing

Need to choose between the two?

Below we’ve outlined the core pros and cons for each.

The table will help you weigh up the differences and determine whether staff augmentation services or outsourcing services is the best route for your business needs.

	Staff Augmentation	Shared Between Both	Project Outsourcing
Pros	Increased flexibility High level of control over project and team members Integration with the existing team	Reduces long-term labor costs and commitments Access to global talent pool Access to specific, often niche skills Adaptability to changing project sizes and needs	More cost-effective Suitable to short-term and long-term needs
Cons	Less suitable for long-term needs	Risk of knowledge loss when contract ends Time investment in starting up and integration	Less control over talent

If you find you’re leaning toward outsourcing, check out our article: How to Select the Right Outsourced Development Team. It comes with recommendations for working alongside an outsourcing company so you can get similar results to staff augmentation.

And if neither model looks right and you want to hire an in house development team, check out our guide: Hiring a Development Team – Everything You Need to Know

Best Practices in Staff Augmentation

Ensuring Seamless Integration

Really, you should treat augmented staff as you would a new employee. That means onboarding them into your company’s workflows, tools, and policies. This can include orientation sessions, mentorship programs, and access to essential internal resources.

To maintain team cohesion, promote team-building activities and regular check-ins. This helps integrate them with your existing team, fostering collaboration and mutual respect.

Regular team meetings can also keep everyone aligned and informed about project developments and changes.

To See Long-Term Success

To sustain high productivity, establish clear goals and metrics from the outset.

Regular progress tracking and feedback sessions help keep the augmented staff aligned with these objectives. Encourage a culture of open communication where they can voice concerns and share updates.

For evaluating performance, implement a system to assess both the quality of work and the effectiveness of integration into your team. Regular reviews of project milestones and individual contributions can provide valuable insights into the success of your staff augmentation strategy, helping to refine processes for future initiatives.

Overcoming Challenges in Staff Augmentation

Even the most advantageous business strategies come with a unique set of hurdles.

When it comes to integrating augmented staff into their teams, organizations often grapple with issues related to:

Communication
culture fit
knowledge transfer
legal compliance

Below we’ll cover the common challenges and present a way to overcome them.

Communication

Challenge: In staff augmentation, one major hurdle is ensuring effective communication, especially when dealing with remote or globally distributed team members. Differences in time zones, language barriers, and lack of face-to-face interaction can lead to misunderstandings and misaligned project goals.

Solution: To overcome communication challenges, establish clear, standardized communication protocols. Use collaboration tools like Slack, Microsoft Teams, or Asana for regular updates and discussions. Schedule regular video calls for more personal interaction and to discuss complex issues. Additionally, creating comprehensive project documentation can help keep everyone on the same page.

Culture

Challenge: Augmented team members may struggle to blend with the existing company culture, leading to a disjointed team dynamic. This cultural misalignment can impact team morale and productivity.

Solution: Establishing a robust onboarding program and continuous training initiatives eases the process of cultural assimilation and knowledge absorption. Plus you can encourage informal interactions and team-building activities to build rapport and understanding among team members.

Knowledge Transfer

Challenge: Effective knowledge transfer to and from augmented staff is crucial but can be difficult due to their temporary nature and possible differences in background or expertise.

Solution: Implement structured knowledge-sharing processes, such as mentorship programs, detailed documentation, and regular training sessions. Ensure that augmented staff are involved in key meetings and decision-making processes to fully understand the project context.

Legal Compliance

Challenge: Navigating the legal complexities of staff augmentation, such as contract terms, intellectual property rights, and labor laws, can be daunting and risky if not handled correctly. From a logistical headache to real penalties, you could be getting more than you bargained for.

Solution: Work with legal professionals to draft clear contracts outlining the terms of engagement, confidentiality agreements, and compliance with relevant laws. Regularly review and update these contracts to reflect any changes in legal requirements or business objectives. Proper legal groundwork ensures a secure and compliant staff augmentation process.

Your staff augmentation service provider should support you here as well.

The HatchWorks Approach to Successful Staff Augmentation for Software Development

At HatchWorks, we understand the critical role that staff augmentation plays in the success of software development projects.

We specialize in providing staff augmentation services that seamlessly integrate talented software developers into your in-house development teams. We don’t want these developers to merely bring in technical skills, we want them to align with your company’s culture and project goals. This ensures a smooth, efficient, and cohesive workflow, enhancing both the productivity and the quality of the output.

In addition to staff augmentation, HatchWorks offers outsourcing services in the form of Nearshore Software Development.

Different projects have different needs, and our flexible approach allows us to tailor our services to your specific requirements. Whether you need a complete outsourced team to handle your project from start to finish or additional expertise to complement your in-house team, we have a solution that gets you your desired outcomes.

If you want to augment your development team or tap into the cost effective benefits of Nearshore Software Development, get in touch with us today.

Built Right, Delivered Fast

Start your project in as little as two weeks and cut your software development costs in half.

The post Staff Augmentation: A Guide to Scaling Your Development Team in 2024 appeared first on HatchWorks.

Nearshore vs Offshore in 2024: A Detailed Comparison of Outsourcing Models

Melissa Malec — Mon, 08 Jan 2024 17:57:33 +0000

Either you’ve been burned by outsourcing software development in the past and want to see if there’s a better way or you’re weighing your options for the very first time.

The Nearshore vs Offshore crossroads is a place many businesses find themselves, especially when it comes to software development needs. We’ve witnessed it with dozens of our own clients and have helped them smoothly transition to a Nearshore model.

But that doesn’t mean offshore doesn’t have its place for certain projects too.

In this article, we’re looking at nearshore vs offshore outsourcing models and helping you choose what will be best for your business.

Here’s what you can expect:

What is Nearshore Outsourcing?
What is Offshore Outsourcing?
Nearshore vs Offshore Models (What’s the difference?)
Pros an Cons of Nearshore and Offshore Outsourcing
Choosing between them: Factors to Consider
How HatchWorks can get you the best from the Nearshore model

What is Nearshore Outsourcing?

Nearshore outsourcing is when a company delegates specific tasks or projects to an agency, team, or freelancer based in a neighboring country.

For US companies, this means outsourcing to countries in Latin America such as Costa Rica where the cost of services are lower while the quality of work remains high.

This is often used as a way to avoid hiring an in-house team or using the more expensive Onshore outsourcing model where you’d work with someone in the same country as you.

It’s a popular model for software development services because Latin America boasts rich software talent and is time zone friendly.

Further reading: 24 Nearshore Software Development Statistics to Know in 2024

What is Offshore Outsourcing?

Offshore outsourcing is when a company hires a team in a far-off country to complete work for them. They can work with an offshore company or freelancer who offers services they need but can’t or don’t want to handle internally.

An example would be a US company working with one in the Philippines or India. This choice is mainly about saving money, as these distant teams usually cost less.

But they also come with big time zone differences and cultural gaps which can make communication and collaboration more challenging. For some businesses, the cost benefits are worth these extra hurdles.

Outsourcing Software Development: Nearshore vs Offshore Models

While nearshore and offshore outsourcing models both involve working with a team from another country, there are some key differences that will impact which model is right for your business needs.

Below is a table that outlines these core differences. And below that, we’ll look at the differences that matter most when outsourcing software development services.

	Nearshore outsourcing	Offshore outsourcing
Real-time collaboration	Same or similar time zone	5-12 hour time zone difference
Cultural affinity	Very similar work culture and practice	Not as similar
English language proficiency	Moderate to low proficiency across Latin America	Wide range from Very Low to High across Europe and Asia
Travel accessibility	2-5 hour flights, less complicated than traveling to Europe or Asia	8+ hour flights, plus an increased need for overnight accommodations
Project security	Increased likelihood of shared or similar data protection laws	Not likely to share data protection laws
Cost savings	Not as pricey as Onshore	Affordable but hard to manage
Quality	Equal or great quality to Onshore	Lower quality than Onshore
Risks	Medium risk	High risk

Geographic Proximity and Time Zone Alignment

Winner= Nearshore Software Development

Nearshore Software Development	Offshore Software Development
Is in the same or similar timezone to you making quick or real-time collaboration easier. If needed, you can visit the outsourced team relatively easily.	Will have a 5-12 hour time zone difference which can cause delays to project development and trouble communicating effectively. Any travel between countries would be long and expensive.

One major difference between Nearshoring and Offshoring is the geographical proximity of the outsourced team to the company hiring them.

With Nearshore Software Development, the close physical location means you’re often in a similar or same time zone as your outsourced team. This alignment allows for more synchronized work hours and smoother real-time collaboration.

Imagine needing a quick update or having to make a sudden change in your project; with nearshore, your team is just a quick video call or Slack message away. You can unblock projects, adjust to changing requirements, get updates, and collaborate in real time.

On the other hand, offshore outsourcing usually involves significant time zone differences. While this can be managed, it often leads to delayed communications and a need for more rigid scheduling.

Let’s say you’re in the US and your offshore team is in Asia; when you’re wrapping up your day, they’re just starting theirs. This can slow down the pace of work, especially if immediate feedback or decisions are needed.

Time zone differences can impact not just daily communication but also the overall project timeline and efficiency. While some see this as a manageable challenge, others find it adds unnecessary complexity, particularly in fast-paced or Agile project environments.

Cultural Affinity and Communication

Winner= Nearshore Software Development

Nearshore Software Development	Offshore Software Development
Nearby countries often have overlapping cultures and greater exposure to the other’s language. This can enhance communication and set the foundation for similar working cultures.	Consider the cultural differences between countries in Asia and America. These differences can unintentionally lead to misunderstandings and misalignment in what’s expected from one another, potentially causing friction and delay.

Cultural alignment is another differentiator between the two outsourcing models.

With Nearshoring, the cultural and language divide is narrower. This can make teamwork feel more natural and communication more straightforward.

For instance, if a US company works with a Nearshore team in Latin America, they’re likely to find more in common in terms of work ethics, business practices, and even holidays

However, working with an Offshore software development team somewhere like Asia, may present more cultural barriers, ultimately affecting project deliverables.

For example, a US team might value direct communication and fast decision-making, while their offshore team might have a more hierarchical or formal approach. These subtle yet significant cultural nuances can impact how teams interact, make decisions, and solve problems together.

Nearshore outsourcing usually offers a smoother cultural fit, leading to more effective communication and collaboration. This can have a direct positive impact on the speed and quality of your project’s progress and outcomes.

Cost Differences

Winner= Offshore Software Development (But Nearshore isn’t far behind!)

Nearshore Software Development	Offshore Software Development
Nearshore is lower cost than onshore outsourcing. While slightly more expensive than Offshore software development, Nearshore’s convenience and quality are well worth the additional costs.	Generally, Offshore is the lowest cost outsourcing option. This can be beneficial for businesses but can be more difficult for teams to oversee and manage due to time zone differences and cultural barriers.

Companies often choose Nearshore and Offshore development services because they’re a cheaper alternative to hiring or onshore outsourcing.

So you save with both models. But if doing a side by side comparison of the costs, Offshore software development has a slight edge.

Offshore rates, whether for an architect, developer, or QA engineer, are generally lower compared to nearshore. This makes offshore outsourcing an attractive option for businesses looking to maximize their budget.

Here is a breakdown of estimate costs for outsourcing to Nearshore and Offshore partners:

Role	Nearshore	Offshore
Architect	$72 - $96	$47 - $95
Business Analyst	$54 - $68	$31 - $81
Scrum Master	$50 - $79	$44 - $74
UX/UI Designer	$48 - $75	$29 - $71
DevOps	$59 - $82	$29 - $79
Lead Developer	$66 - $82	$41 - $82
Associate Developer	$41 - $53	$21 - $53
Mid Level Developer	$53 - $66	$27 - $65
Senior Developer	$65 - $82	$34 - $76
Associate QA Engineer (Manual)	$34 - $52	$18 - $44
Mid Level QA Engineer (Manual)	$42 - $59	$22 - $59
Senior QA Engineer (Manual)	$53 - $66	$25 - $61
Associate QA Engineer (Automated)	$35 - $55	$22 - $51
Mid Level QA Engineer (Automated)	$48 - $62	$25 - $63
Senior QA Engineer (Automated)	$59 - $72	$29 - $74

But the cost difference between Nearshore and Offshore isn’t as wide as you might think, especially when you factor in the value of easier communication and cultural alignment.

For example, a Nearshore software development team might charge more than an offshore team, but the reduced communication barriers and time zone alignment can lead to more efficient project management.

This efficiency can offset the higher hourly rates by reducing the overall project duration and the potential for costly misunderstandings. Plus you have to look at the value of the software development team you’re getting for the price.

The good news is that no matter which you choose, outsourcing software development offers you lower cost services than you’ll find onshore.

Access to Talent

Winner= Nearshore Software Development

Nearshore Software Development	Offshore Software Development
Tech talent in Latin America is booming, especially in locations like Costa Rica, Colombia, and Peru. Their focus on upskilling makes them an attractive option for less than it costs onshore.	Offshore software development talent can vary drastically but there are pools of talent worth your while if you can find them.

Both Nearshore and Offshore outsourcing opens doors to a global talent pool.

When you go Nearshore, you’re able to tap into the growing software development markets of Latin America. Take Costa Rica as an example—their tech sector is expected to increase by 180.2 million U.S. dollars (+55.05 percent) between 2023 and 2028. As a result, there will be a surge of tech talent in that country and in the wider region.

Offshore options such as India also offer diverse tech talent businesses can tap into.
However, the greater geographic and cultural distance can sometimes pose challenges in aligning this talent with the specific needs and context of a Western-based company.

