You might have spent hours surfing the Internet in a desperate attempt to find a team of software as a service (SaaS) experts that wouldn’t make you cry over the invoices. Or maybe you have serious doubts as to whether you’ll be able to effectively communicate with teammates, if you decide to outsource your project. If these problems sound familiar to you, here’s something to comfort you.
Nearshore SaaS development can be the answer to your pressing concerns. Thanks to nearshore software outsourcing, you can not only cut down your costs but also build a team that will function as a finely tuned instrument.
The JatApp team has been delivering outsourcing services to SaaS companies for more than seven consecutive years. In this blog post, we’ll share our expertise to help you decide whether to invest in nearshore development or not. So, let’s jump right in.
What is nearshore SaaS development?
Nearshore SaaS development refers to the type of outsourcing when a business works with a software company from a neighboring country to build a SaaS product. Unlike offshore development, nearshore outsourcing presupposes small time zone differences, which significantly facilitates communication between teams.
It’s not uncommon when companies from Germany seek a development partner from Poland or Ukraine, or when the American businesses outsource their SaaS development to Latin America. Let’s find out why they’re pursuing such a strategy.
Nearshore development
The obvious and not so obvious benefits of nearshore SaaS development
When considering nearshore software development services, it’s quite normal to hesitate whether hiring a team from another country is really worth a shot. To help you make an informed decision, we’re going to break down some tangible benefits to prove that this business move can offer to you.
Reduced costs
Reduced expenses is one of the main reasons why SaaS companies choose nearshore development. As a rule, businesses want to have the best of both worlds: develop a high quality solution, and pay a reasonable cost for it. That’s why many Western European companies opt for partnering with companies from Eastern Europe, where the prices for software development are more affordable, but engineers’ expertise is at the same high level.
If you wonder why the development costs in Eastern European countries, like Ukraine, tend to be lower, the answer is because of the lower costs of living. This means that you won’t have to pay for expensive offices, face extra taxes, splash out on utilities, and stuff like that. As proof, by cooperating with JatApp, a Ukrainian software company, you can reduce your overall expenses by up to 60% compared to Western markets.
Cultural alignment
Hofstede’s cultural dimensions theory highlights the importance of taking into account differences between cultures when doing business with international partners. Hofstede distinguished six major categories that define a national culture:
- Power distance
This dimension shows the degree to which the society tolerates power and inequality.
- Individualism
The individualism dimension illustrates the degree to which people of a specific culture focus on personal goals.
- Uncertainty avoidance
The uncertainty avoidance index shows the extent to which the society tolerates ambiguity.
- Masculinity
This cultural dimension considers significance of success, competition, and achievements in a certain culture.
- Long-term orientation
The following dimension shows the extent to which the society members are able to refuse short-term gratification in order to attain long-term goals.
- Indulgence
The indulgence index demonstrates the tendency to control impulses and fulfill desires.
All these categories matter when a company chooses the destination for outsourcing its development. For example, power inequality that may be quite normal to your company may be extremely offensive to your team members from a foreign outsourcing agency. By choosing nearshoring you’re more likely to cooperate with a company that has similar values.
To give you an idea, let’s look at the cultural differences between Ukraine and France according to Hofstede’s cultural dimensions theory. Even though there are some major discrepancies in the level of individualism and indulgence, there are still many cultural traits that these nations have in common, like long-term orientation and power distance. Having similar values would allow French companies to outsource their SaaS development to Ukraine without constantly worrying about uncomfortable situations and misunderstandings.
Cultural differences between Ukraine and France according to Hofstede’s cultural dimensions theory
As proof, one of our recent clients was a startup from France. The Cannes-based company asked to build software for its power bank rental platform. Throughout the entire project, we didn’t have any confusion or misinterpretation because of cultural differences. Our teams shared the same values and work ethics, like focus on careful planning, long-term goals, and leadership.
Small time zone differences
No business is immune to sudden changes and unexpected problems. It’s not rare when the project success depends on a company’s ability to respond to rising issues quickly. When you and your outsourcing partner share similar time zones, it’s easier for you to keep the lines of communication open. And when both parties share the same working hours, it may take just one call or message to instantly resolve an urgent concern.
Moreover, team members need to plan a lot when starting a new project, which is why close cooperation between you and a software development company you choose is super important. Again, nearshore product development allows companies to plan the project more quickly, since teammates can brainstorm together using tools like Miro or conduct Zoom meetings whenever necessary.
Access to a highly skilled and educated workforce
Statistics suggest that 46% of software development companies name the lack of skills of their in-house teams as the main reason for outsourcing. Thanks to nearshoring, you can compensate for the lack of skills required for your project by looking for software engineers outside your local area.
