Top Risks in Nearshore Software Development Projects in Latin America: How to Mitigate Them and Hire LATAM Developers with Confidence
Nearshoring offers numerous benefits, such as faster project turnaround times, better communication compared to offshore outsourcing alternatives, improved collaboration, lower costs, and access to specialized skills. Latin American countries such as Brazil, Colombia, Mexico, and Argentina are popular choices for nearshore software development projects due to their proximity to the United States, highly-skilled labor force, and favorable cost structures. However, a few risks associated with nearshore software development projects must be addressed for companies to hire LATAM developers successfully. This article explores some of the most significant risks related to outsourcing software development to Latin America and how to mitigate them.
Top 3 risks when outsourcing LATAM developers
By Deloitte, 72% of respondents reported experiencing a security breach due to a third-party vendor. These breaches can occur due to inadequate security protocols, employee training, lack of access controls, or human error. Organizations should establish security requirements and expectations for third-party nearshore software development agencies and independent contractors.
Legal & Intellectual property risks.
Unsurprisingly, intellectual property risks are involved in any nearshore software development projects. After all, it comes with the IT territory! There's always a chance of your intellectual rights being endangered and your property being used without permission. But a recent survey by PwC found that 56% of companies have experienced legal or regulatory issues with their outsourcing partners in the past beyond intellectual property risks. These issues can take many forms, such as breaches of contract, data privacy violations, labor disputes, and non-compliance with local laws and regulations.
Poor communication risks.
While annoying, communication is a significant risk when outsourcing. A KPMG survey found that 68% of outsourcing relationships fail due to communication issues, so it's best to take these risks seriously. Time zone differences, lack of proper team management software, or inefficient leadership can cause them.
Five ways to start mitigating risks in nearshore software development projects in Latin America
Regular quality checks.
To avoid risking the quality of your software products being much lower than expected, it's essential to establish clear quality standards and expectations from the start of any nearshore development project. The outsourced development team should know the quality standards and ensure they are adhered to throughout the project. Your company's in-house staff should also conduct regular quality checks to ensure the project meets the client's expectations to avoid unnecessary nearshore development risks.
Develop a comprehensive risk management plan.
A risk management plan includes
- the identification of potential risks,
- an assessment of the likelihood and impact of those risks, and
- the development of strategies to mitigate them.
A few ways to identify potential nearshore software development risks involve conducting a thorough assessment to identify anything that could negatively impact the organization. It should include internal and external factors that could affect the organization, such as economic, political, social, and technological factors. Once potential risks have been identified, the next step is to assess their likelihood and impact. The analysis should be based on contextually relevant data to ensure that it's accurate and comprehensive for your risk-management team. We recommend working with a dedicated software development agency to create an extensive risk management plan with the help of industry experts.
Establish clear communication channels.
Effective communication is the key to successful nearshore software development projects. To mitigate communication barriers and related risks, ensure the team members are proficient in the language. The project manager should also be aware of cultural differences and ensure the team members understand each member's cultural nuances. An Agile development team leader should establish clear communication channels and regularly update the team members.
Nurture a culture of security risks awareness.
A culture of risk awareness means that all employees understand the importance of identifying and mitigating risks and are actively engaged in this process. Awareness can be achieved by providing extensive training on risk management and encouraging all outsourced developers to proactively identify and report potential trouble spots - from security and intellectual property to communication and team dynamics. Providing workshops or seminars on risk management, as well as online courses and materials, should be enough to get started with mitigating risks in nearshore software development projects.
Prioritize a system of accountability.
Establishing a system of accountability is essential for any organization, institution, or society to ensure that risks are appropriately managed, and individuals are held responsible for their actions. Your company can do this by creating policies and procedures that set out the consequences for failing to work risks properly, including disciplinary action or other forms of accountability. The first step is to define roles and responsibilities for managing risks, including identifying who is responsible for identifying, assessing, mitigating, and monitoring risks within the organization. Assigning roles to specific individuals or teams and creating transparent processes - including giving regular feedback to nearshore developers - for managing risks across the organization are some ways to go about it.
Ready to hire LATAM developers risk-free?
Mitigating risks in nearshore software development is all about choosing the right way to start outsourcing LATAM developers. Businesses should consider their nearshore outsourcing choices by evaluating possible partners' technical capabilities and cultural fit and creating best practices for employing nearshore developers. These simple precautions can help you assure effective, risk-free nearshore software development projects and hire developers in Latin America and the rest of the world stress-free.
At Framework Science, we want to ensure you hire the right LATAM developers for your team with absolute transparency and accountability. After years of dedicating ourselves to connecting the best Latin American talent with companies looking to develop innovative projects, we continue to refine our technical vetting process and help you hire developers faster. Our unique industry-first Nearshore Staff Augmentation AI-driven SaaS Platform takes care of every detail, from interviewing to onboarding, and provides ongoing support to the client and the candidate. As we only hire from a selected pool of trusted IT professionals, there are no risks in engaging with us. Contact us to learn more about our IT staff augmentation services!