Largely, your outsourcing success and access to talent come down to the outsourcing partner you choose. The best Nearshore models will have US bases that work with Latin American teams.

At HatchWorks we have our American offices oversee the sourcing and management of Latin American software developers so that we can ensure only the best of the region work on projects and that they’re kept up to date on skills and emerging software trends including the use of generative AI.

Pros and Cons of Nearshore and Offshore Software Development

What’s to gain and what’s at risk when using either nearshore or offshore software development services?

Below we’ve onshore and offshore benefits to look out for as well as potential drawbacks you may face.

Advantages of Nearshore Software Development

There are many reasons why you should consider Nearshore Software Development, but these three are at the core:

Nearshore provides aligned time zones for real time collaboration.
Today, multidisciplinary Agile teams are the norm in software development. The fact that Agile teams are so productive is due, in part, to their foundation in collaboration, iteration, and short feedback loops. Having the day’s work cycle shared is the main requirement for Agile to function in a remote environment. Nearshore development enables that real-time collaboration by being aligned by time zone, not cubicles.
Nearshore expands your talent pool.
Location doesn’t matter, talent does. A large number of technology workers are now available in Latin America, thanks to the region’s extensive technology education program. They are adept at leveraging modern technology and Agile methodologies to integrate seamlessly into a distributed team. The strong cultural affinity between Latin America and the US, along with the region’s English proficiency, makes collaboration even easier.
Nearshore provides you more value for your investment.
There is a severe shortage of talent in the US, and salary demands are at an all-time high. A Nearshore Software Development approach yields better value and a bigger pool of resources. On top of that, the quality of talent results in little to no dropoff in productivity compared to Onshore. Nearshore can be leveraged without investing in a new region, allowing companies to fully leverage the growing software development culture in Latin America.

Need help choosing a Nearshore partner? Check out our article on the Top 9 Nearshore Software Development Companies.

Disadvantages of Nearshore Software Development

Here are the most common disadvantages of using Nearshore Software Development:

Nearshore can be more expensive than Offshore.
Some Offshore countries are able to provide significant cost savings compared to Nearshore. Don’t forget to factor in the cost of communicating and collaborating with teams in a significantly different time zone when Offshoring.
Nearshore developers speak English as a second language.
There are always some language and cultural differences when outsourcing to another country. That said, English language proficiency is growing in Latin America and the cultural differences are less pronounced compared to some Offshore countries.
Nearshore markets are still maturing.
There’s no denying it; there are more Offshore options available. Finding the right Nearshore partner for niche projects may be difficult. But this could be changing. Deel’s 2022 State of Global Hiring Report shows that growth in Latin America is outpacing even APAC. Organizations are looking for more than just software development by moving more product and UI/UX capabilities abroad too.

Want to use Nearshore Software Development and minimize any risks? Check out our proven strategies for mitigating Nearshore Software Development risks.

Projects Best Suited for Nearshore Software Development:

Digital B2B, B2C, and SaaS Solutions
Those requiring real-time collaboration, but not necessarily face-to-face
Those leveraging an Agile approach
Strategic and more ambiguous projects that require real-time discovery and collaboration
Development of new software solutions
Modernization of complex legacy software solutions

Advantages of Offshore Software Development

Offshoring has been popular in the past for a reason. Here are those reasons:

You can save money.
One of the main reasons why organizations choose to outsource is the huge amount of cost savings they get. As you might know, the main reason behind this is the difference in wages between developed and developing countries.
You get access to talent you might not find in-house.
You get access to a wide variety of skill sets that you might not be able to find locally. If you choose to outsource to a country that has a robust software development culture, you’re likely to find a lot of professionals with the skill set that you need.
You can Offshore non-automated processes requiring repetitive tasks.
When you hire developers from another part of the world, collaboration can be difficult. This factor makes Offshore ideal for projects or tasks that DON’T require high levels of collaboration or an Agile development process.

Disadvantages of Offshore Software Development

Here are the most common disadvantages of using Offshore Software Development:

Cultural differences are more pronounced with Offshore.
Communication may be harder due to cultural misalignment as well as time zone issues.
You have limited control and oversight when Offshoring.
You’ll have less control of the project when working with partners in a distant country. This can be a problem if you need to give detailed feedback. You may need to adjust your work or sleep schedule to stay in communication with your Offshore team.
It is harder to travel to Offshore locations.
Europe and Asia are not as accessible as Latin America when it comes to quick flights. If you need to travel to your partner’s office, be prepared for an overnight journey. This is not necessarily the case with Nearshore. A flight from Atlanta to San San José, Costa Rica is quicker than one to San Jose, California.

Want to separate fact from fiction when it comes to outsourcing? Read our article: 8 Outsourcing Myths Debunked: Our Deep Dive into Common Misconceptions

Projects best suited for Offshore software development:

Non-automated processes requiring repetitive tasks
IT support projects
Less strategic ambiguous projects
Projects that don’t require high collaboration and Agile process
Projects not as impacted by high turnover

Choosing Between Nearshore and Offshore: Factors to Consider

If you’re not yet sure which outsourcing model to choose, consider these three factors:

Your Project Requirements

Every project has its unique demands, whether it’s specialized skills, technology stacks, or development methodologies.

It’s crucial to analyze the specifics of your project to determine which outsourcing model offers the expertise and resources best suited to your project’s needs.

Your Budget Constraints

Budget is often a determining factor in outsourcing decisions. While offshore can offer cost benefits, nearshore may provide better value in the long run.

Assessing your financial flexibility and how it aligns with the pricing structures of each model will guide you toward a financially viable choice.

Your Cultural Compatibility

Effective communication and cultural alignment can significantly impact the success of a project. If real-time collaboration and minimal cultural barriers are priorities for your project, nearshore might be the more suitable option.

But if these aspects are less critical compared to cost savings, offshore could be more advantageous.

Reduce Project Development Costs without Compromising on Quality with Nearshore Software Development

HatchWorks is a US-based Nearshore software development partner that combines local, high-touch service with the affordability and scale of Nearshore outsourcing.

To leverage the talent of Latin America while reducing costs, contact us today.

Getting Started with HatchWorks Is Easy

HatchWorks will work with you to perform a free initial assessment of the team composition you need based on your current team structure. No matter what phase you are at in your software solution journey, HatchWorks can help you accelerate your path to success.

The post Nearshore vs Offshore in 2024: A Detailed Comparison of Outsourcing Models appeared first on HatchWorks.

In-House Software Development vs Outsourcing: A Comprehensive Guide for 2024

Melissa Malec — Mon, 08 Jan 2024 14:14:18 +0000

Your business has software needs. The question is…do you take the time to hire an in-house development team or outsource the work to an already assembled team of experts?

This 2024 guide gets you to your answer. In it, we compare these two models side by side looking at their cost, quality, speed and more. Plus, there are four simple steps at the end to help you make your choice.

Read on to find out if an outsourced software development model suits your business needs or if you’re better off building a team in-house.

Or maybe your answer lies somewhere in the middle? There’s only one way to find out…

What is In-House Software Development?

Simply put, in-house software development is when you have an internal team managing and building software for your business.

It can be any size team, from a one-person band to a 20-piece orchestra of talented developers.

Who chooses in-house software development?

Usually, it’s:

Large corporations with specific needs
Tech companies with ongoing development projects
Businesses prioritizing tight control over their tech

For example a SaaS business is likely to employ developers because the software is the heart of the product and will need constant tuning and adapting as users provide feedback and bugs pop up over its lifetime.

Benefits of In-House Software Development

One of the key benefits of in-house development is control.

You’re the boss of the project from start to finish. Your software development team is right there with you, fully integrated into your company’s culture and goals.

This close-knit environment fosters a deep understanding of your project’s unique needs in a way the average software development company can’t.

And ultimately, investing in an in-house team is a long-term play.

You’re intentionally collecting and fostering talent that knows your business inside out. Over time, this can lead to more efficient, tailored software solutions that really hit the mark.

Helpful hint: Having an in-house team doesn’t automatically rule out an outsourcing model. You can use an outsourced team and an internal software development team for different projects or integrate outsourced developers into your internal team to enhance capabilities.

And What Does Outsourcing Look Like in Software Development?

As opposed to in-house, outsourcing software development is when you hire an external company, team, or individual to develop software for your business.

There are three main models of outsourcing for software development:

Onshore software development (hiring a local company, usually a boutique agency)
Offshore software development (hiring cheap labor from far off lands such as Asia)
Nearshore software development (hiring teams from neighboring countries such as those in Latin America)

And within those models are types of outsourcing.

These include:

Staff augmentation
Dedicated teams
Outcome based projects (a rare offering from custom software development companies)

At HatchWorks, we offer all three of the above types of outsourcing through our Nearshore model.

Nearshore	Offshore	Onshore
Outsourcing to neighboring countries with similar time zones.	Outsourcing to distant countries with significant time zone differences.	Outsourcing within the same country.
Often cost-effective and allows for easy collaboration.	Often cost-effective but can present difficulties in communication.	Often costly but avoids cultural differences and language barriers.
Central and South America	Africa, Europe, and Asia	United States and Canada

Even companies with in-house development teams may outsource certain projects.

Here are some examples of businesses that would outsource software development:

Startups needing to ramp up quickly without the overhead of a full team
Small to medium-sized businesses looking for specialized skills not available in-house
Large corporations handling overflow work or specific projects outside their core expertise

Benefits of Outsourcing Software Development

Outsourcing, when done with a reliable software development provider, gives you fast access to top talent.

And some outsourcing models, like Nearshore Development, are cost-effective. They offer the benefits of outsourcing, like reduced labor costs, while minimizing issues like time zone differences.

It’s a smart way to get quality work done within a reasonable budget.

Helpful hint: Outsource the software development work your in-house team doesn’t have the time or skills to complete. This can be all of a software development project or a portion of it.

Comparing the Two Side by Side

Let’s look at these two approaches to software development to see the strengths and weaknesses of each when it comes to:

Cost
Quality & control
Speed & efficiency
Scalability & flexibility
Access to talent & expertise

Each category starts with our winner (marked with a gold medal). Then you can read into each one to understand why and come to your own conclusions.

Cost Differences

We give first place to outsourcing, and Nearshore outsourcing specifically. It gives you access to top talent without spending time and money recruiting and hiring developers.

In-House Software Development Costs:

You’re looking at salaries, benefits, workspace, and ongoing training for your team.

According to Indeed, the average salary of an in-house developer in the US is $117,845.

Multiply that by the number of developers you need and be sure to add the costs associated with hiring, and the costs of learning and development.

It’s a significant upfront and ongoing investment, but it can pay off in the long term because you build a team that deeply understands your business and where expenses stay the same regardless of the project they’re working on.

Outsourcing Costs:

Outsourcing is more cost-effective in the short term. You pay for the service without the overheads of full-time employees.

Costs vary widely depending on the location and expertise of the outsourced development team. That means you can find something almost no matter what your budget is.

Nearshore outsourcing offers cost savings without significant time zone challenges and has talented developers at the ready.

At HatchWorks, we take a consultative approach, really getting to know your business so that we can operate with the same care, knowledge, and diligence as an in-house team while saving you the hassle of hiring one.

Quality and Control Differences

Coming out on top of quality and control is in-house development teams. Why? Because not only do you have more control over what work is done and when, you also have more control over the quality itself.

In-House Software Development Quality and Control:

With an in-house team, you have direct oversight of the entire development process.

This close proximity allows for a hands-on approach to quality control. You can quickly address issues, make adjustments, and ensure that the final product aligns closely with your vision and standards.

The result is often a high-quality product that seamlessly integrates with your existing systems and business processes.

Outsourcing Quality and Control:

Outsourcing, while offering access to a wide range of expertise, can present challenges in maintaining the same level of quality control.

Communication barriers, cultural differences, and time zone mismatches can complicate project management.

However, with a reliable outsourcing partner and effective communication tools, these challenges can be mitigated.

The key is to establish clear expectations, maintain regular communication, and choose a partner with a proven track record of delivering quality work. This is made easier with software development companies who use a Nearshore outsourcing model because they’ll work in the same timezone as you and can have instant communication.

Speed and Efficiency Differences

This category goes to outsourcing. Having a team of specialists focused on one thing and one thing only keeps things moving quickly.

In-House Software Development Speed and Efficiency:

Having your team on-site means communication is quick.

Decisions and changes can happen fast. This can lead to a shorter time-to-market, especially for projects that need close collaboration or have many moving parts.

However, if your in-house team is juggling multiple projects or lacks certain expertise, this could slow things down.

Outsourcing Speed and Efficiency:

Outsourcing can be a game-changer for speed, especially if you partner with a team that’s ready to hit the ground running.

They bring specialized skills and can focus solely on your project, potentially speeding up development.

But, remember, if you’re dealing with time zone differences or communication gaps, this can impact the pace.

Scalability and Flexibility Differences

Outsourcing wins here too. It’s always flexible and scalable (with the right partner). And it does both with relative ease.

In-House Software Development Scalability and Flexibility:

Scaling an in-house team can be a slow process. It involves hiring and training new staff, which takes time and resources.

However, once scaled, an in-house team offers great flexibility.

They can quickly adapt to new technologies or changes in project scope, as they are fully integrated into your company’s ecosystem and understand its evolving needs.

Outsourcing Scalability and Flexibility:

Outsourcing shines in scalability.

You can quickly add more resources or cut back as needed without the complexities of hiring or layoffs. This makes it easier to manage workloads and adapt to changing project sizes.

However, while outsourced teams can bring in new technologies and skills swiftly, aligning them with your software development project’s specific needs and making changes in direction might require more coordination and time, especially if dealing with external teams in different time zones.

