Challenges in Nearshore Software Development

June 12, 2023

Many businesses have taken advantage of supplementing resources with outsourcing for decades. Isn’t nearshoring simply outsourcing? Technically, yes. Nearshoring is a type of outsourcing to a locale that’s nearby geographically. For many companies inside the US, that means Canada, Mexico, or Latin America.

The business benefits of Nearshore Software Development include access to talent, lower costs, faster time to market, and access to specialized expertise when needed. Nearshoring provides businesses with supplemental resources to help get projects out the door.

This guide describes the challenges of nearshoring software development and tips for effectively balancing nearshoring risks and rewards.

Why is communication a challenge with nearshoring?

Communication has long been a risk with any outsourcing model, including nearshoring. Even with nearshoring, there are typically significant differences in communication styles, languages spoken, and ensuring a shared or common understanding of definitions, principles, security, and quality. Simply being able to communicate using the same language does not guarantee teams fully understand the work expectations.

Additionally, time zone differences impact communication, making meetings difficult for one or the other team. Scheduling conflicts over time zones means one team or another is continuously working at odd hours or overtime.

Overcoming scheduling conflicts is best done by sharing the responsibility. When a business nearshores with another, team members become a single team. Team members must share the burden of working odd hours to manage meetings and other necessary communication. Something as simple as taking turns working the odd hours works wonders. Sharing the burden makes team members feel more a part of the team rather than being distanced by culture, language, and location.

The more difficult communication challenges include managing cultural differences appropriately and ensuring team members truly understand work tasks and expectations.

Best practices for nearshoring communication

Cultural differences can be managed by training team members on each culture. Simply stated, know, and understand at a basic level the cultures you’re nearshoring with.

Ensuring a common understanding of work tasks and expectations is best done with quality task management tools and frequent team check-ins. Start by providing clear requirements and task documentation. Follow-up documentation with team discussions on task expectations. Make sure the nearshoring team understands the quality standards expected.

Use Agile-type reviews to review code and testing. Do it early, so any misunderstandings are solved quickly. Document notes and discussions so everyone can review them as needed. Remember not everyone sees life in the same light.

What are the risks involving nearshoring software engineering and intellectual property?

Nearshoring software engineering carries additional risk around intellectual property (IP) rights. When businesses use outsourcing, IP protection is a concern. Many countries have varying rules and legal regulations around IP.

Protect your business and assess the potential risks for security, confidentiality, and IP infringement with potential nearshore providers before signing a contract. As a business, you are responsible for safeguarding and securing sensitive data and any proprietary technology.

One way to protect your business is to understand the legal differences between you and your nearshoring business partner concerning IP. Create contracts that include non-disclosure agreements (NDAs). Make sure contracts are clear and accurate for each business entity. Consider using a legal consultant experienced with international and national business law to review all contracts and legal agreements.

Finally, implement a continuous monitoring system to track your IP. Ensure compliance with contractual agreements. Be vigilant and ensure you detect any suspicious activity as soon as possible. IP is a vital business asset, plan and prepare to protect it.

Data security and regulatory compliance impacts when using nearshoring

Maintaining your regulatory compliance is difficult inside the US. When you add nearshoring, you’ve at least doubled your regulatory compliance needs in some cases. Engaging with a nearshoring business partner means carefully reviewing all regulatory requirements from all impacted countries.

Various international regulations especially impact cyber and data security. Don’t rely on hope concerning security and compliance. Non-compliance can result in legal and financial losses, including, in some cases, prison time. Review security and compliance requirements carefully and preferably with a qualified expert to avoid hefty legal fees and government fines.

Start by implementing strong and vigilant cybersecurity measures. Secure data using encryption, secure storage, and limit access even internally. Add continuous security monitoring to ensure any suspicious activity is tracked and responded to quickly and effectively.

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