Real Case: The best approach on hiring a nearshore IT team by a Dutch bespoke insurance company

Choosing an outsourcing partner is an incredibly important step for every business. Picking the right one is key to company performance and overall revenue. Nearshoring software development can significantly decrease the overall cost of your business. But at the same time, if it’s not done right, you run the risks of decreasing product quality, lowering customer satisfaction and losing out on revenue. 

To help you avoid that, I’ve gathered as much information as I could on successful outsourcing partnerships, their work and proper selection criteria. I will describe a very clear and thorough methodology for choosing a nearshoring partner, combining almost every best practice I have witnessed during my 10 years of experience in the industry.

Learn from someone who has already done it right

I’ll share the methodology that a Netherlands-based bespoke insurance company used when they needed help building their digital products. The process brought them to us – a nearshore custom software company based in Sofia.  Here’s what Martijn Burger, Paston’s co-founder, says about why they needed to find a nearshore partner:

“It was more of a necessity as we couldn’t find any decent people in the Netherlands. But even if we could, I would definitely not change anything. I really like that I don’t have to worry too much about all the stuff about how to keep people motivated, etc..”

How did they find their partner – with whom they work now for more than a year? What was the process they followed to minimize risks? The answers are below.

The process for choosing the right company

It all started with a simple filter – the partner company had to be in Eastern Europe due to its proximity to the Netherlands and cultural similarities compared to some Asian countries.

Moreover, some of the Eastern European countries are members of the European Union, which makes them comply with the same data security standards as the Western world. Other benefits include:

1. Good education in mathematics, physics, and informatics
2. Great English language skills
3. Curiosity and a caring attitude

The next step was to find the cities with the best technical universities and make a list of companies there. Having good technical universities means that people will have the necessary basic skills – logical & critical thinking, great math knowledge and a grasp of the main programming concepts. This education makes it easier to become greatly skilled in programming languages like Java, Javascript or Swift, which you might need.

Once they had the list, they filtered results based on relevant technology skills. Paston finally shortlisted nearshoring providers based on tech stack, programming languages and the core focus of the project. Afterward, a trusted employee carefully reviewed each provider’s website and web presence. A good site is indicative of high standards and work quality. Their online presence can also be telling. If they produce informative, quality content that’s often reshared, that means they’re experts at the subject matter. 

The next step was to contact the shortlisted companies through email. Those who replied and showed interest were asked for an introductory Skype call. Through such a video call, you can see and feel the people on the other end. Nonverbal communication is essential, and seeing your potential partner enables you to make a more educated decision about their credibility. During the call, they gathered basic info, such as company size, expertise, talent availability and culture. At the end of the call, they asked for references, which they’d later contact.  

Afterward, you should schedule a second call to test the technical, process and delivery expertise. The interviewed company has to present code they have written on previous projects, showcase any related industry domain knowledge and prove their skills in process management and agile methodologies like Scrum. The technical call could last up to 2 hours. You can dive deep into architectural knowledge, high level design, testing, database skills, etc. At the end, you must know whether these are the people that can do the work based on their technical skills.

After the second call, the list was shortened to 3 companies in 3 different countries and Paston scheduled visit arrangements. The purpose of the visit was to meet management and the team, feel the vibe of the potential partner and bond in person. Emotional connection is vital in business partnerships. It creates trust and security, and boosts the overall mood. Once the face-to-face meeting was a fact, the day passed in a long meeting with the management, then with the potential development team, followed by shorter meetings with each team member.

In the end, they chose Dreamix, even though our rates were higher than the rest. It was the bond, superior tech expertise and optimized delivery process that won Paston over. There’s a proverb saying “I’m not rich enough to buy cheap goods” and when it comes to building long-lasting partnerships, it holds true. If you’re in it for the long run, quality and building a relationship is way more important than money. You’ll spend almost every day with these new people and depend on their expertise to build a product that will bring revenue.

To ensure quality, the initial contract had a three months trial period, during which Paston could terminate it with a day notice. Having such a contract is better for both parties as they both get to explore whether the partnership fits their individual needs.

In summary, the steps are:

1. Filter based on important criteria to you – proximity, cultural similarities, expertise, university ranking in the area
2. Evaluate website quality and core expertise
3. Approach the companies
4. Set up an introductory call and ask for references
5. Call the references
6. Second call about expectations,  deep dive into the delivery expertise of the potential partner
7. Onsite visit
8. Selection with a trial period

Hope the above will help you out in selecting the right nearshore partner. Do you have a different methodology that works? Please share!