Access to Talent and Expertise Differences

We have to give this one to outsourcing. Companies are struggling to hire tech talent. With outsourcing you can get access to proven talent a lot sooner than the months it takes to find and hire.

In-House Software Development Access to Talent and Expertise:

Building an in-house team means you’re limited to the current talent pool.

This can be a challenge, especially in competitive industries (and aren’t they all?).

Especially when you consider 53% of companies struggle to recruit in-house developers because they lack the skills desired. That can lead to months wasted looking for talent that never comes.

While you can cultivate a team with a deep understanding of your business, finding and retaining top talent with specialized skills can be difficult and costly.

Outsourcing Access to Talent and Expertise:

Outsourcing on the other hand opens up a world of global talent. You’re not restricted by geography; you can find the best fit for your project, whether they’re across the country or on a different continent.

This access to a diverse pool of skilled professionals means you can easily find experts for niche or specialized areas of your project. And if needed you can find software development providers who are harnessing generative AI tools to enhance their software development.

The challenge is in making sure these external experts align with your project goals and company culture, but the breadth of talent available often outweighs this hurdle.

How to Choose the Software Development Model That’s Right for Your Business

So do you build an in-house team, look for external help, or look to do both for different projects?

Your choice largely depends on the:

needs of your business right now and in the future
the goals you want to achieve and what you need to achieve them
and if you think you can replicate these models successfully as others have.

1. Assess Your Business Needs

Start by evaluating your business needs and project requirements.

Consider the scope of your project, the skills required, and the timeline. Does your project require specific expertise that your current team lacks? How quickly do you need to move from concept to launch?

Aligning your business strategy with your development approach is essential.

If your business values tight control over projects and has the resources to invest in a long-term team, in-house development might be the way to go.

On the other hand, if you need to scale quickly or require specialized skills for a short-term project, outsourcing could be more effective.

2. Consider Long-Term Goals and Objectives

Think about where you see your business in the next five to ten years.

Are you planning to expand into new markets? Will you need to innovate rapidly to stay ahead of the competition?

In-house teams can evolve with your business, offering stability and consistent alignment with your long-term vision.

However, outsourcing offers the agility to adapt to changing market demands and can be a powerful tool for businesses looking to scale or innovate quickly.

3. Take Inspiration from Real-World In-House Development and Outsourcing Examples

Real-world examples can offer valuable insights.

A tech startup you know might begin with outsourced development to quickly launch their product, then transition to an in-house team as they grow.

Another business might use nearshore software development for a specific project to benefit from cost savings and time zone alignment, while maintaining a high level of quality and control.

Each approach has its own set of challenges and lessons learned.

For example, a business that outsourced might have faced communication hurdles but benefited from accessing a wide range of skills.

On the other hand, a company with in-house development might have struggled with the initial setup but gained from having a dedicated team aligned with their business culture.

Take stock of these examples whether you know the company personally or read about them online and see if you see yourself in them.

Need inspiration? Check out our case studies to see examples of companies who flourished with Nearshore Software Development on side.

Finally, Make Your Decision

Now that you’ve taken stock of your business needs, know your goals, and have proven use cases of others in similar situations you can decide whether you’ll build an in-house development team or outsource all or some of the projects you have.

This involves weighing the pros and cons of each approach in the context of your business’s unique situation.

Here are some key factors to consider:

Budget Constraints: Determine how much you’re willing to invest. Remember, in-house development often requires a higher upfront investment, while outsourcing can be more variable but potentially less costly in the short term.
Project Complexity and Duration: For complex, long-term projects, an in-house team might offer better consistency and understanding. Short-term or highly specialized projects might benefit more from outsourcing.
Control and Communication: If having direct control and immediate communication is vital for your project, in-house development might be preferable. If you’re comfortable managing remote teams and can handle potential communication challenges, outsourcing could work well.
Talent Availability: Consider the availability of the required skills in your local market versus the global talent pool accessible through outsourcing.
Risk Tolerance: Assess your tolerance for risks associated with each model, such as the potential for communication issues with outsourcing or the challenges of scaling an in-house team.

In the end, the decision should align with your business values, goals, and the specific needs of the project at hand.

It’s also important to remember this isn’t a one-size-fits-all choice; some businesses successfully use a hybrid model, leveraging the strengths of both in-house and outsourced development.

If you’re going the outsource route here are some resources to help you choose:

Outsourcing? Go Nearshore with HatchWorks

Or you could jump straight to outsourcing your software development work to HatchWorks.

HatchWorks is a US based Nearshore Software Development provider with top talent distributed across LatAm.

We combine local, high-touch service with the affordability and scale of Nearshore Development. And we operate as a true partner not just a service provider so that we feel like an extension of your business not a separate one.

Hatchworks: Your US-Based Nearshore Software Development Partner

HatchWorks is a US-based Nearshore software development partner that combines local solutions practice with the affordability and scale of Nearshore outsourcing, all in your time zone.

Start your project in as little as two weeks and cut your software development costs in half.

The post In-House Software Development vs Outsourcing: A Comprehensive Guide for 2024 appeared first on HatchWorks.

Insights into Nearshoring: The Trend Changing How the US Does Business

Melissa Malec — Wed, 06 Dec 2023 15:23:16 +0000

Every once and a while a trend emerges which transforms the world. It can be as simple as the introduction of jeans as a wardrobe staple to the dramatic automation of machines in the Industrial Revolution.

In recent years, nearshoring has fallen somewhere in between with the US taking advantage of nearshore services, especially in the tech space.

But what is it? Why is it so popular? And what’s its future look like?

We go into all of that below, looking through the lens of Nearshore Software Development.

What is Nearshoring? A Definition and Background

Nearshoring is an outsourcing model where businesses use companies in neighboring countries to complete work they can’t or don’t want to do in-house (due to lack of time, resources, or expertise).

It’s a cost effective alternative to using onshore freelancers and agencies and a practical alternative to offshore teams because a team or individual in a nearby country is able to work in the same or similar timezone.

Nearshore	Offshore	Onshore
Outsourcing to neighboring countries with similar time zones.	Outsourcing to distant countries with significant time zone differences.	Outsourcing within the same country.
Often cost-effective and allows for easy collaboration.	Often cost-effective but can present difficulties in communication.	Often costly but avoids cultural differences and language barriers.
Central and South America	Africa, Europe, and Asia	United States and Canada

For US-based companies, their nearshore options are Canada or Latin America (LatAm) but it’s the latter which offers the biggest cost benefit.

Nearshoring isn’t a new concept but it has increased in popularity in recent years. In a 2022 article, Bloomberg reports 80% of companies in North America are actively considering nearshoring.

Popular Nearshore Locations for US-Based Businesses

Latin America offers a variety of nearshore locations for U.S. businesses. The region as a whole is rising in the tech world, but some countries have become favorites for nearshore outsourcing due to their robust tech infrastructure and talent pool. Here’s a quick look at some top nearshore locations:

Costa Rica: With its emphasis on education and a stable political scene, Costa Rica is renowned for high-quality software development. It’s a smaller market, but its specialized tech talent is a major draw.
Colombia: Growing as a tech leader, Colombia’s IT sector is booming. Cities like Bogotá and Medellín are becoming hotspots for tech innovation, drawing in businesses for nearshore collaborations.
Brazil: Brazil’s mature tech industry offers a comprehensive range of services from software development to advanced data analytics. Its sizable talent pool makes it a go-to for robust IT solutions.
Argentina: Celebrated for its high-caliber tech education, Argentina produces creative and innovative tech professionals. Buenos Aires, in particular, is a magnet for tech activity.
Mexico: With key tech hubs like Guadalajara, Mexico combines technical expertise with cultural proximity to the U.S. This makes for easy collaboration and has positioned Mexico as a favored nearshore choice.

Further reading: Top Latin American Countries for Nearshore Software Development

The Rise of Nearshore Software Development

Within the broader trend toward nearshore, the tech industry is leading the charge with Nearshore Software Development.

This trend is fueled by the inherent need for collaboration and constant communication in software projects between internal teams and external partners.

And it’s been made possible by the growth of the tech industry in Latin America.

Don’t believe us? IDL Labs projects Latin American, and Caribbean tech startups are set to reach $2 trillion in value by 2030 and this is after their industry has grown from an estimated $7 billion in 2010 to $221 billion in 2020.

And it’s reported software developers from Latin America are among the top-rated globally. Businesses in the US can now use them to build quality software at a fraction of the cost it would cost to hire an onshore team.

Why Businesses Choose Nearshoring: Key Advantages

In the past, offshore has been the outsourcing model of choice. But over time, cracks in the model have revealed themselves.

Offshoring can bring with it:

language barriers
opposing work cultures
difficulties in collaboration due to time zone differences,
and unreliable English proficiency.

And it’s those areas where nearshore shines.

US-based companies seek nearshore talent in Latin America because of a close workday overlap, strong cultural fit, and high English language proficiency.

Source: Accelerance

Below we’ve outlined the top 4 advantages of nearshoring in more detail:

It’s cost effective and convenient

According to Deloitte, 59% of companies choose nearshoring for its cost benefits.

This isn’t surprising given nearshoring is more economical than hiring locally (either in-house tech talent or outsourcing to an onshore boutique agency).

In fact, the average cost of hiring a developer in the US is $159,932. That figure includes resources spent recruiting talent in addition to the salary but doesn’t include benefits or other costs.

And compared to offshoring, nearshoring is just as cost-effective while being more conveniently located.

So it’s no wonder American based businesses are turning to LatAm options.

There are fewer cultural differences

For US companies, working with teams in Latin America is like working with your neighbor. There’s an unspoken commonality between us from the Netflix shows we watch to a history of colonization by European powers.

From these shared roots and interests comes an understanding that smooths out collaboration between in-house teams and outsourced ones.

Plus, the widespread English fluency in Latin America means communication is clear and straightforward, making projects run more smoothly.

Latin America offers access to top talent

We previously mentioned that tech talent in LatAm is among the top rated globally.

When you opt for nearshoring outsourcing, you open the door to this pool of talent.

These experts bring new ideas and advanced skills to the table, enhancing the quality of your projects significantly.

Many US software teams will use staff augmentation to increase capabilities and integrate an outsourced partner into their business operations.

Nearshoring is scalable and flexible

One of the most attractive features of nearshoring is its scalability, especially for businesses looking to adapt and grow in a competitive market.

Nearshoring lets you scale your team up or down as needed. Have a big project that requires expertise you don’t have or simply needs more hands behind it? Nearshoring can easily meet those needs. Want to scale back once it’s done? No problem.

That’s not something you can do with an in-house team.

And thanks to Nearshore’s proximity, scaling up doesn’t mean losing control or oversight. You can keep a close eye on your project’s progress, ensuring quality isn’t sacrificed for speed.

Challenges and Considerations in Nearshoring

Nearshoring offers many benefits, but it’s not without its challenges.

One of the main concerns is geopolitical risk. Countries may experience unrest or economic upheaval, potentially disrupting projects.

HatchWorks, as a Nearshore Software Development partner addresses this by having a U.S.-based headquarters and utilizing developers from various Latin American countries. This diversity ensures that if one country faces issues, your project can continue smoothly with minimal interruptions, thanks to the support from other regions.

Another hurdle can be language barriers. While many Latin American software developers are proficient in English, it’s often their second language. This might lead to occasional misunderstandings or communication gaps.

Again, HatchWork’s US presence reduces this risk because you’ll have a local team managing the process, selecting the right developers, and ensuring it all goes smoothly.

Finally, security risks, including data breaches or intellectual property theft, are critical concerns in any outsourcing model.

Strategies to Overcome These Challenges

To tackle these challenges, here are some strategies for an effective outsourcing strategy:

Diversify Talent Sources: Similar to HatchWorks’ model, diversifying the countries you source talent from can mitigate risks associated with reliance on a single region.
Invest in Language and Cultural Training: Encourage cross-cultural training and language proficiency courses to bridge any communication gaps.
Stay Informed on Regulations: Keep up-to-date with the legal and regulatory environments of the countries you’re working with. This knowledge can help navigate and comply with local requirements and keep your data secure.
Build Strong Local Partnerships: Establish strong relationships with local partners like HatchWorks who understand the regional nuances and can offer valuable insights and support.

Further reading: Proven Strategies for Mitigating Nearshore Software Development Risks

The Future of Nearshoring

Outsourcing solutions have traditionally shifted manual work that required little expertise. But nearshoring is continually tapping into the knowledge of our next door neighbors.

Businesses are recognizing the intellectual capacity within nearshore regions. This means a growing demand for specialized skills and higher education levels in these markets. Nearshore professionals won’t just be executing tasks; they’ll be contributing essential expertise and innovative solutions.

The nature of nearshoring relationships is also shifting.

We’re moving away from transactional outsourcing to more integrated, partnership-based collaborations. This new approach focuses on long-term value creation and mutual growth. It’s about building relationships that are not just beneficial but also responsible, adhering to global corporate responsibility standards.

Our unique approach to fusing US expertise and Latin American scalability and affordability is what sets us apart—and it’s proving to be a winning formula.

Brandon Powell, CEO of HatchWorks

The Impact of AI on Nearshore Software Development

AI has rapidly developed in 2023 and it will continue to do so for the foreseeable future.

Here’s how AI is impacting Nearshore Software Development:

Automated Development: AI can take on or assist in software development tasks. This means nearshore teams can deliver more, faster. It’s like turbocharging the development process, making ‘build’ strategies more efficient.
Innovation at the Forefront: AI’s ability to generate creative solutions opens new doors for innovation in nearshoring. Teams can explore unique features and functionalities, pushing the boundaries of what’s possible.
Continuous Improvement: AI doesn’t just build; it learns and improves. This means software developed via nearshoring can continually evolve, staying ahead of the curve.

