With greater frequency US enterprises are partnering with third-party development resources, like Daitan Group, that provide high-value nearshore services. In our experience, companies not only want us for support and development of their existing technologies, cloud services and applications, but also for the design, development and execution of innovative, next generation digital transformation projects— projects they often regard as key to their future growth.

As a recent report by Forrester explains, there are a couple key drivers causing this shift back to onshore/nearshore providers. First, the growing transformation of the enterprise toward Digital Business. “By 2020, more than seven billion people and businesses, and at least 30 billion devices, will be connected to the Internet. With people, businesses and things communicating, transacting, and even negotiating with each other, a new world comes into being – the world of Digital Business.”—Jorge Lopez, Gartner Research, Forbes 2014.

This movement affects virtually all business functions and industries, which in turn, is transforming how companies operate, develop technology and measure benchmarks of success. The second driver has been the poor quality and bad experiences felt by companies as a result of moving to offshore (think farshore) partners. The pain of those bad experiences is bringing development outsourcing back to onshore/nearshore providers. So let’s get into the study’s detail, and cite a few relevant data points Forrester’s research reveals.

What Role IT Executives See for Third Party Development Providers

The mindset among enterprise executives has shifted. Forrester’s research categorized projects into four groups: customer engagement, organizational transformation, application development and, data and analytics. Across all four categories, at least half the respondents said, “Digital transformation projects are best suited for onshore/nearshore providers.” So, as the world increasingly digitally connects, business IT executives recognize using onshore/nearshore development partners are a critical success factor when implementing strategies for digital transformation.

What underpins this shift? Plain and simple, offshoring (think farshore) produced late projects, low quality, high management overhead and rework and poor project experience. Forrester reveals: Given the perception that onshore/nearshore services providers provide better quality, it’s not surprising that 65% of those using offshore services — either primarily or in combination with onshore services — have shifted work previously completed offshore to an onshore/nearshore provider. Nearly half cited security concerns as the main reason, but late projects, poor communication, poor quality, and diminishing cost advantage also factored into the decision to bring offshore work back.

Key Competencies of Outsourced Development Providers

It’s interesting that what the respondents identify as key competencies correlate to what we hear from our own customers —Qualified Personnel who can understand, manage and lead projects, Clear Understanding of Requirements and Industry, Quality Scalable Architecture, High-Quality Code and Deliverable, Frequent & Clear Communication, and Agile Development and Reliable Delivery all leading to the net result of Reduced Risk and Faster Time to Market.

Key competencies of a good outsourcing partner correlate to what we hear from our own customers: Qualified Personnel, High-Quality Code and Deliverables, Frequent Communication,  Agile Development, and Reliable Delivery.

At Daitan we work every day with our customers (shoulder to shoulder) to live to those expectations with every project. We work together to solve challenging technical problems, many of which have not been solved before, in Communications & Messaging, Cloud Services & Virtualization, Big Data & Analytics. These projects become tomorrow’s innovations and our customer’s business success.

It’s apparent from the answers provided by the IT executives responding to Forrester, that in today’s connected world it’s critical to get it right when choosing an outsource development partner. At Daitan, we understand the complexity of bringing high-quality technology products to market, and accelerating development cycles to meet growing business needs.

Outsourcing has come to be seen as a necessary evil, but it certainly can be a strategic advantage for companies when the right partner is found. Since 2004, we have helped many companies meet their challenges and successfully execute on their technology and business initiatives. So if you’re looking to augment your engineering team and accelerate product development, take a look at Daitan Group. Contact us if you have questions, or would like to hear more about how Daitan works as the the strategic outsourcing partner for many global companies.

If you’re interested in learning more outsourcing to address your company’s product and software development needs, then take a look at the White Paper below. Download this whitepaper to learn more about outsourcing product development.

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