How Software Outsourcing Practices Are Changing in 2023

Time and Material contract for Agile Software Development

When outsourcing software development, it’s natural to want to control costs as much as possible. Fixed price contracts and budgets set in stone might seem like the best ways to do that. 

However, software development is most often an evolutionary process. Without a working crystal ball to accurately predict the project scope and duration of a project, a fixed-price contract is rarely your best option.

Even if you do think you know enough about the project, building an app from scratch means you will be devoting a lot of time to hammering out every detail at the beginning of a project. As such, companies attempting to cut their time to market with a minimum viable product (MVP) are penalizing themselves early on with an overly detailed scope of work. 

Plus, once the plan is in motion, it’s very difficult to change direction without upsetting the strict pricing model. Deviating from the original scope of the fixed price model usually requires scrapping everything and starting back at square one. In short, every change in the development process will cost the company dearly, while also giving competitors a significant opportunity to beat them to the punch. 

Time and materials contracts increase the flexibility of a project while ensuring development teams are paid fairly for their work. This article will go over why Time and Materials (T&M) contracts are the best way to keep development projects viable and relevant in changing market conditions.

Why Not Use a Fixed Price Contract?

Fixed price contracts are as inflexible as T&M contracts are flexible. Investing heavily in a detailed scope will delay your time to market, and any changes will mean revisiting the drawing board with more meetings, wasted documentation, and redrawing of contracts. 

Team augmentation under a fixed-price contract introduces further challenges. The software vendor wants to maximize profits by using as few man-hours as possible. 

On the other hand, the vendor is not as concerned about time to completion because they want the best quality product. Man-hours do not add to the project’s costs, so it’s difficult for developers and vendors to get on the same page under these conditions. 

What are Time and Materials Contracts?

A time and materials contract is the opposite of the traditional fixed price contract. It’s based on the need for software projects to remain flexible. The volume of work, design changes, and implementation of new features are all within the realms of possibility with T&M contracts. 

Developers are paid for the time in hours they spend on a project, negating the need to go back to the drawing board when the scope changes or new features need to be added. Strategies are free to evolve, and decisions can be made on the fly. These features make a T&M contract the perfect match for quickly getting a minimum viable product to market.

Time and Materials Contracts Increase Flexibility (Agile Development)

Time and materials contracts partner well with an agile process model. Agile development approaches break projects into iterations using small, autonomous teams not involved in long-term planning. Project scopes and requirements are determined at the start of the project, and each iteration is a “frame” of time, usually between one and four weeks. 

The agile model in conjunction with a time and materials contract gives development teams the advantage of flexibility because it’s based on the premise that project requirements almost always change and evolve. 

Agile development makes it relatively straightforward to add, remove, or improve features even in the more advanced stages of the project. 

You can start with the basic core, or MVP, of the project. When you get the core components of a working product to market early and start earning revenue, you can adjust the requirements and key features as more information about what the market needs become available. 

Naturally, agile projects are created in short sprints, starting with the MVP and then testing to ensure all business requirements are being met. Detailed progress reports and analyses verify the development team’s work.  

Tracking outcomes at every stage enables development teams to add improvements and adjust their approach on the fly.

Time and Materials Contract: Getting it Right

A T&M contract will not eliminate all the risks and challenges you will face. Here’s how to make sure your project will stay on track when using a time and materials contract. 

Choosing a Development Partner

Time and materials contracts using agile development processes require constant vigilance on workflow. When selecting remote engineers, you want expertise that matches the skills required for the project. 

You should also know something about the team’s history in handling budgets, project scopes, communication channels, and how they track the progress and effectiveness of the project. 

Selecting the right partner will be a key factor in the success of your project, so make sure you thoroughly review their track record, so you know you are working with a trustworthy team. 

Create the Best Team for the Job

Whether your company possesses all the skills under one roof or offshore team augmentation hiring remote engineers is a component of your development strategy, building the best team for the job is critical to the success of the project. 

Agile development projects work best with small teams because it helps to eliminate communication issues and documentation bottlenecks. 

Develop Project Frames and Estimate Costs

Agile and time and materials contracts are the most efficient methods for software development, but you still need some idea of the scope and budget of the project. Frames provide project scope that remote engineers can use to estimate the number of sprints required and calculate an estimated cost. 