But it’s not all smooth sailing. AI, especially tools like ChatGPT, can have limitations, like inaccurate data generation.

Ethical and security considerations are also crucial. As Matt Paige, VP of Marketing and Strategy at HatchWorks, points out, the decision between using off-the-shelf AI solutions and building proprietary ones involves weighing privacy and data security risks.

If you’re looking into nearshoring something other than software development, then the impact is still the same, it just will be applied to different business processes.

How Businesses Can Prepare for These Changes

To adapt to these changes, businesses should focus on building strong, collaborative relationships with nearshore partners.

They should also invest in training and technology to harness the full potential of AI and other emerging tech trends. By doing so, companies can ensure they are well-positioned to leverage the evolving landscape of nearshoring.

Reap the Rewards of Nearshore Software Development with HatchWorks

At HatchWorks, we blend high-touch, local service with the affordability and efficiency of nearshore outsourcing. Our teams, boasting a 98.5% retention rate and fluent English skills, ensure your projects run without interruptions or delays.
We’re a trusted nearshore partner for businesses that need quality software development and a solution that scales as they do.

Check out past projects we’ve worked on and the outcomes those businesses have gone on to achieve here.

→ If you want to see how nearshoring can expedite your development at a fraction of the cost, contact HatchWorks today. ←

Hatchworks: Your US-Based Nearshore Software Development Partner

HatchWorks is a US-based Nearshore software development partner that combines local solutions practice with the affordability and scale of Nearshore outsourcing, all in your time zone.

Start your project in as little as two weeks and cut your software development costs in half.

The post Insights into Nearshoring: The Trend Changing How the US Does Business appeared first on HatchWorks.

How to Choose a Custom Software Development Company: 2024 Checklist & Guide

Melissa Malec — Tue, 28 Nov 2023 20:10:18 +0000

You’re wondering how to choose a software development company. A daunting task when you consider just how many options are on the market.

Do you go offshore and risk quality?

Do you go to a boutique agency that will never be able to scale as your projects do?

Do you look to a digital transformation giant and pay an astronomical price?

Or do you go nearshore and see if the rumors about its cost-effectiveness and top tier talent are true?

And even once that choice is made, how do you find the one software development firm that’s able to not only speak code but also understand your unique needs, and how you want to meet them? That attention to detail should extend to the needs and desires of your customer as well.

This guide and checklist will help.

All you need to do is follow the 8 steps below and measure each software development company you’re considering against the downloadable checklist at the end.
Because a critical decision like this deserves a proven process.

In every section, you’ll see a pin (). The pin is there to signal a key learning. If that’s the only thing you read, you’ll still see value from the piece.

Step 1. Understand Your Software Development Needs

Figure out what you’re building, if it’s the right project to outsource, the objectives you’re reaching for, and the timeline you’ll follow.

When you’re on the hunt for a software development company, you need clarity over the project you’re outsourcing, the expectations you’ll set, and the objective you’re trying to reach.

So, the first step is to get a clear picture of what you’re developing.

Are you building a:

sleek web platform
dynamic mobile app
custom software that doesn’t fit the usual mold?

Knowing this will direct the type of software development company you look for.

Let’s talk goals. What’s the business problem you’re aiming to solve with this software?

Knowing this helps you communicate your vision and ensures everyone’s rowing in the same direction, internally and externally.

Another key consideration is if this is the right project to outsource or if you’d be better off building it with an internal team, and maybe outsourcing something else on your product roadmap.

Outsourcing can give you access to specialists who live and breathe software development, which can be especially useful when your project is complex or outside your team’s core skills. So it’s important you don’t choose a project an internal team could or should handle.

We have an entire guide on how to determine if you should build or buy software. Check it out if that’s a concern.

If outsourcing, come into your search with an idea of a timeline. When do you need it done and what project milestones are important?

We recommend documenting this all in one place so that you can run through it with your shortlist of software developers at a later point.

Step 2. Think about Budget, Time Zones, and Language

Where your software development company works from has an impact on cost and is just as important as the capabilities they have.

Sure, you need a team with the right skills. But you also need the experience of working with them to be seamless and affordable.

And if you don’t want to spend an arm and a leg on a boutique software development company but you want the same level of quality, expertise, and service then you should look to Nearshore Software Development providers.

For the US this means looking to our neighbors in Latin America (LATAM).

It also means they’ll be in a similar time zone to you. Aligning time zones means your day-to-day operations can sync up nicely for more effective collaboration, communication, and problem solving.

That clear, continuous dialogue is the cornerstone of any successful project. And when language barriers are low, clarity and productivity are high.

So given that, how important is it to you that your developers speak English fluently? We’d argue, very. LATAM developers are highly educated not just in software but in English.

Out of Central American countries, Costa Rica is the most proficient in English but generally speaking, Central and South America collectively has high levels of proficiency.

How Latin American Nearshore Software Development Reduces Costs

Nearshore software development in Latin America offers a sweet spot for US businesses looking to cut costs without compromising on quality. Plus, Latin America is rich with tech talent. Countries like Brazil, Mexico, and Argentina are brimming with skilled developers who are up-to-date with the latest tech trends. At HatchWorks we make sure our LatAm based developers stay on top of emerging technologies and trends by offering them continuous development opportunities. They get:

Monthly, employee-led lunch & learns
Access to Communities of Interest (COIN)
A Udemy subscription
$2k/year to spend on relevant learning and development

This guarantees you get onshore boutique quality development work (or better) without paying boutique quality prices.

Feature	Nearshore (LatAm)	Offshore (Asia)	Onshore (local boutique agencies)
Costs by hourly rates	$35 - $70	$20 - $45	$80 - $140
Pros	Cost-effective Easy collaboration (same time zone) Top tech talent	Cost-effective	Top tech talent Easy to collaborate with due to proximity
Cons	May have minor cultural differences	Different time zones can negatively impact communication and progress May lack English proficiency	Doesn’t scale well

Step 3. Assemble a List of Potential Software Development Companies

Ask your network and look to platforms and sites that showcase software development companies to come up with a list of potential software development providers.

You know your project needs and goals, so it’s time to start looking for a software development company that can fulfill them.

Here’s how to make the process more manageable:

Ask peers and colleagues for recommendations. Who are the best custom software development companies they’ve ever worked with? Who should you avoid?
Use platforms like Clutch or GoodFirms to find custom software development companies. These sites provide rankings and reviews for thousands of software development companies. Odds are, the right software development company is on there.
LinkedIn can be a goldmine. Look for companies that share insightful content and engage with their community.
Attend webinars, virtual conferences, or local meetups. These can double as networking events that lead you to your next development partner.
See who’s building the software you admire. Sometimes the best way to find talent is to look at who’s already excelling in your field.

Remember, this list is your starting point. You’ll narrow it down as you align potential partners with your specific needs.

Need a little more guidance on hiring development teams? Check out our article: Hiring a Development Team – Everything You Need to Know.

Step 4. Narrow that List Down to Software Companies with Agile Frameworks and Robust Methods

Your ability to get great results within budget and within your ideal timeline largely depends on if your software development provider follows an Agile framework and applies robust methods.

You need a team of developers who can adapt to changing needs and who offer advice on the best way forward.

So as you’re sifting through your list of potential software development partners, focus on those who embrace Agile frameworks and use robust methods. And cull the rest.

Here’s why:

Agile for efficiency and scalability: Agile frameworks are all about being nimble and responsive. They allow for rapid iteration and continuous feedback, which can significantly reduce time-to-market. In an industry where speed is often as crucial as quality, this approach can be a game-changer.
Robust methods for consistent quality: Look for companies that have robust methods in place, ensuring that every piece of code, every feature, and every update meets a high standard of quality. This means having a systematic approach to development, from code reviews to testing protocols, ensuring that quality is not just a one-time achievement but a continuous commitment.

At HatchWorks, we created the Built Right method. It guarantees we stay agile in our approach and follow proven frameworks we know will work.

And that translates to projects that are always on time, on budget, and high quality.

What is the
Built Right Method?

Build software stress-free and on budget with our tried-and-true method that increases speed to value and reduces cost throughout the software development lifecycle.

Specialized, flexible frameworks
AI-enhanced development
Accelerators and automation tech
Continuous value delivery
Hyper-enabled, next-gen teams

Choosing a software development company isn’t just about who can build your solution; it’s about who can build it right, with an eye on the future and a foundation in proven, efficient methodologies.

The Built Right Method in Action: A Case Study

HatchWorks’ collaboration with a leading healthcare company, AdventHeatlh showcases the power of the Built Right Method in transforming project outcomes while staying on budget and on time.

This particular project was in four parts with a main focus on transitioning their system from a centralized to a decentralized model within a tight three-month deadline.

Another was the implementation of an electronic medical record system, crucial for 80% of hospitals in the US. And despite AdventHealth being behind schedule by 15% just three weeks before the go-live date, HatchWorks’ program manager stepped in to help them get back on schedule within one week.

At the end of the project, AdventHealth’s Director of Program Management said,

HatchWorks was a great partner. They always met the deliverable dates that I gave them. They made sure that we stayed within our budget, and they were flexible in working with us.”

Step 5. See How Each Software Company Approaches AI

Narrow your list of providers even further by seeing if they have an AI-enabled software development team, or as we at HatchWorks call them, ‘hyper-enabled teams’.

Now that your list of potential software development partners is getting smaller, you can get closer to your ideal match by judging how each company handles, or doesn’t handle, AI.

You’ll want to pay special attention to how they integrate AI into their development process. This integration is key to unlocking new levels of efficiency and innovation.

Read our article on Generative AI Use Case Trends Across Industries: A Strategic Report to learn more.

AI streamlines complex tasks, automates repetitive processes, and brings a level of precision that’s hard to achieve manually. This leads to a significant reduction in development time and costs.

With AI, teams can focus on creative problem-solving and innovation while accelerating delivery.

In fact, statistics show developers are 55% faster with AI assistance.

This is good for software development companies and good for the clients that use them.

Look at your list. Is there anyone who isn’t actively talking about how they use AI? That’s a red flag.

Step 6. Consider Their Track Record through Testimonials, Case Studies, and Reviews

A company’s past performance is often indicative of what you can expect for your project. So, take the time to scrutinize their track record thoroughly.

When you go to buy something online one of the first things you do before purchasing is look at the reviews, right?

Always do the same when shopping for a custom software development company.

Look into testimonials they have on their website, case studies they showcase, and reviews from third party sites like Clutch.

Here’s what to focus on:

Testimonials and reviews: Look beyond the surface praise. Seek testimonials that speak to specific strengths, such as problem-solving abilities, adherence to deadlines, and communication skills. Reviews should give you a sense of their reliability and the quality of their work.
Case studies: Dive into their case studies. They provide context to their achievements. What challenges did they face? How did they overcome them? What were the tangible results? This analysis can reveal a lot about their approach and effectiveness.
Third-party reviews: Platforms like Clutch or Trustpilot offer unbiased opinions. These reviews are often more detailed and can provide a clearer picture of what it’s like to work with the company.

Make notes as you go through them next to the names of each potential software development partner. These notes will help you make the final choice later on. At this point, you may even feel you know which company you’ll go for.

But there’s one more key step to follow before you make your choice.

Step 7. Speak to Each Software Company on Your Shortlist 1-1

Your interviews with each potential software development vendor allows you to get a glimpse into what it would be like to work with them on a regular basis.

Your shortlist needs to get shorter still. And this next phase of finding a competent, focused software development partner requires you speak to your remaining few contenders.

To make sure these conversations reveal what you need them to so that you can make your final choice you should ask the right questions to see if there’s a cultural fit, ensure they really do have the focus and skills you need, as well as uncover if they feel like a true partner in this project.

When you have your 1-1 call, be sure to ask about their:

experience with projects similar to yours
approach to tackling challenges, and how they handle changes in scope
project management tools and communication practices
technical competencies
examples of their problem-solving in action
use of AI

These conversations are pivotal in determining which company is the right fit for your project, not just in capability but in collaboration and shared vision.

Step 8: Making Your Decision (+ a Foolproof Checklist)

Review the notes you’ve made on your final contenders for software development and see who lines up best. Use the checklist as you go.

You’ve understood your software needs, thought about the advantage nearshore development can have, assembled a long list, shortened that list off the back of due diligence, and spoken to your top choices.

And now it’s time to make your choice.

While the 7 steps above have ensured you know exactly how to choose a software development company, this checklist consolidates those steps and provides additional subtasks to help you arrive at the right decision.

Want this checklist for yourself? Download an editable version here.

The Right Choice: HatchWorks Nearshore Software Development

Who you choose to work on your next development project really does matter.

Because with the right software development partner, your project will go beyond expectations.

HatchWorks is a US-based Nearshore Software Development provider that helps competitive businesses like yours build software that gives their company a competitive edge.

Want to bring HatchWorks to the top of your list and choose us as your go-to custom software development company?

We can get your project off the ground in 2 weeks time with the best talent LATAM has to offer.

Hatchworks: Your US-Based Nearshore Software Development Partner

HatchWorks is a US-based Nearshore software development partner that combines local solutions practice with the affordability and scale of Nearshore outsourcing, all in your time zone.

Start your project in as little as two weeks and cut your software development costs in half.

The post How to Choose a Custom Software Development Company: 2024 Checklist & Guide appeared first on HatchWorks.

Proven Strategies for Mitigating Nearshore Software Development Risks

Melissa Malec — Fri, 10 Nov 2023 17:07:18 +0000

You’ve heard of Nearshore Software Development, the outsourcing model that balances cost, convenience, and accessibility. And you think it could be how you build your next software project.

