Offshore and Nearshore Software Development Trends for 2020
BUSINESS | 22 Oct 2019
There’s no doubt about it, offshore software development is a fast moving and exciting sector, offering companies big and small alike opportunities to expand, diversify and develop. And these opportunities are only growing. Both offshore and nearshore software development are becoming increasingly popular and changing fast to meet rapidly evolving market demands.
In this blog we discuss the big changes we expect to see across the sectors in 2020.
Talent Sourcing Will Become the Main Driver for Offshore/Nearshore Software Development
At this moment in time, many organisations are still turning to offshore and nearshore development opportunities as a way of radically reducing costs and getting jobs delivered more cost effectively. This is unfortunate, and does more harm than good for the merits of the industry. Fortunately, perception and motivations are changing, and this progress is only set to continue.
In 2020, more businesses (both enterprise and VC backed startups) will be exploring remote talent in different countries as a means of talent acquisition and expansion. The term "Blended Workforce" is likely to become the norm among high growth businesses as they look to complement their already existing team with niche talent and hard to find skills that can boost the productivity of their internal workforce.
As talent becomes more scarce, demand will grow across the world. This growth combined with political instability (i.e. Brexit, US immigration policies etc.) making it more difficult to hire immigrant workers will increasingly force businesses to look abroad for talent alternatives.
The Outsourcing Model Will Transition to an ‘Outsharing’ Model
Many offshore/nearshore software development projects operate with a clear professional divide between vendor and supplier. External developers often act as a completely separate entity, enacting a project as per the vendor’s request.
While this dynamic will remain for many, there will be a major increase in partnerships where the external team is instead considered a direct extension of in-house resources. These teams will work and operate with the vendor’s own tools and talent in a much more integrated way.
As a result, this close relationship will enable suppliers to work with vendors on high priority core propositions, instead of just taking the tasks the in-house team don’t want to do.
Some offshore & nearshore vendors will take this integration one step further by taking equity in the ventures they collaborate on. In these situations, this will help to further solidify the closeness of the client-vendor relationship and ensures it’s in everyone’s best interest to make a success of the project.
Vendors Will Become Increasingly Specialised
It’s no secret, but offshore/nearshore software development teams are becoming increasingly specialised to meet the needs of niche markets, and this trend is set to grow!
By focusing on highly targeted technical areas, teams will increasingly customise and develop their capabilities to meet the needs of specific sectors within software development.
Where specialism was once split by the likes of web or mobile, developers are now fragmenting at an even more granular level, with teams specialising in AR/VR/IoT/AI/Big Data/Blockchain, etc. These specialties are becoming more complex by the day and so the demand for unique skill sets is expanding and making it hard for generalists to successfully meet market demands. Teams are choosing to either focus on a particular area or not cater to it at all due to the expertise and knowledge required to do it well.
New Upcoming Locations Will Offer High Quality Development Resources
Offshore software development opportunities are set to grow on a global scale with South America and Africa increasingly offering high quality development teams to rival those traditionally found in India and Eastern Europe.
As the market continues to globalise, competition will grow, making it that much more difficult for generalists to succeed. This will be the catalyst for many to specialise and differentiate by focusing on a single niche.
In 2020, the offshore/nearshore software development market will be more diverse than ever before, in terms of both the location of teams, and the skills/expertise that they can provide.
A global mindset shift is occurring as organisations increasingly look towards remote work opportunities and cross-border collaboration as standard. With new and improved tools at their disposal, companies are seeing the practical and commercial benefits of global collaboration more than ever, and this evolution is driving the industry forward.
‘The Future of Work’ is a hot topic right now and it foresees how businesses will increasingly maintain a small, dedicated team at the core, while leveraging partnership networks to deliver high quality output at scale. The company of the future is no longer bound by company walls or national borders and so employers are starting to source the very best talent, at the right price, irrespective of their location.
The centralised hierarchical office model has been the entrenched standard for decades, and so for many, it’s difficult to see what the alternative future of work could look like. Those who do see the opportunities and embrace external talent will undoubtedly reap the greatest benefits of the new global working economy.
High quality offshore/nearshore software development is only set to grow into the future as the industry evolves and diversifies. The increased demand for niche development skills combined with a growing focus on quality over cost, will see the industry expand and prosper like never before. All the signs point to a highly successful 2020 and beyond.