Engage Regularly with Your Remote Engineers

Even with the best onsite developers and remote engineers, you will need to be involved with the project. Lack of communication has been the demise of many software projects, so regular meetings are critical. 

Team augmentation using a remote workforce often means some of your development team will be offshore or live in different time zones. You will need to plan your communication strategy to accommodate the difference in working hours.

Manage Your Project with The Flexibility of T&M

Time and materials contracts allow developers and remote engineers to quickly get on the same page, with both parties working towards a quality product rather than a limited time and budget.

The increased requirement for detailed management may be time-consuming, but the development of a product that meets all expectations of the end users guarantees the continued viability of the project.

Are You Ready to Start Building your Project? 

Are you searching for a reliable development partner who can augment your team with highly qualified remote engineers? Towa Software has tailored, affordable solutions and the right skills to get your software project off to a flying start.

About Towa

Towa is a leading firm across the United States and Mexico for software engineering and outsourcing, including QA and testing. We offer from Mexico our over +300 engineers capabilities as nearshore delivery model service offerings.

Towa Software has over 20 years of experience to guarantee the quality of every line of code, we are proud of our products and services delivered.

As a leading software development outsourcing company in the USA and Mexico, we have extensive experience in many fields including fintech, banking, payments gateways, e-commerce, retail, marketplaces, health care, Omnichannel, and many more.

You can contact us at support@towasoftware.com or give us a call via (+1) 210-787-4525 for more information.

Starting small and build trust with your provider before scaling. 

You can Book a 15-min call call with one of our Customer Success Managers for a conversation.

Mexico is the best country for nearshore software outsourcing for many reasons. For one, Mexico has a robust educational system, which means that they can produce the same quality of work as anyone would find in any other country – but at a lower overall cost. This blog explores why Mexico is the leading country for nearshore software outsourcing and staff augmentation.

Mexico is Nearshore Outsourcing’s Top Choice

Mexico has a well-educated workforce, competitive price points for software development, and time zones that work well with USA and Canada. It is also a country that has experienced amazing growth in recent years in the IT sector.

Benefits of Mexico for Nearshore Outsourcing

When it comes to nearshore software outsourcing, Mexico is the chosen destination. The country’s proximity to the U.S., its knowledgeable workforce, and favorable government policies make it an ideal locale. It has a growing English-speaking population with good core values, strong work ethic, top talent, and eagerness to learn more technical skills, making it one of the most reliable outsourcing and team augmentation.

Technology Hubs in Mexico

Mexico is a perfect place for nearshore software outsourcing. They have a ton of technology centers that are ready to take on any project. Mexico City, Guadalajara and Monterrey are top destinations for landing a remote team. These delivery centers have a high level of expertise and can do anything from ideas to design to programming. 

They also have excellent infrastructure that includes reliable power, internet, transportation, and other essentials needed for a great office workspace. Most of the population speaks at least some level of English.

Top Talent Pool for Software Engineers

Mexico has a very talented pool of software engineers and is a highly competitive market. They have a lot of technical schools that graduate high-quality engineers and programmers to work for nearshore software development firms.

Nowadays, you can find top software engineers in any major city and other towns all around Mexico. With the right partner, you can land, build and scale a tech team in weeks, having 20 years in the market Towa is great sourcing of top software engineers.

More Facts About Mexico Tech Talent

There are many reasons why Mexico is the top country for nearshore software outsourcing. One of those reasons is the high level of talent and technical skills in the country. 

Another reason is that operations and IT expenses will be significantly lower than if outsourced to another region. Companies can also benefit from a broad array of tax incentives and an extremely favorable currency exchange rate.

Conclusion

Mexico is a great place to invest in nearshore software development. Find a tech partner that knows the market, and with extensive experience in building tech teams in your industry. Ask for use cases and don’t be afraid to ask for a blended rate for team augmentation. 

There are many opportunities and benefits that companies gain from nearshore outsourcing and staff augmentation for top software engineers. Compare rates and skills to validate your competitive advantage to deliver more products. 

About Towa

Towa is a leading firm across the United States and Mexico for software engineering and outsourcing, including QA and testing. We offer from Mexico our over +300 engineers capabilities as nearshore delivery model service offerings.