Yet, whispers of potential pitfalls are holding you back: communication breakdowns, cultural clashes, quality inconsistencies… the list goes on.

So now you want to know if you can mitigate these Nearshore Software Development risks and only reap the rewards.

With the right insights, partners, and strategies, you absolutely can.

Read on for our breakdown of the 4 risks you face when using Nearshore Development and 5 practical ways you can avoid them.

But First, What is Nearshore Software Development?

You may know this answer already (and if you do, feel free to scroll on down to the next section) but it’s always helpful to get everyone on the same page.

Nearshore Software Development is when a company outsources development work to a team that works in a country that is geographically close and thus, timezone friendly.

For example, a company based in Atlanta, Georgia that outsources to Costa Rica.

This outsourcing model combines the benefits of Onshore and Offshore software development while avoiding their pitfalls. Translation? It’s both cost-effective and convenient.

Here is a side by side comparison of the three models:

Nearshore	Offshore	Onshore
Outsourcing to neighboring countries with similar time zones.	Outsourcing to distant countries with significant time zone differences.	Outsourcing within the same country.
Often cost-effective and allows for easy collaboration.	Often cost-effective but can present difficulties in communication.	Often costly but avoids cultural differences and language barriers.
Central and South America	Africa, Europe, and Asia	United States and Canada

Want to learn even more about Nearshore Development? Check out our comprehensive 2023 guide.

3 Reasons Companies Choose Nearshore Software Development

Before we get into the risks and how you can mitigate them, let’s first look at the three core benefits of Nearshore Development.

1. Proximity and Similar Time Zones Facilitate Better Communication and Collaboration

Being geographically close and operating within similar time zones means fewer communication delays.

Teams can collaborate in real-time, ensuring that projects move forward seamlessly and when the odd misunderstanding does happen, they’re promptly addressed.

2. Cost-Effective Alternative to Boutique Agencies

While Onshore development might offer the advantage of cultural and linguistic alignment, it often comes at a premium cost.

Nearshore Development, on the other hand, is a cost-effective alternative. And if you choose a top provider, you won’t sacrifice quality of work or quality of communication.

3. Access to a Diverse and Skilled Talent Pool

Did you know that in 2021 53% of companies struggle to recruit in-house developers? And the reason? The developers didn’t have the skills the business needed.

Nearshore regions often boast a rich pool of tech talent. Companies can tap into this diverse set of skills, ensuring they have the right expertise for their projects without the constraints of local talent shortages.

Take the developers in Latin America that HatchWorks has. We take time to upskill them across 50+ technologies so that no matter the client, we have the exact talent they need.

All of our Nearshore Developers have access to:

Monthly, employee-led lunch & learns
Communities of Interest (COIN)
A Udemy subscription
$2k year to spend on relevant learning and development

What are the Risks of Using Nearshore Software Development?

As with any business endeavor, you need to know what challenges come with hiring Nearshore Development teams. Because when you know what can go wrong, you can take steps to avoid them—and if needed, overcome them.

Here are the primary risks Nearshore outsourcing might bring:

Communication and cultural risks
Quality Risks
Security Risks
Geopolitical Risks

Communication, Cultural Differences, and Cultural Risks

Every country has its unique work culture, and these differences can sometimes lead to misunderstandings.

For instance, a developer in Colombia might interpret feedback differently than a project manager in the U.S. due to cultural nuances. Or, there might be instances where holidays and work hours differ, causing unexpected delays.

Quality Risks

Ensuring consistent software quality across borders can be challenging. For example, a Nearshore team might be using a different version of a software tool or might not be familiar with specific coding standards that the in-house team follows.

This can lead to discrepancies in the final product, such as a feature not working as intended or software bugs that were overlooked.

Security Risks

Data breaches and security lapses are concerns regardless of where your development team is located. However, when working with Nearshore teams, there might be instances where they aren’t aware of specific data protection regulations that the company must adhere to.

For instance, a developer might unintentionally store sensitive user data in a less secure environment, exposing it to potential threats.

Geopolitical Risks

The political and economic landscape of a country can have direct implications on your Nearshore Software Development projects.

For example, sudden political unrest or economic downturns in the Nearshore country can disrupt project timelines. Or, changes in trade agreements might impact the cost structure midway through a project.

Proven Strategies to Mitigate Nearshore Software Development Risks

Yes, Nearshore Software Development has its risks. But they’re avoidable with the right approach and a trusted Nearshore partner like HatchWorks.

Below we’ve outlined tried and true strategies to mitigate the risks involved with Nearshore Development.

1. Judge Potential Providers by their Security Protocols and Track Record

Do the Nearshore partners you’re considering have robust data security?

And do they have the testimonials and certifications to prove it?

You’ll want to make sure that’s the case before you get started.

HatchWorks is an SOC2 compliant Nearshore provider, meaning any private data or information handled by our remote development teams is completely secure.

Do this	Not that
Partner with Nearshore providers who invest in their data security and are SOC2 compliant.	Sign on with a Nearshore provider who can’t prove or explain how they will keep your data safe.

2. Choose a Nearshore Provider with Developers Fluent in English

If you want to avoid language barriers and cultural misunderstandings, the best thing to do is make sure the team you’re working with is fluent in English.

Luckily, many software developers in Latin America speak English to a high standard. And if you want even better odds, this survey from 2021 shows that Argentina has the highest English proficiency score out of the Latin American countries.

You can even take it one step forward by partnering with a provider who has a base in the U.S.

For example, HatchWorks has offices in the U.S. to make sure there’s always cultural alignment and English fluency between you, us, and our team of highly skilled developers.

Do this	Not that
Check that there’s a US team overseeing projects and hiring English speaking developers.	Trust blindly that the team can speak English.

3. Find an Agile Provider at the Forefront of AI Adoption

Consistent quality development comes off the back of having established frameworks and processes in place. And that point only becomes more important with the introduction of AI.

Statistics show that developers are 55% faster with an AI copilot to help them.
Your Nearshore provider should guide you to AI solutions that align with your business goals and amplify your capabilities.

Most companies don’t know how to leverage AI safely and aren’t following frameworks to determine what is safe adoption and what isn’t. They certainly aren’t able to guide you to effective use of AI.

At HatchWorks we created the Built Right Method which allows us to apply the right frameworks to the projects we’ve taken on and to be at the forefront of AI adoption.

What is the
Built Right Method?

Build software stress-free and on budget with our tried-and-true method that increases speed to value and reduces cost throughout the software development lifecycle.

Specialized, flexible frameworks
AI-enhanced development
Accelerators and automation tech
Continuous value delivery
Hyper-enabled, next-gen teams

Do this	Not that
Select a provider like HatchWorks, who not only embraces AI but has a proven framework to leverage it effectively, ensuring your software is built right from the start.	Settle for a provider without a clear AI adoption strategy, risking your software's relevance and missing out on the efficiency and innovation AI can bring.

4. Establish Clear Communication Channels and Expectations

Before you kick off the project, you need to set clear expectations, define roles, and create a check-in schedule that both you and your Nearshore team will follow.

If your Nearshore team knows who to contact, where, when, and for what, concerns can be addressed promptly, ideation can flow smoothly, and updates communicated effectively.

All of this will streamline project management and collaboration while avoiding the risk of miscommunication or project delays.

This will be made easier if you’re following through on point 3 and have selected an Agile team who can adjust quickly to keep the project on track.

Do this	Not that
Let your Nearshore team know what cadence you expect for updates, the channels they should use to flag problems, and any information they need to meet deadlines.	Break your own communication rules, regularly cancel updates and face-to-face meetings, or provide unclear expectations.

5. Have a Comprehensive Contract that Provides Legal Clarity

A well-drafted contract acts as a safety net, protecting both parties.

It should clearly outline roles, responsibilities, payment terms, and dispute resolution mechanisms. If you have a legal team, make sure they look over the contract before you sign.

This way your development team can’t surprise you with hidden fees or veer off schedule without good reason.

Another way to ensure reputable and responsible Nearshore Development is to work with a US-based provider who has Errors and Omissions Insurance.

Do this	Not that
Work with legal experts to draft a comprehensive contract that addresses all potential scenarios.	Rush into agreements without a detailed contract or overlook key clauses that could protect your interests.

6. Use Countries with Low Geopolitical Risks

Choosing a country with a stable political and economic environment is crucial. Factors to consider include political stability, economic growth, and favorable trade relations. You should also choose a provider who has a large geographical footprint spread across LatAm countries.

HatchWorks works with teams from countries with low geopolitical risks so that you never have to worry about interruptions to your project.

And on the off chance that something does happen, we have teams across LatAm that can jump in and pick up where other developers have left off. We also set you up with a team of distributed developers so that you’re never dependent on one country alone.

Do this	Not that
Research and stay updated on the political and economic landscape of the Nearshore country.	Ignore geopolitical indicators or assume that the current stability of a country guarantees future stability.

Top Time Zone Friendly Destinations for Nearshore Software Development

Now that you’re fully equipped to mitigate risks, where should you turn for Nearshore Development?

Our answer: Latin America. In particular these popular Nearshore locations:

1. Costa Rica: Known for its stable political environment and high education standards, Costa Rica is an emerging player in the nearshore development scene. The country’s emphasis on bilingual education also ensures a workforce fluent in English.

2. Colombia: Medellín and Bogotá are leading the tech revolution in Colombia. The country’s focus on education and tech innovation has produced a generation of skilled developers ready to take on global projects.

3. Brazil: As the largest country in South America, Brazil has a vast tech ecosystem. São Paulo and Rio de Janeiro are at the forefront, with numerous tech companies and startups calling these cities home.

4. Peru: Peru‘s commitment to improving its IT infrastructure and education has fostered a new generation of tech professionals who are agile, skilled, and ready to collaborate on international projects.

5. Mexico: With its proximity to the U.S. and a rapidly growing tech sector, Mexico is a prime location for nearshore development. Cities like Guadalajara and Monterrey are often dubbed the “Silicon Valleys” of Mexico due to their tech-centric ecosystems.

Further reading: Top Latin American Countries for Nearshore Software Development

Avoid the Risks and Reap the Rewards of Nearshore Development with HatchWorks

At HatchWorks we’re dedicated to making your project a success from inception to delivery.

We’re Atlanta based with Nearshore teams across Latin America, giving you onshore quality with offshore affordability.

Our approach is unique and designed to get you the best results.

HatchWorks’ Approach to Nearshore Development

Built from the Ground Up: Unlike many firms that outsource their talent, HatchWorks has meticulously built our Nearshore team from scratch. This dedication is reflected in our 98.5% employee retention rate.

Dedicated Talent: Our Latin America Nearshore teams are 100% committed to your project, ensuring it receives the undivided attention it deserves.

Strategic Positioning: Our teams are strategically located to minimize geopolitical risks, ensuring your projects remain uninterrupted.

US-based support: Every project is set up for success and overseen by a team in the US. They are dedicated and on-hand to make sure your project is delivered on time, on budget, and to the highest standard.

Constant Upskilling: We believe in continuous learning. Our teams are regularly upskilled, bringing expertise across 50+ technologies to your doorstep.

Global Presence: With 8 offices across 6 countries, we have the capability to source rare talent swiftly, ensuring your projects are delivered on time and within budget.

Quick Start: Our streamlined processes and pre-vetted talent pool mean we can kickstart your project in as little as two weeks.

Interested in how HatchWorks can get your project off the ground while cutting your software development costs in half? Contact us today.

Hatchworks: Your US-Based Nearshore Software Development Partner

HatchWorks is a US-based Nearshore software development partner that combines local solutions practice with the affordability and scale of Nearshore outsourcing, all in your time zone.

Start your project in as little as two weeks and cut your software development costs in half.

The post Proven Strategies for Mitigating Nearshore Software Development Risks appeared first on HatchWorks.

8 Outsourcing Myths Debunked: Our Deep Dive into Common Misconceptions

Melissa Malec — Thu, 09 Nov 2023 15:19:22 +0000

Outsourcing myths.

They’re everywhere.

From whispered boardroom conversations to heated debates at tech conferences, these myths shape decisions, often to a company’s detriment.

But what if we told you that much of what you’ve heard is just… noise? And that, of all the outsourcing models and third party options, Nearshore is the one proving the naysayers wrong.

In this article, we’re separating fact from fiction so that the opportunity for faster, cheaper, high quality output is never missed again.

Keep reading to see what myths we’ve debunked and 3 real-life examples of the Nearshore model at work.

Outsourcing Myths Debunked: The Nearshore Advantage

For years, companies have turned to external teams to handle tasks they can’t manage in-house.

Sometimes they even look abroad (offshore), where they can get the work done at a reduced cost.

But lately, a new star has risen in the outsourcing world: Nearshore outsourcing.

According to a recent report by Forrester, 39% of technology leaders intend to increase their use of Nearshore services.

Nearshore is where companies outsource to neighboring, low cost countries with a similar time zone. If you’re US based, that means looking south to Latin America.

It’s a model that works especially well for companies in need of software development. And it’s no wonder when 53% of companies struggle to recruit in-house developers with the skills the business needs.

Nearshore Software Development gives them access to that talent and debunks many preconceived limitations of outsourcing abroad such as language barriers, time-zone issues, poor work quality, hidden costs, and more.

Let’s look at the 8 most common misconceptions companies have about outsourcing and put them to bed once and for all with Nearshore Software Development as an option.

