offshoring and outsourcing

Access to Agile Engineering Talent Drives Social Networking Startup to Nearshore Software Development Services

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During the summer of 2011, the management team at ArmedZilla, a new social networking site focused on the U.S. Military community, needed to quickly scale their software engineering capacity. Targeting a winter launch, time was short to deliver a platform capable of linking nearly 30 million veterans, and men and women serving in the U.S. Military.

The team decided to nearly double the number of developers and increase their QA and testing capability. The founders looked to Latin America, selecting Avantica Technologies, one of the largest nearshore software engineering services companies. Eschewing Indian and Chinese outsourcers, ArmedZilla prioritized engineers who were in the same time zone, experienced working within a true Agile development model, and who could contribute immediately.

David Johnson, ArmedZilla founder and CEO, explained, “Our decision to work with Costa Rica-based Avantica Technologies was based on their ability to integrate their talented software developers and testers into our internal team. They were productive immediately, helping us meet our aggressive release goals.”

Indications point to this trend toward U.S. startups and Software 500 companies tapping software engineering services from Latin America continuing in 2012. Business drivers include increasing demand for unavailable local software development talent, Agile engineering standardization and time-zone alignment. Also contributing are persistent concerns with software IP protection in China, the high talent turnover and rising payroll costs in India.

Not enough developers to go around

The U.S. National Venture Capital Association in the first half of 2011 reported that 40 percent of the 130,000 open positions in Silicon Valley were for software engineers — social media, mobile and cloud computing companies drove that growth.

Austin’s inability to hire local software developers was bad enough by September, 2011 that the non-profit Austin Technology Council organized 25 area technology executives to fly to California in search of new talent. One of them, the CEO of social media management startup Spredfast, admitted there were just not enough good software developers to go around.

An intense national talent war is being waged for software engineers with critical skills in Silicon Valley, Austin; Seattle; Boulder, Colorado; and other tech centers including the Northeast. The supply of talent simply can’t keep up with demand. Specific skills needed include user interface design and development for cloud and mobile apps. Agile experience is a major plus among many startups, the Software 500 and even industry.

The research firm Forrester reported in late 2009, in a report co-authored by Dr. Dobbs titled “Agile Development: Mainstream Adoption Has Changed Agility,” that 35 percent of application development professionals surveyed confirmed that Agile most closely reflects their development process. The iterative, highly collaborative Agile-based approach to building software is now firmly in the mainstream.

Real-time collaboration is key to Agile development

Yet, because Agile is so collaborative, U.S. software companies first look for engineers who can collaborate within teams located in the same building, or at least nearby within the business ‘”campus.” Unable to find and hire developers quickly enough, and unwilling to jeopardize the release of critical new features or, worse, an initial product launch, many companies turn to remote, out-of-state contractors. If they can find them. Still others comprise further and engage distant outsourcers located multiple time zones away in India or China – with mixed results.

At Silicon Valley’s business day start of 9 a.m., it is already 10:30 p.m. in Bangalore and 1 a.m. in Beijing. An Austin-based software developer collaborating with his or her counterpart in Bangalore at 9 a.m. Central Time is tied to 8:30 p.m. In Beijing it’s late evening 11 p.m. For sure email, Skype, G-talk, Free Conference Call and other productivity tools make it easier to communicate.

However, effective Agile software engineering is about real-time collaboration throughout the process. The original Manifesto for Agile Software Development itself, published in 2001, states unequivocally:

Individuals and interactions over processes and tools. Two underlying principles of the Agile Manifesto are: Face-to-face conversation (co-location) is the best form of communication; and close, daily cooperation between business people and developers.

Latin America-based nearshore software engineering is an alternative more closely aligned with the Agile development intent. At 9 a.m. in Silicon Valley it is 11 a.m. in Costa Rica and noon in Peru, for example. Austin’s software developer is collaborating with his or her Costa Rica counterpart at the exact same time, and separated by only 60 minutes in Peru. The nearshore model also delivers very similar cultures – emphasizing self-organizing teams, not top-down hierarchical work – and measurably better talent retention.

The result is a highly focused internal software development and testing team located in the U.S. working collaboratively in real time with its nearshore partner across a distributed Agile model. The time overlap is optimized, contributing to quality software development.

The CEO of a leading provider of self-service email and event marketing, social media and other online services, ranked among the fastest growing companies in North America on Deloitte’s 2011 Technology Fast 500, explained it this way: “The developers and QA engineers we work with at our Latin America-based engineering services partner are deeply embedded and truly part of our team. Their engineers are quick to ramp up and a perfect cultural fit with our U.S.-based internal team – even cross-continental pair programming has proven to be a big success.”

As Lean software development, originating from proven Lean manufacturing, has gained converts, it is often compared to Agile. In recent years it has become more accepted within the Agile developer community. Among other principles, Lean emphasizes eliminating slow communication and delays in the software development process. This emphasis also aligns well with nearshore software engineering – same time zone, integrated communications. The vendor partner works the same hours as the customer, like a virtual team across the distributed Agile model. Proven Agile software development techniques can be used effectively.

Access to experienced, and available, Agile engineering talent in nearshore locations like Latin America is a trend that should continue in 2012. Whether the U.S. customer is an enterprise software company or large-scale Web application provider, the severe shortage of local software engineers should continue to drive interest in nearshore software engineering services. After all, when the internal software development team is “sprinting” and the outsourcing vendor in India or China is sleeping, real-time collaboration and progress can suffer.

John Hitchcock has over 20 years of experience in the software industry. Currently a director at Avantica Technologies, one of Latin America’s largest Nearshore software engineering services companies, for the past decade he’s managed teams in India, China and Eastern Europe. Earlier, John was head of U.S. and Central Europe field marketing for Cambridge Technology Partners, later acquired by Novell. He’s held leadership positions both at fast growing startups funded by Sequoia Capital and Austin Ventures, and the technology group of GE.

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