Reasons for outsourcing IT services
If you need an expertise, say, in the security domain but find it challenging to find such specialists in your region, you can outsource to Ukraine or Czech Republic, where it’s not a problem to recruit such specialists. This way, you save precious time by finding a talent you need without much hassle.
What model to choose when partnering with a nearshore company
When outsourcing to a nearshore company, you’ll be faced with a choice between three main engagement models: team augmentation, project-based outsourcing, and dedicated teams. Let’s discuss their advantages and disadvantages, so you could pick the right model for your project.
Team augmentation means that you expand your in-house teams with one or several workers. One of the main advantages of the following engagement model is that you can personally handpick the candidates to make sure they’re the perfect fit for your project. While your partner is busy with handling all administrative tasks, you can manage your extended team like your in-house SaaS teams.
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Project outsourcing
Project outsourcing is the practice of delegating the full control over SaaS development to an outsourcing partner. Under this model, you won’t have to bring much to the table – everything, from the recruitment process to team management, falls on your service provider’s shoulders. Since you won’t have frequent calls with your outsourcing partner, you need to make sure that you choose a reliable company that has solid expertise in managing projects and takes all necessary measures to ensure security.
Dedicated teams presupposes that you hire a team that is fully committed to your business and project. Team members are selected according to your specific needs, ready to cooperate with you on the long-term basis. Unlike team augmentation, it’s not uncommon for this model that the project manager is typically on the nearshore SaaS provider’s side.
Useful tips for effective nearshore SaaS development
Once you see an opportunity in nearshore software development outsourcing, you might wonder how you can make the move yet stay out of the woods. We’ve compiled a list of useful recommendations to refer to when choosing a nearshore software company.
Define clear goals and objectives
Before starting any relationships, you need to take time to jot down specific and measurable goals and objectives. To do it right, you need to cooperate with other stakeholders, so all of you can stay on the same page. In such a way, your nearshore partner will understand what needs to be done, in what order, and in what timeframe.
Besides, by defining clear objectives, you’ll be able to better filter out service providers that don’t live up to your expectations. Having the list with all your goals can help you understand whether a nearshore company has enough expertise and resources to attain your vision.
Double check a company’s expertise and experience
The next step would be checking whether the company you’re planning to cooperate with has the necessary experience and skills to provide you with high-quality SaaS. It’s vital to make sure that the potential partner has experience working with your industry.
While scrolling through a portfolio is always a good idea, it’s not enough to form an opinion about the company. Everyone says good things about themselves on their website, but that doesn’t necessarily mean that the software company is trustworthy and can handle your tasks. Plus, sometimes clients may not find their niche in the portfolio and assume that the agency lacks expertise in the area. In reality, there are many projects that are under the non-disclosure agreement, which doesn’t allow the service provider to showcase its achievements.
To address the challenges mentioned, we highly recommend you to double check the company’s expertise by visiting Clutch, an awesome website with ratings and reviews on software development companies. We at JatApp are proud to say that our rating there is rather high (4.9 stars out of 5). By reading reviews, you’ll get the full picture of how we manage SaaS projects and meet tech stack needs.
Pick a nearshore company that lives and breathes Agile
We cannot stress enough how important it is to make sure that a service provider knows how to deliver a project on time and within budget. That’s why many trustworthy software development companies choose the Agile approach over other project management methodologies. This allows SaaS teams to break down the development process into short sprints, which makes it easier for a project manager to understand how well the team is progressing and allocate resources accordingly.
In addition, the main benefit of the Agile methodology is flexibility. The project objectives are not set in stone, so that you can change the requirements to respond to the changing SaaS market demands.
Last but not least, think about cybersecurity
As obvious as it may sound, ensuring cybersecurity should be one of the primary concerns in any SaaS business. Nearly 80% of IT leaders believe that their company lacks proper cybersecurity. In order not to get into this percentage, you should put extra effort to make sure that your potential partner meets all industry security standards and works in alignment with compliance requirements and regulations. For example, you might want to check if the service provider has the SOC 2 Type II audit to see whether the company takes necessary precautions to protect customer data.
Choose JatApp for nearshore SaaS development
All in all, there’s no one right answer when it comes to outsourcing software development. If you feel that communication between teams is extremely important to your project and have a budget on top of your mind, then nearshoring might be a good choice for you. When looking for a nearshoring partner, make sure it’s a reliable company that prioritizes security and has necessary skills to handle your tasks.
JatApp has been delivering software products for seven years now and has more than 200 projects behind its back. Most of these projects are, in fact, SaaS solutions. What’s more, we have been recognized as one of the top 1,000 outsourcing companies in the whole world. If we wowed you with our expertise, we’ve got some good news for you. We’re open for collaboration with ambitious SaaS startups and well-established companies that consider nearshoring.
If you want to partner with us, leave us a message and our team will contact you as early as possible.