Here’s what to expect:

Myth 1: There are Language and Cultural Barriers in Outsourcing
Myth 2: Outsourcing Compromises Quality
Myth 3: Outsourcing Leads to Time Zone Challenges
Myth 4: Outsourcing Poses Security Risks
Myth 5: There are Hidden Costs in Outsourcing
Myth 6: Outsourced Teams Have Limited Tech Knowledge
Myth 7: Outsourcing is Only for Short-Term Projects
Myth 8: Outsourced Teams Lack Innovation

Myth 1: There are Language and Cultural Barriers in Outsourcing

If you’re outsourcing to another country, especially one with a different language, then language mishaps and cultural misunderstandings are part of the package, right?

Well, not if you choose the country and your outsourcing providers correctly.

With Nearshore, you’re partnering with Latin American countries. This region has more in common with the US than you’d think. From shared cultural events to similar business etiquettes, the alignment is surprisingly close.

And language? It’s less of a barrier than many assume. Latin America has a high adoption of the English language, in part because it’s so close.

This ensures that communication flows smoothly, and misunderstandings are kept to a minimum.

So, while language and culture can be concerns in some outsourcing models, Nearshore offers a refreshing alternative. You’ll find Central and South America even watching the same Netflix shows as us. These small consistencies in culture create a base of comradery and trust.

Myth	Reality
Outsourcing leads to significant language and cultural differences that hinder communication.	Nearshore regions often share cultural similarities with their clients, and professionals are fluent in multiple languages (including English), ensuring seamless communication.

Myth 2: Outsourcing Compromises Quality

Those who choose to outsource software development may expect lower quality work. Or that expectation may prevent you from investing in offshore or Nearshore development altogether.

But when you opt for Nearshore Software Development, you’re not trading quality for cost.

In fact, Nearshore teams are known for their commitment to excellence. They’re equipped with the latest tools, methodologies, and a drive to deliver top-notch software solutions.

And if you want the absolute best, HackerRank reports software developers from Latin America are among the top-rated developers globally.

At HatchWorks, our US-based team makes sure your project is assigned to Nearshore developers who have the necessary skills, ensuring the final product not only meets but often exceeds expectations.

Myth	Reality
Outsourcing means settling for lower quality.	Nearshore teams maintain high standards, often delivering superior software solutions compared to distant offshore alternatives.

Further reading: How to Select the Right Outsourced Development Team

Myth 3: Outsourcing Leads to Time Zone Challenges

We get it. Working with a team 7-10 hours ahead of you can disrupt communication and delay progress. You send an important update or ask a time sensitive question only to be met with silence.

Nearshore Development avoids that completely through its time zone friendly model.

By partnering with teams in neighboring countries, you’re working with just a minimal time zone difference, if there’s a difference at all. This means more overlapping work hours, quicker responses, and real-time collaboration.

With Nearshore, you get the efficiency of working with a local team, minus the hefty price tag. It’s a win-win for project timelines and team synergy.

Myth	Reality
Collaborating with outsourced teams results in time zone difficulties and project delays.	Nearshore development offers minimal time zone differences, promoting real-time collaboration and efficient project management.

Myth 4: Outsourcing Poses Security Risks

Offshore outsourcing can often mean sharing sensitive data across borders, and with that comes the fear of data breaches, unauthorized access, or even misuse of intellectual property.

After all, these companies might not have the same stringent security protocols or legal frameworks in place that you do.

Nearshore service providers, especially the reputable ones, are acutely aware of these concerns.

It’s worth partnering with a US-based provider that factors in security concerns and is accessible to answer any questions you may have.

At HatchWorks, we invest in advanced security infrastructure and train our Nearshore Development teams on best practices. By adhering to US security standards and regularly updating our protocols, your data is treated with the utmost care and protection.

Myth	Reality
Outsourcing increases risks related to data security and intellectual property protection.	Reputable Nearshore providers prioritize client data protection and adhere to international security standards.

Further reading: Hiring a Development Team – Everything You Need to Know

Myth 5: There are Hidden Costs in Outsourcing

When you fly on a budget airline, the fees on top of the ticket itself add up quickly. And it leaves you feeling bamboozled and frustrated.

With outsourcing, you may fear a similar experience. Hidden costs can pop up from unexpected fees, communication breakdowns leading to project reworks, or even extended timelines due to misalignment.

However, Nearshore Development, especially with providers like HatchWorks, tackles these concerns head-on.

First, they prioritize transparency. This means clear contracts that lay out all costs upfront, leaving no room for surprise charges. Plus, their proximity and aligned time zones reduce communication mishaps, ensuring that projects stay on track and within budget.

HatchWorks, for instance, emphasizes regular check-ins and updates, ensuring that both parties are aligned, reducing the chances of costly misunderstandings.

Myth	Reality
Outsourcing, while appearing cost-effective, has hidden expenses.	Nearshore Development ensures transparency, clear contracts, and no unexpected costs, providing a cost-effective solution.

Myth 6: Outsourced Teams Have Limited Tech Knowledge

There’s a lingering belief that if you’re partnering with an outsourcing company, you’ll be getting a team that’s only versed in a handful of outdated technologies.

It suggests that while these teams might be more affordable, they might not offer the competitive advantage modern businesses seek.

This probably stems from the fact that many offshore companies are third-world economies.

Nearshore Development proves this isn’t the case, or at least, it doesn’t have to be.

HatchWork’s Nearshore teams aren’t just tech-savvy; they’re at the forefront of technological innovation.

Committed to maintaining a competitive advantage, the top Nearshore providers invest heavily in continuous training, ensuring their teams are adept across a broad spectrum of tech stacks. From legacy systems to the latest advancements in AI and cloud computing, they’ve got it covered.

Myth	Reality
Outsourced teams specialize only in a narrow range of technologies.	Nearshore teams boast diverse expertise across various tech stacks, staying updated with the latest technologies.

Myth 7: Outsourcing is Only for Short-Term Projects

Businesses often outsource small, short term projects they don’t have time to take on in house. They treat it as a way to take projects off their plate rather than as a way to build long-term, high-impact projects.

But that doesn’t have to be the case and it shouldn’t be. HatchWork’s Nearshore teams, with their dedication, expertise, and minimal turnover make a great outsourcing partner.

That’s because they invest in understanding a company’s goals, ethos, and future plans. This alignment means that businesses can rely on them not just for one project, but as a consistent, reliable tech partner for the long term.

So, while outsourcing can cater to short-term needs, it’s also a powerful strategy for businesses looking to forge lasting, value-driven partnerships.

Myth	Reality
Outsourcing is suitable only for short-term engagements.	Many businesses form long-term partnerships with Nearshore teams, benefiting from their dedication and expertise.

Myth 8: Outsourced Teams Lack Innovation

There’s a stereotype that outsourced teams just follow instructions, lacking the spark to introduce fresh, innovative ideas. But this couldn’t be further from the truth.

With the right outsourcing team, you’re getting an extension of your business, and a group of developers who want to problem solve with you, bringing their years of experience and skills to your service. They even rely on their extensive experience and knowledge to guide you toward the right solutions and methods for your project.

Instead of just executing tasks, they often challenge the status quo, bringing in fresh perspectives and novel solutions.

In fact, their exposure to various projects and industries equips them with a unique lens, driving innovation and pushing boundaries.

Myth	Reality
Outsourced teams don't bring innovative ideas to the table.	Nearshore developers, with their diverse experiences and fresh perspectives, often drive innovation and offer creative solutions.

Examples of Successful Outsourcing

How do we know the 8 myths are actually myths? Because we’ve seen firsthand how outsourcing can lead to transformative success at reduced costs for clients.

Here are 3 examples of our Nearshore Software Development services at work:

AWS Development for a Staffing Company

Our relationship with this client began in 2017 and continues to this day.

For this project we built an AWS end-to-end solution that automated processes within their company. The client didn’t just want execution, they wanted us to ideate and problem solve with them as true partners.

The result? Their team has been able to track an increase in revenue along with the success of the product.

Quite frankly, we couldn’t have done what we’ve done without HatchWorks Technologies."

CTO, Staffing Company

This goes to show that the right outsourcing partner can be instrumental in achieving business goals and that they can be a long term, enduring partner in your software development work.

Software Solution for DesignIntelligence

Our collaboration with DesignIntelligence, a leader in the architecture, engineering, construction, and design industries, began with a clear objective: help them build a platform where firms in these industries could find the right talent and where that talent could find their ideal job roles.

They wanted more than just a job board; they sought a solution that would provide rich, detailed profiles while ensuring professionals’ anonymity and protection against biases.

HatchWorks was brought on board to bring this vision to life not just as an executor but as a strategic partner who could align DesignIntelligence’s vision and goals with user needs and the new platform’s technical capabilities.

This platform allowed professionals to create detailed profiles, showcasing their skills and experience in a way that no other platform did.

The result? A platform MVP built in 3 months where firms could send connection requests to potential candidates, who could then decide if they wanted to reveal their full profile and connect.

Tom Spahn, Design Intelligence’s Managing Partner, found our ability to stick to budget and timeline an invaluable part of the process.

VR Development Services for Gaming Development Company

When a gaming company needed their video game ported to the Meta Quest 2 VR headset, they turned to us to make it reality.

The game was not only ported but optimized for the Meta Quest 2, ensuring smooth gameplay and high-quality graphics.

In their review they said, “We’d also like to shout out Claudio (LATAM General Manager); he was efficient, professional, and an outstanding communicator.”

It’s a perfect example of how using Nearshore Software Development doesn’t mean you’ll compromise on clear, efficient communication.

And overall, the client was thrilled with our commitment and ability to deliver excellent software.

HatchWorks went above and beyond."

Jake Witherell, COO, Schell Games

Choose an Outsourcing Company You Can Trust to Do Great Work

With HatchWorks you’re partnering with a US-based team and Nearshore developers that understands your needs, speaks your language, and operates in a similar time zone.

From our rigorous 5-step screening process to our impressive 98.5% retention rate, we ensure your project stays on track and that you get a true partner.

Ready to experience the transformative power of Nearshore outsourcing?

Contact HatchWorks today and get your project off the ground.

Hatchworks: Your US-Based Nearshore Software Development Partner

HatchWorks is a US-based Nearshore software development partner that combines local solutions practice with the affordability and scale of Nearshore outsourcing, all in your time zone.

Start your project in as little as two weeks and cut your software development costs in half.

The post 8 Outsourcing Myths Debunked: Our Deep Dive into Common Misconceptions appeared first on HatchWorks.

Build vs Buy Software Analysis: An Updated Framework for 2024

Melissa Malec — Tue, 31 Oct 2023 18:08:18 +0000

So, you need a new software solution. Maybe you need to automate a workflow, maybe it will streamline analytics, or maybe it will be the basis of an entirely new offering.

Whatever it is, it doesn’t yet exist in your business.

You have two options:

build your own software from scratch (either internally or through outsourcing)
buy off the shelf software solutions from an external provider

How do you decide? It’s simple, really. You need to go through a build vs buy software analysis. And in this guide, we’ll show you how.

In it, you’ll learn:

The key differences between buying and building software
How you can make an informed decision either way
The Build vs Buy Framework (with guidance on all 5 steps)
The impact 2024’s tech landscape will have on the buy vs build debate
How Nearshore Software Development can give you some of the benefits of buying software while building it

Key Differences Between Buying and Building Software

Before we break down the decision making process for building or buying, let’s look at the core differences between each software development path. This will give you a general understanding of each option and what situations they work best in.

When it Comes to Competitive Differentiation:

If you buy a piece of software, your competitor can easily buy it too. And that’s why buying software will rarely give you a competitive edge.

So if your software’s development is core to your business, building it gives you a custom solution no one else will have.

When Considering Cost Factors:

One of the biggest differences between bought and built software is where and how much money will be spent on the project.

You need to consider the costs that come with both build and buy. While building has a greater upfront costs and usually costs more, don’t underestimate how much software license fees add up over time when bought.

Here is a side by side comparison of the cost factors:

Build Decision Costs	Buy Decision Costs
Development Resources	Software Licensing
Quality Control & Testing	Software Implementation & Integration
Infrastructure & Configuration	Application Customization
End User Training	End User Training
Ongoing Maintenance & Enhancements	Ongoing Maintenance & Support Fees
Software End of Life	Software End of Life

Matrix illustrating project decisions based on strategic impact and complexity.

When Looking at Scale and Complexity:

The bigger the impact new software can have on your business, the more likely you are to want to build it yourself, especially if you have the skills and time to do it justice.

But sometimes, the project is complex and requires a level of expertise you don’t have. In those cases, and in cases where the software fits a need but doesn’t have high impact potential, it’s best to buy.

When Evaluating Market Maturity:

A major consideration in the build vs buy debate is whether there’s a market for the software you’re adding. If tried-and-tested solutions don’t exist, then you should build it.

A small market comes with fewer options and those options might be expensive and/or a poor match while building can lead to first-mover advantages.

When Considering Time Frames:

It takes time to build your own software and conduct a beta test to validate that it works as designed. This testing step is vital to ensure the software is bug-free and helps identify problems that can be resolved via iteration, training, and future improvements. This build-and-test process can take several months—time your team could spend working on other projects

Bought software can be implemented in weeks to months. Of course, it still takes time to find the right vendor, integrate the solution into your systems, and train people to use it but the timeline will be much shorter.

When Evaluating Team Skills:

Many buy vs. build software decisions come down to whether you have the expertise in-house to build it. If you do then you can build the software. Even if you don’t have the skills but know the expertise will be needed for future work, you can look into acquiring them through hiring, training, or outsourcing.

If none of that’s the case, then a quick and easy option is to buy.

When Looking at Team Capacity:

Another key differentiator is capacity.

If your team can and should dedicate time based on the impact of the project, then choose build. But if your team is too busy working on higher-impact projects, buy.