Towa Software has over 20 years of experience to guarantee the quality of every line of code, we are proud of our products and services delivered. We recommend starting small and building trust with your provider before scaling. 

As a leading software development outsourcing company in the USA and Mexico, we have extensive experience in many fields including fintech, banking, payments gateways, e-commerce, retail, marketplaces, health care, Omnichannel, and many more.

You can contact us at support@towasoftware.com or give us a call via (+1) 210-787-4525 for more information.

Starting small and build trust with your provider before scaling. 

You can Book a 15-min call call with one of our Customer Success Managers for a conversation.

How is an omnichannel contact center?

well, all communication channels (such as phone, SMS, online chat, and email) are connected and integrated to provide a seamless and integrated customer experience. Omnichannel contact centers let agents switch between channels, without losing context from customer interactions across all other channels.

The Difference Between Omnichannel and Multichannel

The terms multichannel and omnichannel are often confused. Many companies say they offer omnichannel communications when what they really have is a multichannel approach. In fact, delivering an omnichannel communication experience was ranked as the second biggest challenge businesses face in their contact centers in a recent consumer communications report.

Companies that connect with customers in their contact center via multiple channels – such as email, social media, web chat, and telephone – have a multichannel contact center. However, just because customers connect with your contact center via multiple channels does not mean that their experience is seamless.

An agent who connects with a customer in a multichannel contact center by phone may not have any information about that customer’s previous interactions on another channel. Often in a multichannel contact center channels are siloed — agents can’t see the context from interactions customers had on other channels on their contact center dashboard, which limits the level of service they can provide.

Giving your customers the ability to seamlessly switch between channels is what takes your customer journey to a whole new level. The omnichannel experience lets agents follow a customer conversation wherever it goes, without being boxed into one channel or spread across dozens of tabs. For example, when your customer can begin with a chat session on your website and then roll that chat into a video co-browse session or voice call with your agent, that customer is receiving personalized, quality service. This kind of seamless interaction across technologies is the key to great omnichannel experiences.

The Omnichannel Customer Journey

The literal translation of omni is all. An omnichannel contact center isn’t necessarily operating on every possible channel of communication (and in today’s technology landscape, these are constantly changing anyway), but all of the channels it does operate on are connected to provide continuity and personalized customer service. In an omnichannel contact center, agents see the entire customer journey through real-time dashboards. They can look at trends over time and by channel while tracking the metrics that matter to the business.

Omnichannel dashboards are customized to the specific needs of each business and integrated with the organization’s CRM and other relevant data. The visibility businesses gain from an omnichannel dashboard, along with extensive reporting and analytics, takes the mystery out of the customer journey. According to research from Aberdeen, companies that provide an omnichannel customer experience achieve a 91% higher year-over-year increase in customer retention compared to organizations that don’t.

Choosing an Omnichannel Platform

Integrating omnichannel communications and seamless context throughout the customer journey—especially in a complex environment like a contact center—requires the right infrastructure. Omnichannel is very difficult to achieve with “out-of-the-box” contact centers. Any system requiring a lengthy installation process, limited features, and restricted integration with other platforms will not provide the agility needed to deliver an excellent customer experience in an omnichannel world.

When choosing an omnichannel contact center solution, look for a single interface for multiple channels — SMS, phone calls, in-app chat, email, messaging apps, and more — to save you the effort of maintaining separate integrations. You want to add new channels to your contact center as they become popular and create custom channels easily. Make sure the solution gives you complete ownership of your customer interaction data across all channels while providing a single omnichannel desktop to set your agents up for success.

Twilio APIs, such as Programmable Voice, Programmable SMS, Programmable Video, Programmable Chat, and the Twilio API for WhatsApp, are architected at every layer for handling an omnichannel system. They can deliver an excellent omnichannel customer experience, step by step.

We at Towa are Twilio’s expert implementation and consulting partner in USA and Mexico, we can build a PoC in 2-4 weeks and have that ROI and business case ready to roll out the solution. 

There are plenty of use cases for customer services, both external customers as well, as internal users of the company. The customer experience will thrive and user satisfaction will sky rocket when you have a consistent experience in all your channels.

Reach out to start building an amazing customer experience.

As a leading software development in United States and Mexico, we have huge experiences in many fields including e-commerce, marketplace platform, fintech, payments, banking, retail and many more.

