Why digital technologies encourage businesses to look to nearshore agile innovation

Organisations continue to face greater challenges caused by the explosion in digital technologies. In particular, the speed of business and technological change is relentless, while customer expectations are higher than ever. Alex Robbio, president and co-founder of Belatrix Software, explains why nearshore agile innovation represents a powerful proposition to organisations during this time of digital disruption.

Digital technology has transformed the perception of value. Expectations are higher than ever before, as customers seek personalised, always-on services regardless of location, activity or even device. But at the same time, there is a disjuncture between customer expectations and the ability of organisations to satisfy, let alone exceed, them. All of this is exacerbated by the increasing speed of business.

To give a sense of this speed of change, in fewer than 24 hours after Apple released iOS 8, 20% adoption was achieved - this was actually slower than for iOS 7, where 38% of users downloaded it inside 24 hours. Amazon makes software changes every 11 seconds, meaning it can respond in magnitudes faster than competitors to changes in business conditions. Outside of the technology industry, digitally native organisations are causing upheaval in a broad variety of industries with their nimbleness and ability to move rapidly. Tesla, for example, can immediately deliver updates and repairs to its cars via the internet.

The question is: do you have the capabilities to respond that quickly? And if you do, do you simultaneously have the ability to develop and prototype new, creative ideas, or are you constantly on the back foot responding to changes as they happen?

The solution for many companies is to look to the powerful combination of 'agile' software development and working with nearshore partners.

Creativity and real-time innovation drives interest in 'nearshore agile'

In PWC's 2015 survey of 1,300 global CEOs, 81% stated that they are looking for a broader range of skills than in the past. Meanwhile, the same survey found that access to new and emerging technologies was the number-one reason to look for partners. It is this powerful amalgamation of the need for talent and finding the appropriate technical expertise that is driving companies to work with a broader array of partners.

At the same time, there is a related dynamic at play. Agile programming, for the uninitiated, is where small teams work closely together to produce a working prototype in two to three week 'sprints'. The emphasis is on delivering the most critical requirements first, and iteratively improving the product over a series of sprints. In a world where lowering time to market is a critical business priority in almost every industry, the allure and promise of agile is clear to see. Meanwhile, taking an iterative approach means there is a framework for incorporating stakeholder and customer feedback, and if necessary, changing direction during the product development process.

So we have two dynamics at play: an increasing need to partner for talent and capabilities, and a shift towards real-time, iterative and collaborative product development. Nearshore partners, located in a similar or close time zone, provide one solution. While companies may choose to develop everything in house, they will face challenges in finding the appropriate skills and capabilities to keep up with rapid technological change and simultaneous business demands for faster time to market. As a result, in other situations, companies will look for partners.

Agile nearshore innovation in action

One of Belatrix's most recent experiences was with a leading mobile financial services organisation that was looking to develop new ways for customers to access their cash from an ATM. The result was the development of a mobile application that could be used instead of a credit or debit card to quickly access cash - so-called 'cardless cash'. This creative concept was developed via close collaboration with a nearshore development team. The teams used two-week iterative cycles to ensure the development team
could take into account quick and immediate stakeholder feedback. The result was increased customer convenience (the time it took for customers to receive cash went from 40 seconds to ten seconds) and increased security (by lowering the risk of the skimming of credit cards).

Five steps to creating a nearshore agile innovation team

From Belatrix's experiences working with clients, such as with the above mobile financial provider, it recommends following five simple steps to create your own nearshore innovation team:

1. Keep the team size to 7-10 members: while the exact team size will depend on several of variables, ideally you'll want to keep the number low. If necessary, use multiple sub-teams rather than one larger team. As team sizes increase, so does the potential for conflict, less cohesion and less productivity.
2. Find the best talent, but remember the importance of culture: as already mentioned, talent is critical to responding to the wave of digital change, but it is equally important to develop an organisational culture that strives for excellence, and that challenges your best individuals and teams. In distributed teams, this means making sure the individuals you hire are well suited to collaborative work, and making sure they have communication skills and self-reliance. Work with specialised human-resource teams to identify these individuals.
3. Precisely define the methodology together with the partner: this article refers to agile, but this actually includes a range of different methodologies, such as behaviour-driven development and Kanban. When working with a partner, make sure it is clearly defined. In addition, well known methodologies, such as 'Scrum', can be modified depending on your exact circumstances and requirements.
4. Clearly outline the partner's roles and responsibilities as well as your own: noise and friction can quickly develop when roles and responsibilities are not clearly defined. The process starts by knowing the skills needed, and identifying the profiles of individuals that match these skills together with your partner. For example, do your quality assurance capabilities include a broad range of skills and competencies (such as automation, performance, security and metrics)? If not, work with your partner to identify what you need.
5. Put in place clear practices for communication for team members: effective communication does not just happen, but rather needs to be proactively addressed. While email remains ubiquitous, it often slows down communication. The use of instant messaging, video conferencing and screen-sharing all contribute to faster, more effective communication.