When Checking Internal Support Structures:

When you buy software you also buy external, expert support for implementation and if that software glitches or breaks.

If you build, your team is that support function. That means the project could take up much more of your team’s time than initially planned.

When Considering Data & Security

If your data is a core competitive asset or if you require top-tier security, building your own solution gives you full control, privacy, and security.

But if your data isn’t as sensitive or if standard security protocols suffice, you can buy a solution with established security measures.

Pros and Cons of Build and Buy Software at a Glance

Pros and Cons of Building Software

Pros	Cons
Allows for competitive differentiation	Typically longer timeline
Tailored to your unique needs	Typically more expensive, especially in beginning
Control of roadmap	Creates opportunity costs and can distract from core business
Provides complete control & use of data	Greater potential for error if not core focus
	Responsible for adding new features
	Must provide internal support

Pros and Cons of Buying Software

Pros	Cons
Typically faster to implement	No Roadmap ownership
Requires fewer development resources	Less customized to your specific needs
Feature rich from beginning	Data protection and usage
Proven expertise	Has potential to cost more over time
Easily add features (based on partner roadmap)	Partner risk
Roadmap influence by industry leaders / verticals
Dedicated support team
Reliable data

How to Make an Informed Decision

To build or to buy—that is the question. (We’re fairly confident that’s what Shakespeare meant to write, anyway).

But the answer doesn’t lie in intuition alone—it should come from structured, logical considerations.

Enter the Build vs Buy Framework.

The Build vs Buy Framework Explained

This framework breaks down the decision-making process into clear steps, ensuring that every aspect, from initial discovery to the final recommendation, is carefully considered.

Whether you’re leaning towards buying a point solution or building something you can customize, scale, and iterate on, this framework is your roadmap to a confident decision.

Step 1. Perform Discovery Interviews

Whether building software or buying software, a discovery stage helps you understand the needs and challenges of users.

Speak to departments like sales, customer support, and technical teams. Each will offer a unique perspective. For instance, the sales team can provide insights into customer demands and market trends, while the technical team can highlight feasibility and potential challenges.

Interviewing end-users uncovers their pain points, preferences, and expectations. Whether it’s through focus groups, one-on-one interviews, or surveys, gathering feedback from potential users ensures that the software will be user-centric.

Step 2. Define & Prioritize Requirements
Once you’ve gathered insights, it’s time to define your requirements.

Ask yourself:

What needs to be created and why?
How does it align with the broader business objectives?
What features are essential?
Which ones are nice to have?

You also need to consider the time required and the potential impact of every requirement.

And then you need to list each requirement by priority.

Here are some methods to prioritize effectively:

HatchWorks Prioritization Method: This method is great for prioritizing Product Roadmaps. It works by measuring effort required and value of the project to the business so that you can see at a glance what work is a quick win vs. a slow burn. (Here’s a Miro board version you can use).
MoSCoW Method: This method categorizes requirements into four categories: Must have, Should have, Could have, and Won’t have. It’s a straightforward way to determine which features are non-negotiable and which can be set aside for future iterations.
Value vs. Complexity Matrix: Plot each requirement based on its value to the business against its complexity to implement. Those that offer high value but are low in complexity should be tackled first.
Stakeholder Voting: Allow stakeholders to vote on the features they deem most important. This democratic approach ensures that the most impactful features get the attention they deserve.
Kano Model: This method classifies features based on how they impact user satisfaction. Some features might delight users, while the absence of others might cause dissatisfaction. Understanding this can guide prioritization.

Prioritization ensures the most critical needs are addressed first. These details will later help you determine if build or buy is the route you want to take.

Step 3. Evaluate Functional Areas Against Evaluation Criteria

Functional areas are the distinct sections or modules within software that cater to specific tasks or objectives. In an e-commerce application, the ‘cart’ is a functional area dedicated to item selection and purchase review.

Each functional area contributes to the overall utility and efficiency of the software.

To determine if you should build or buy software you need to evaluate relevant factors against a set of evaluation criteria.

What evaluation criteria should you use?

We broke it down in an interview with our Principal Software Engineer, Jerrik Arrango.

Here’s a summary of the criteria covered in the interview. They’ll look familiar because they’re directly linked to the key differentiators of buy and build.

Competitive Differentiation/Competitive Advantage: How does the software you want to build set your software apart from competitors? Does it offer a unique feature or capability that others don’t? What difference could it make to the user experience and is it a big enough difference that customers would choose you over others?

Cost: What’s the financial implication of developing this feature? Is the investment justified by the potential returns or user benefits?

Scale & Complexity: How extensive is this functional area? Does it involve intricate processes or can it be implemented with relative ease?

Maturity & Commoditization: Is this functional area a standard feature in most software, or is it a novel addition? If it’s common, how can you make yours stand out?

Time Frame: How long will it take to develop, test, and launch this area? Is it feasible given your project timelines?

Internal Expertise: Do you have the in-house skills and knowledge to tackle this area, or would you need external help?

Team Capacity: Does your team have the bandwidth to take on this functional area, or are they already stretched with other tasks?

Support Structure: Once this area is live, what kind of support will it require? Do you have the infrastructure in place to offer this support?

Data & Security: Especially crucial in today’s digital age, how will this functional area handle user data? What measures are in place to ensure data security and compliance with regulations?

The next two steps allow you to look into the logistics of each path.

Step 4: Look into Building

Choosing to build software is like deciding to construct your own house.

Before laying the foundation, there’s groundwork to be done, designs to be drawn up, and feasibility to be checked.

When it comes to software development, there’s the need for a Proof of Concept (PoC).

Develop Proof of Concept

When building software, a proof of concept lets you test your idea in the real world without investing too much time or resources.

Plus, it can be used to get stakeholder buy-in for the software.

Your working model may shed light on technical or functional challenges early in development, allowing you to address them before they become bigger, most costly issues.

Crafting an Effective Proof of Concept:

Stay focused: Your PoC should focus on the core functionality or the most innovative aspect of your software idea. Avoid getting bogged down in details.
Gather feedback: Use the PoC to gather user feedback. Understand what works and what doesn’t.
Iterate: Based on feedback, make necessary adjustments. Remember, the PoC is a dynamic tool, not a one-off.

Remember, a Proof of Concept is different from a prototype or MVP (minimum viable product). Your PoC aims to validate the technical feasibility of a specific idea or concept, without necessarily being a complete or interactive version of the product.

If you want to build a prototype, check out our guide to prototyping your digital product.

The Role of Nearshore Software Development in Proof of Concept

You might not have the time, resources, or internal talent to build software, even a proof of concept bit of software, on your own. That’s where Nearshore Software Development can come into play.

Nearshore Software Development (a timezone friendly outsourcing model) is where a company uses software developers in nearby countries rather than building in-house, using a boutique agency in-country, or using offshore developers.

Here’s why it’s beneficial at the proof of concept stage and for complete projects:

Speedy Collaboration
The shared or closely aligned time zones facilitate real-time communication. This immediacy in interactions accelerates decision-making and problem-solving, streamlining the PoC development process.

Cost-Effectiveness
Nearshore developers, while offering expertise, often come at competitive rates. This balance of quality and cost ensures that PoC development remains budget-friendly.

Enhanced Flexibility
With nearshore development, there’s often greater adaptability in terms of scaling teams up or down based on project requirements. This flexibility can be crucial during the dynamic phases of PoC creation, where needs might shift rapidly.

Want to learn more? Check out our library of resources dedicated to Nearshore Software Development.

Step 5: Look into Buying

Not all off the shelf products are worthwhile investments. So when exploring this route, you need to do your due diligence. That includes exploring various vendors, understanding their offerings, and ensuring they align with your needs.

Create a Vendor List

A well-researched vendor list provides a snapshot of the available options in the market.

To create your vendor list, you need to find appropriate vendors.

The best ways to find relevant software vendors are through:

Research: Begin with online searches, industry forums, and software directories.
Referrals: Network with peers or industry colleagues to gather recommendations.
Reviews: Utilize user reviews and feedback to gauge the reputation and reliability of vendors.

But a list of vendors isn’t enough. You’ll now need to evaluate them and determine which one will fit your software needs best. And that starts with asking them for information and in some cases, a formal proposal.

Send RFIs and RFPs

RFI (request for information) and RFP (request for proposal) are two ways you can learn more about potential vendors and determine how suitable they are.

RFI’s ask for preliminary, basic information such as what the vendor does.

If your vendor list is long, RFI’s can help you quickly narrow it down to a few serious contenders. Perhaps the RFI reveals the vendor doesn’t have the exact software you need or the price is too high for your budget.

RFPs on the other hand ask for in depth, custom proposals for your project. These are best used when deciding between a few vendors and should come with demos of the software you’re potentially purchasing.

As with most things, how you ask for the information and proposals determines the quality of the answers.

Here are 3 quick tips for creating effective RFIs and RFPs:

Clarity is Key: Be explicit about your needs, objectives, and constraints.
Ask the Right Questions: Tailor your queries to gain insights into the vendor’s capabilities, experience, and approach.
Set Clear Deadlines: Provide a timeline, ensuring vendors know when to respond, keeping the process efficient.

Review Vendor Response & Demos

RFIs and RFPs are out and responses start pouring in. It’s time to meticulously analyze each vendor response.

When reviewing RFP responses:

look for alignment with your requirements
check the feasibility of the proposed solutions
Review the vendor’s track record

When evaluating demos:

interact with the software, test its features, and ask questions
use real-world scenarios to see how the software performs
involve team members who’ll be using the software and ask for their insights and feedback

Step 6: Provide Build vs Buy Recommendation

At this stage you should have a firm understanding of what the new software needs to do, who it serves, how it differentiates you from competitors, what vendors you could buy from, and what the proof of concept looks like.

You’ve looked into each path and it’s time to make a decision.

And thanks to the framework, you’re equipped to make the right choice—the one that aligns best with the organization’s goals, budget, timeline, and long-term vision.

But even if you’re bought into your choice, you need to convince other stakeholders it’s the right one.

Here’s how to present your recommendation convincingly:

Start with the ‘why’: Before diving into the ‘what’ and ‘how,’ explain the rationale behind your recommendation. Highlight the key insights and findings that shaped your decision.
Use data: Numbers speak volumes. Showcase relevant data, comparisons, and projections that support your recommendation. Whether it’s cost savings, time-to-market advantages, or scalability benefits, let the numbers make your case.
Address concerns: Anticipate potential questions or reservations stakeholders might have. Be prepared to address them, offering solutions or alternatives.
Visual aids: Use charts, graphs, and infographics to make your presentation engaging and easy to digest. A well-structured visual representation can simplify complex information.
Engage and involve: Encourage feedback and open the floor for discussion. Stakeholders are more likely to buy into a decision if they feel involved in the process.

2024 Tech Landscape’s Impact on Buy vs Build

In the late 18th century the world experienced an industrial revolution. Business operations completely changed as machines automated production.

Today, we’re experiencing a similar disruption.

Artificial intelligence, while not new, has gained momentum with McKinsey calling 2023 ‘Generative AI’s breakout year’.

There are few businesses that haven’t looked into how tools like ChatGPT, RPA, and no-code software platforms can increase productivity while reducing costs.

One report shows that 66% of companies investing in AI before the end of 2024 expect AI to have a positive impact on their company.

This demand is fueling market growth. In fact, one Statista report predicts the global AI market will be valued at more than half a trillion U.S. dollars in 2023.

But what does Generative AI growth have to do with the Buy vs Build decision you’re facing?

Generative AI can create content, including software code. It’s like having a developer at your disposal.

Generative AI’s Impact on Buy vs Build:

Automated development: Generative AI can assist in or even automate parts of the software development process, making the ‘build’ path more accessible and efficient.
Innovation: With AI’s ability to generate unique solutions, businesses can explore innovative features or functionalities that might not be available in pre-existing software.
Continuous improvement: AI can iterate and optimize software based on user feedback and behavior, ensuring the software remains relevant and effective.

Of course, AI is far from perfect. ChatGPT specifically has been known to make up data. There are also ongoing debates about the ethical considerations and security risks of using the tools on offer.

HatchWorks VP of Marketing and Strategy thinks the risks to security are worth considering:

In the realm of generative AI like ChatGPT, we're faced with a nuanced 'build vs. buy' decision. Do we lean on off-the-shelf solutions, potentially putting our data out there, even if not publicly? Or, considering incidents like the Samsung breach, do we explore building our own using open-source models like Llama? It's a new frontier where privacy and data considerations are paramount."

Matt Paige, VP of Marketing and Strategy at HatchWorks

Alongside AI development is a booming low-code and no-code market. In the image below, you can see how fast and how large it’s set to grow by the year 2030.

These platforms allow individuals, even those without a technical background, to create applications by using graphical interfaces and drag-and-drop functionalities. For businesses needing software, it can shorten the time it takes to build software from scratch and reduce the need for technical skills. Low-code, No-code Impact on Buy vs Build:

Speedy development: With these platforms, the time to develop software is drastically reduced. This can make the ‘build’ option more appealing for businesses looking for quick solutions.
Cost efficiency: The need for specialized developers is minimized, leading to potential cost savings.
Flexibility: Businesses can tailor applications to their specific needs, ensuring a better fit than off-the-shelf solutions.

But it’s worth noting these platforms might not be suitable for highly complex or specialized software needs.

Cut Costs, Streamline Processes, and Balance the Benefits of Both Buy and Build with Nearshore Software Development

Maybe you’ve decided the software project you have in mind needs customization, will set you apart from your competitors, and is worth building from scratch—but you’re worried about the costs, whether your team has the skills to develop it, and if they have the time.

That’s where partnering with a Nearshore Development company like HatchWorks can give you the speed, expertise, and cost effectiveness of purchasing software when building it.