You can contact us at support@towasoftware.com or via +1 (210) 787 4525 for more information.

Don’t hesitate to book a 15-min zoom call

So we all know about Offshore software development teams, they can be found abroad, usually foreign countries on the other side of the world.

Current technology enable collaboration of teams, everyone works remotely now so it is easier to outsource skills and engineers to help you build your product or service faster, at lesser cost than building a tech team locally.

Mexico, Colombia, Argentina, Chile all have cities with technology hubs where your company can find the right skills and engineering techniques for your project.

Many companies and startups find that outsourcing software development offers more benefits than hiring developers in-house or locally, mainly because today’s most demanded skills are related to computer sciences and there are certain IT skills that are hard to find, so the costs rise up, and there are no guarantees.

When researching a place to outsource, there are basically four types of IT outsourcing to consider: locally, onshore, nearshore or offshore?

So, which is the best option for outsourcing tech teams for your business?

Hiring locally, Onshore, Nearshore, etc?

There are pros and cons to all of them. So it’s important to define what are the main differences between them. To determine which options of IT outsourcing is the best for your company.

• Onshore or nearshore means that outsourcing software development is located in the same countryor region and have similar and compatible timezones.
• Offshore indicates that the company you hired is in another country with a different time zone, maybe 12 hours.
• Hiring locally can be expensive, and some skills required are hard to find.

The awesome about today’s technology is that. There is no need for an in-house team. Instead, you can find the right partner to help you build and scale a tech team, both onshore or nearshore, outsource in a neighborhood country.

Onshore Tech Teams

Onshore is often known as local outsourcing. In this option of software development service, a company has the opportunity to focus on its core business capabilities.

While quality is ensured, the required work is still done in a connected manner, with regular or daily meetings.

Your dedicated team will speak the same language. Onshore and nearshore outsourcing offers some benefits:

• No language barriers or many cultural similarities.
• Timezones are the same, or have many compatible 9 am to 5 pm labor hours.
• Constant communication, daily meetings and same day responses.
• An onshore development team is easy to nail and scale.
• Less expensive labor than locally

Nearshore Tech Teams

Nearshore software development is consider to be between onshore and offshore.

Nearshoring is when the team is located close to your company headquarters, perhaps in a neighbor country (Canada or Mexico)

Nearshore outsourcing has similar benefits to onshore and is far better option than what offshore can offer.

Weather you choose a nearshore or onshore partner company to build your tech team, the pool of talent is exponentially larger and labor costs can be reduced.

In addition, there are other advantages for nearshore tech teams:

• Time zone are mostly the same or lightly different.
• Many Latam countries share cultural or lenguaje similairies.
• Being more able to travel, if you really need to.

Most of the time. it would probably be a little higher cost than offshoring your tech team, but it is many times less riskier and more likely to success when you hire a manage tech team in a neighbor country like Mexico.

Onshore Tech Team: What you need to know?

Onshore tech teams are located in Mexico, in cities with the top talent coming from best Universities in the country.

An Onshore tech team can maximize a successful business with quality, engineering and technology at a lower cost.

From Onshoring a Tech Team, both parties benefit from the partnership.

Advantages of Onshoring a Tech Team

Some potential benefits of an offshore software development team:

• The project accesses a larger pool of talent
• Hiring a top talent for you team at lower costs
• Dedicated Tech teams can handle your technology services
• If you find the right partner to build your Tech Team for your company, they can assure to deliver and meet deadlines

Disadvantages of Onshore a Tech Team

There are some risks if you outsource your technology. While planning to hire a dedicated team, you need to consider the following:

• Watch for similar time-zone , the less difference the better.
• Transfering too much critical activity too fast.
• Analyize the working culture of the neighbor country
• Find partners that is located in a 3 to 4 hour flight to visit the production team, even that now almost everyone works remotely from homeoffice.
• See for cultural values like accountability, hierarchy, scheduling, responsibility.

Talk to us to evaluate our company skills to help your business build a successful technology core competency.

As a leading software development in United States and Mexico, we have huge experiences in many fields including e-commerce, marketplace platform, fintech, payments, banking, retail and many more.

You can contact us at support@towasoftware.com or via +1 (210) 787 4525 for more information.

Don’t hesitate to contact us.