So, 2020. Just when we thought we knew all the rules about software development and outsourcing, along came a year that blindsided us all. As well as the devastating loss of life, the closing of our high streets and lost jobs sent many countries spiralling into recession.
For the world of software development, this has thrown up a whole new set of challenges; not least that of managing costs. This has presented a very real surge in the number of development jobs being outsourced and has introduced some new players into the mix.
Locking down new opportunities
“Outsourcing software development - and, in particular, nearshoring, has become massively popular over the last decade or so. While some may say that this is all about cost savings, it actually goes a lot deeper than that” says Jack Zmudzinski, a senior associate at startnearhoring.
In recent years, the number of developers with advanced skill sets has increased exponentially in many countries across the world; particularly throughout Europe. Savvy students have realised the lucrative and rewarding nature of a career within software development and, factors such as cheap flights and increased technology for communication have all meant that doing business with an agency or individual in another country is really easy and straightforward - particularly for those within Europe, the United States and North America.
So what has outsourcing looked like during the 2020 COVID-19 pandemic?
To begin with, there are some territories which have been largely unaffected by the pandemic. Whilst America, Canada and Central European hubs have been sent into almost full lockdown in order to keep the virus under control, some countries like Albania, Romania, Finland, Poland and Ukraine have been left relatively untouched. This has meant that while other agencies effectively ground to a halt, those in these countries continued to thrive. In turn, companies in affected countries have been able to tap into those which were still up and running in order to get projects completed.
“Ukraine has become very much a go-to outsourcing location for companies within and North America for a number of reasons says Max Babych, CEO at SPDLoad.
To begin with, Ukraine is a rising star in the tech field, with 3000 technology intensive companies actively working for customers all around the world. This means that there’s a huge tech talent pool waiting to be tapped into - added Max.
Additionally, highly competitive pricing and a number of cultural similarities have meant that Ukraine is an increasingly good fit for brands in North America.
When it comes to first choice for those within Europe, Poland has several high-reputation software development agencies, such as Future Processing and, the country’s low COVID-19 death rate of 2,092 people has meant that business was able to resume relatively quickly. In recent years, the Polish IT market has grown at a super-stable rate of between 5% and 10% per year and, currently, it accounts for 3.3% of the country’s GDP. In the last five years, we’ve started to see some superstar software developers emerging from the country, including CD Project - a brand who gave us the Witcher video game series and, have since gone on to become one of the key players in the industry worldwide. These days, Polish engineers are recognised as some of the most skilled Java developers in the world and, Warsaw and Krakow, have become known as world leaders across the globe for software development outsourcing.
As well as countries within Europe, 2020 has seen the emergence of some surprising software development players from other parts of the world, including Vietnam, Brazil and The Philippines - all of which offer considerable cost savings as well as a fresh new pool of IT and tech talent.
A new landscape
Needless to say, the very nature of outsourcing carries pretty much a zero risk regarding the virus due to the fact that it involves no contact between the parties. Communication by email, telephone and Zoom calls allows for troubleshooting and updates without any significant problems.
The ease and low cost of outsourcing has meant that even small startups can get on board with software development projects without the cost and commitment of full time staff or soaring prices in their local area. This has been incredibly important at a time when local and international travel and socialising has had a huge question mark over it, preventing meetings, meet and greets and the usual networking events” says founder at Totality Services.
When The Dust Settles
As COVID-19 cases continue to plateau and decline, we can just about see a light at the end of the tunnel in terms of getting industry back on its feet. This doesn’t, however, mean that brands will revert to their old practices. While 2020 has been devastating in many ways, a lot of brands have discovered new ways of doing business - including outsourcing. As the future remains relatively uncertain, most brands will continue with the practices set in place during this extraordinary year.
While outsourcing will almost certainly go from strength to strength, we are likely to see a lot more diversification in the format that it takes. Moving into 2021, the types of outsourcing which are likely to be more popular are:
Co-Sourcing
A relatively new format, co-sourcing is when a brand hires an external team to act as an additional ‘arm’ of the brand. The brand and the external team become a partnership whereby both parties are responsible for risk, solutions and the troubleshooting of issues. The benefit of this to a brand is that an outsourced company who effectively becomes a partner is much more invested in the work and in the end result. This also benefits the outsourcing company in that all risks and responsibilities are shared. For brands who expect to embark on a number of software development projects, this can be an ideal solution.
Outcome Based Outsourcing
Similar to co-sourcing in that risks are shared, outcome based outsourcing is all about rewarding an outsourcing company based on the outcome of the project. This benefits the outsourcing company as fast delivery of high quality work will result in higher rewards. For the brand, this type of outsourcing helps to mitigate risk in that the brand will only be paying for the quality of work delivered.
Finding your outsourced software developer
When it comes to finding the right supplier for your requirements, many of the rules are the same as looking for one in your own home town:
Word of mouth - Before conducting an exhaustive internet search for your offshore developer, try joining a few social media groups and forums as these can be really useful in putting together a shortlist. These resources will allow you to connect with brands who have completed similar projects to the one you have planned and will be able to recommend developers.
The audition - Once you have your shortlist, prepare a comprehensive list of questions designed to drill down into the supplier’s history, qualifications and, most importantly, experience with projects like yours.
Virtual get together - Before making a decision, organise a zoom or video call with your shortlist of suppliers. Although the supplier may look good on paper, it’s also important to get a feel for the actual players - particularly if you’re looking at a long term relationship.
The dotted line - Finally, bear in mind that laws and guidelines in the developer’s country may be slightly different to those in yours - so, always make sure that you have a solicitor look over the paperwork before signing anything.
As we head into 2021, we can expect a few bumps in the road - but also a great number of opportunities. The world of software development is changing at breakneck speed - as are some of the players involved. With new processes and formats for outsourcing arriving almost every month, we can certainly expect outsourcing to become the ‘new normal’ - whatever that may mean!