Nearshore Software Development is where a company partners with software developers in nearby countries rather than building in-house, using a boutique agency in-country, or using offshore developers. For US companies, this means working with developers in South and Central America. It’s a cost-effective way to build custom software.

It’s an ideal solution for businesses looking to outsource software development without the challenges of drastically different time zones or cultural barriers.

HatchWork’s offers US-based, high-touch service and boasts a 98.5% retention rate. This streamlines project management, fast-tracks timelines, and gives you consistent access to expertise.

Start your build project in as little as two weeks—contact HatchWorks today.

Additional Resources
Want to learn more? Check out these software development resources:

Hatchworks: Your US-Based Nearshore Software Development Partner

HatchWorks is a US-based Nearshore software development partner that combines local, high-touch service with the affordability and scale of Nearshore outsourcing, all in your time zone.

Our teams are fluent in English and have a 98.5% retention rate—meaning your project won’t be interrupted or delayed.

After a 5-step screening process, we fit you with the right talent for the job and build your digital products one of three ways: through Staff Augmentation, Dedicated Agile Teams, or Outcome-Based Projects (a full service software development solution).

Start your project in as little as two weeks and cut your software development costs in half.

The post Build vs Buy Software Analysis: An Updated Framework for 2024 appeared first on HatchWorks.

Time Zone Friendly Outsourcing: Pros, Cons, and Best Practices

Melissa Malec — Thu, 19 Oct 2023 17:47:47 +0000

Long distance relationships are hard. They’re made harder still when operating from different time zones.

It’s the same when a company outsources software development. Drastically different time zones can complicate processes and cause frustration between your team and the developers.

The same or similar time zones, however, allows you time to communicate, collaborate, and align on high-impact projects without delay.

Which is why companies are turning to a time zone friendly outsourcing model.

But what exactly is it? How does it work? And what are the pros, cons, and best practices you need to consider before you move forward?

In this article, we cover all that and more with a special focus on Nearshore Software Development—which is what we do best.

Here’s what to expect:

What is Time Zone Friendly Outsourcing?
The Pros and Cons of Time Zone Friendly Outsourcing
Best Practices for Time Zone Friendly Outsourcing
Time Zone Friendly Outsourcing in Practice: Case Study
How to Choose the Right Outsourcing Partner

What is Time Zone Friendly Outsourcing?

Time zone friendly outsourcing is when you outsource work to a person or company that has a similar geographical location to you, and as a result, similar working hours.

For example, if a US company outsources software development to South America.

In this example, the company can reduce costs while problem solving in real-time with developers, getting timely updates, and accelerating toward desired project outcomes.

Compare this to outsourcing to India or the Philippines. Sure, offshore tech teams are inexpensive compared to US based alternatives but with only a few working hours to align, you’ll run into complications in communication and delays in project progress. One misunderstanding can result in hours of wasted work—and as a consequence, wasted money.

Time zone friendly outsourced work is the perfect blend of cost-effective labor and real-time collaboration.

If you want to learn more about the differences between outsourcing models, read our comprehensive comparison of Nearshore vs. Offshore software outsourcing.

Why Do Time Zones Matter When Outsourcing?

Imagine you send a brief over to an offshore development team with a time zone difference.

They’re based in India and they get started on the project while you’re asleep—only they don’t fully understand the brief. There’s confusion over the web and mobile app specs.

The project has a quick turnaround time so they make their assumptions and move forward.

It will go one of three ways:

They wait to get started until you can clarify, delaying the project from the offset.
The next day you find that hours of work have been wasted working toward the wrong thing.
The problem only surfaces toward the end of the project when you’re about to launch.

That’s why time zones matter.

Being in the same or neighboring time zones facilitates instant and regular communication that can help you progress faster and stay in alignment.

The Pros and Cons of Time Zone Friendly Outsourcing

Time zone friendly outsourcing, like any business strategy, comes with advantages and challenges.

Knowing what they are can help you decide if it’s best placed to help you reduce costs and meet your business goals.

Pros and Cons of Time Zone Friendly Outsourcing

Pros	Cons
Same time zone improves communication	A smaller talent pool than when looking globally
More cost efficient than hiring or expensive local agencies	Cultural differences may cause friction
Increased productivity when you can collab in real-time	May not be the cheapest labour available
Reduce project delays by problem solving the same day the problem arises
Schedule meetings within normal working hours

Pros of Outsourcing to the Same Time Zone

Improved Communication:

Being in the same or neighboring time zones means teams can communicate in real-time. This reduces the chances of misunderstandings and ensures everyone is on the same page.

Increased Productivity:

With aligned working hours, there’s a continuous flow of work. Teams can collaborate, address issues, and make decisions promptly, keeping the project momentum going.

Flexible Scheduling:

Online meetings, brainstorming sessions, and reviews can be scheduled in your business hours, ensuring timely feedback and alignment.

Cost-Efficiency:

It might not be the cheapest outsourcing option, but it beats having to hire an in-house team. Plus the balance of cost and productivity often results in better value for money than using an offshore team.

Reduced Project Delays:

Immediate problem resolution means fewer hiccups and smoother project progression.

Cons of Outsourcing to the Same Time Zone

Limited Talent Pool:

By focusing on specific time zones (such as in Latin American countries), you might miss out on global talent available in other regions (Europe and Asia).

Potential Higher Costs:

Depending on the region, the costs might be higher than some offshore outsourcing options. The convenience of working within the same time zone usually offsets any cost differences. Plus, it’s still a cost efficient option.

Cultural Differences:

Even within similar time zones, there can be cultural differences that might require adjustments in collaboration styles.

Best Practices for Time Zone Friendly Outsourcing

With 60% of businesses planning to outsource development work, it’s important to follow a set of best practices that ensures their time and resources aren’t wasted on insufficient results.

Using Nearshore software developers (time zone compatible outsourcing) comes with its own set of best practices. Follow them and you’ll feel more confident in the capabilities of your Nearshore team.

Schedule regular updates: Keeping both teams informed is crucial. Schedule daily or weekly check-ins to discuss progress, address challenges, and align on next steps.

Set up communication channels: Establish dedicated channels for different types of communication. Whether it’s a chat for quick queries, a video call for brainstorming, or an email for formal updates, having clear channels reduces confusion.

Work with flexibility: While the essence of this model is time zone alignment, a little flexibility can go a long way. If there’s a slight difference in working hours, consider adjusting your team’s schedule occasionally to ensure overlap.

Document everything: Ensure all project details, from requirements to feedback, are documented. This aids in project coordination and ensures that nothing gets lost in translation.

Onboard and train your new team: Equip your outsourced team with all the necessary training and resources they need. This ensures they’re aligned with your company’s objectives and processes.

Tools to Facilitate Seamless Collaboration with Your Nearshore Developers

Geographical and cultural barriers are easily overcome when you have the right tools in your tech stack.

Here are our favorite collaboration tools when working with a remote team, whether offshore, Nearshore, or in-house.

Video Conferencing Platforms: Whether it’s a quick catch-up or a detailed project review, tools like Google Meets, MS Teams, and Zoom offer reliable video conferencing solutions that make virtual meetings feel almost as good as face-to-face interactions.
Jira: A go-to tool for many software developers, Jira offers robust project management and tracking capabilities. It’s ideal for setting tasks, monitoring progress, and ensuring everyone is aligned on project milestones.
Atlassian Confluence: This platform complements Jira by providing a space for teams to create, share, and collaborate on documents. Whether it’s project documentation, meeting notes, or brainstorming ideas, Confluence keeps everything organized.
Miro: An online collaborative whiteboard, Miro is perfect for brainstorming sessions, design thinking, and mapping out workflows. It brings the interactive experience of a physical whiteboard to the virtual space.
Slack: For real-time communication, Slack stands out. It allows teams to have quick chats, share files, and even integrate with other tools to ensure everyone stays in the loop.
Trello: For project coordination, Trello offers a visual board where tasks can be tracked, assigned, and updated.

Time Zone Friendly Outsourcing in Practice: Case Study

DesignIntelligence, a global leader in the architecture, engineering, construction, and design industries wanted to create a software solution that streamlined the hiring process for architecture firms.

They turned to HatchWorks to make this a reality and relied on software developers based in Latin America to reduce costs without sacrificing quality.

The process began with an in-depth solution workshop. HatchWorks and DesignIntelligence’s core stakeholders aligned on vision, goals, and user needs.

This collaborative approach, made smoother without significant time zone differences, allowed for swift decision-making and ideation.

Ultimately, it was the synergy between the two teams that resulted in a robust MVP of the software delivered in a tight 3-month timeframe.

Read the full case study: DesignIntelligence – HatchWorks

How to Choose the Right Outsourcing Partner

Working in the same time zone is just one piece of the puzzle. You also need to ensure the outsourcing team you choose is efficient and effective at software development.

They need to integrate seamlessly with your company’s processes, understand your needs, and deliver a project that meets (if not exceeds) expectations.

So when considering Nearshore outsourcing companies, it’s important that they:

have the technical expertise to complete the job and are skilled in emerging technologies (including generative AI)
prove that expertise with client testimonials and case studies
have headquarters in the US for local accountability and service
have in-country management of their Latin America developer team (thus managing the developer team for you)
see high employee retention (leaving little chance team changes will disrupt your project)
Real-time collaboration within your working hours
are a cost-effective alternative to US based outsourcing
deliver outcome based projects and project based work in addition to staff augmentation
demonstrate clear, proactive communication throughout the sales process
follow an Agile approach

It’s important you don’t rush your decision. Take the time to research potential partners, conduct interviews, and even consider trial projects to gauge their capabilities.

As you delve into your research, you might find our recent analysis on top-ranking nearshore software companies to be a valuable resource.

Additional Resources

If you’re interested in time zone friendly outsourcing you may find these articles interesting.

Hatchworks: Your US-Based Nearshore Software Development Partner

HatchWorks is a US-based Nearshore software development partner that combines local, high-touch service with the affordability and scale of Nearshore outsourcing, all in your time zone.

Our teams are fluent in English and have a 98.5% retention rate—meaning your project won’t be interrupted or delayed.

Start your project in as little as two weeks and cut your software development costs in half.

The post Time Zone Friendly Outsourcing: Pros, Cons, and Best Practices appeared first on HatchWorks.

Melissa Malec, Author at HatchWorks

Generative AI Statistics: The 2024 Landscape – Emerging Trends, and Developer Insights

The Current State of the Global AI Market

What Tools Are We Using? Core AI Technologies and Generative AI Systems

Developer Insights on Generative AI: How is it Impacting Software Development

Jerrik Arango

Fernando Manzo

Gabriel Bejarano

Key Statistics and Trends in Generative AI

Trend: Programming/Software Development is Seeing the Most Impact on Productivity

Trend: Adoption of Generative AI is Explosive

Wilver Melendez

Trend: The East is Generally More Accepting of AI as a Benefit

Trend: Trust in AI is Divided Among Those with Geographic and Demographic Differences

Trend: Generative AI is Being Used to Fix Labor Shortages

Trend: Businesses Believe in Generative AIs Ability to Boost Productivity

The Impact of Generative AI on Employment and Skill Development

Job Market Dynamics:

Skill Development and Educational Trends:

Brandon Powell

Ethical Considerations and Regulatory Landscape

Looking Forward: Where Is Generative AI Going Next?

Brian Cornielle Batista

David Mora Guerrero

Built Right, Delivered Fast

Staff Augmentation: A Guide to Scaling Your Development Team in 2024

Staff Augmentation: Meaning and How it Works

How Staff Augmentation Works

Key Components of Staff Augmentation

Key Benefits of Staff Augmentation

Quality Control

Bridging Skill Gaps Through Global Talent

Cost-Effective Solution

Quick Scaling of Teams

When to Consider Staff Augmentation for Your Business

Scenario 1: You need a skillset you don’t have internally

Scenario 2: You have a quick turnaround

Scenario 3: You need to temporarily scale your team

Staff Augmentation vs Project Outsourcing

Pros and Cons of Staff Augmentation and Project Outsourcing

Best Practices in Staff Augmentation

Ensuring Seamless Integration

To See Long-Term Success

Overcoming Challenges in Staff Augmentation

Communication

Culture

Knowledge Transfer

Legal Compliance

The HatchWorks Approach to Successful Staff Augmentation for Software Development

Built Right, Delivered Fast

Nearshore vs Offshore in 2024: A Detailed Comparison of Outsourcing Models

What is Nearshore Outsourcing?

What is Offshore Outsourcing?

Outsourcing Software Development: Nearshore vs Offshore Models

Geographic Proximity and Time Zone Alignment

Cultural Affinity and Communication

Cost Differences

Access to Talent

Pros and Cons of Nearshore and Offshore Software Development

Advantages of Nearshore Software Development

Disadvantages of Nearshore Software Development

Projects Best Suited for Nearshore Software Development:

Advantages of Offshore Software Development

Disadvantages of Offshore Software Development

Projects best suited for Offshore software development:

Choosing Between Nearshore and Offshore: Factors to Consider

Your Project Requirements

Your Budget Constraints

Your Cultural Compatibility

Reduce Project Development Costs without Compromising on Quality with Nearshore Software Development

Getting Started with HatchWorks Is Easy

In-House Software Development vs Outsourcing: A Comprehensive Guide for 2024

What is In-House Software Development?

Benefits of In-House Software Development

And What Does Outsourcing Look Like in Software Development?

Benefits of Outsourcing Software Development

Comparing the Two Side by Side

Cost Differences

In-House Software Development Costs:

Outsourcing Costs:

What is the
Built Right Method?

What is the
Built Right Method?