For the longest time, more cost effective labor in other countries has always attracted companies to try and manufacture their products there for a more economic way of doing things.
This is no different for software development. However, especially among developers, there was and still is some resistance with hiring outside help. But currently, due to corona, everyone is working remotely, so what does it matter if you are situated in a different country?
And this is what we are talking about on this episode: Onshore, nearshore or offshore: Are you unsure which one is right for you?
We are roasting Marshmallows with CTO Arjan Kolkman: how does he successfully outsource his development?
Rolf Suurd 0:08
All right, we are live Welcome to another episode of scout cast, my name is Raul suit, and I'll be your host. So for the longest time, more cost effective labor in other countries have always attracted companies to try and manufacture their products for a more economical way of doing things. And for software development is is no different hiring teams, for example, the Far East to build your product is happening to this very day. And, you know, developing software might look like producing a product, but it's, it's very different. It's not like you're going to mass produce a toy when you outsource your project to it Far East, or any other company that's going to develop it. So yeah, especially among developers, there was and still is some resistance with hiring outside help. And due to Corona nowadays, everyone is working remotely. So it doesn't even matter if if your team is situated in a different country or in a different city altogether. And this is what we are going to be talking about on this episode onshoring nearshoring offshoring, are you unsure which one is right for you? And we are roasting these marshmallows with Arielle cortman, CTO of contract here, and they are actually outsourcing their development at this very moment. So I am Welcome to the show. I'll introduce you to the to the listener right now. And after that, yeah, we can have this discussion. So again, you know, you started your career in digital TV broadcasting industry in 1995, after obtaining his master's in science in computation from the University of Manchester. And during his career, he worked as a team lead slash software development manager and he was CTO for companies in the broadcasting and medical industry. He started two companies, one in the broadcasting space and one in the medical space, of which one he has sold, and the other one still trades.
Having lived in several countries, South Africa, the UK, Belgium and worked on every continent except Antarctica. He eventually settled in a town where he went through high school, currently working at convect, an apple one as the CTO, which is the very first Dutch company he has worked for. He is married and is the father of two kids who distill his career down to he does something with computers. That sounds relatable.
So yeah, I mean, I said, he has used the outsourcing nearshoring for sharing for both software and hardware projects. So interesting. So welcome. I am it's a long introduction, but glad to have you on the show.
Arjan Kolkman 2:30
Thank you very much, and glad to be here.
Rolf Suurd 2:32
And I'm also joined by some of the regulars here on the show, Silvester, how you doing very well, thank you, oh, have you used outsourcing? Or have any experience with it? Hopefully you do otherwise? say much.
Silvester van der Bijl 2:48
I've worked on a number of projects where actually a team was outsourced? Well, and I'm pretty sure we're gonna get into that, for sure. That's why it didn't work. I've also went to India once to kind of like fix a project that didn't work. So I have some experience in Okay,
Rolf Suurd 3:04
well, nice. Well, hopefully you can share that today with with everyone and punchy. Welcome to the show. How's it going? I
Panche Gashteovski 3:11
think you're all going good. I'm a bit. My nose is a bit stuff right now. So if I sound a bit worried because of that, I got tested on negative on COVID. So that's positive.
Rolf Suurd 3:25
Thank God, man. Yeah, you actually, you've been on both both sides of the outsourcing world, right. Like you've you've been like the outsourced party, but you've also hired them,
Panche Gashteovski 3:36
right? Yeah. So years ago, I
branch of a Dutch company in Estonia, where I come from originally. And we, with the team, we grew that team to about like 25 people, and we did quite a lot of nearshoring projects. From that often as soon as we started. It was 2010. So yeah, I've been on a lot on that side. And then also on the side of companies who are actually requiring nearshoring give us
Rolf Suurd 4:10
yeah, so that's great, right that we have both sides of the of the dime, so to say in this episode, so we can definitely view it from multiple angles. Myself, I also have a little bit of experience with with outsourcing. I used to work for a company that had multiple teams in the Philippines actually. So that's like super far away. And I went there for two weeks once as well to smooth things out with with the project going there because yeah, it's so far away that the team needed some some, yeah, external or like internal help from us on a more regular basis, rather than just a couple of meetings in order to keep this stuff, you know, going smooth. And the iron I was wondering, do you have a similar experience where you have to travel across was the globe in order to synchronize with these outsourced teams that you that you are how, how was your modus operandi?
Arjan Kolkman 5:09
Yeah, a lot in your company till a couple of years ago, not for the for the last couple of years and definitely not in the in, of course in terms of COVID. But But Previously, we used outsourcing and far less nearshoring in two different ways. We have our own teams in foreign countries. So you could say that is, in principle, not outsourcing, but still far in nearshoring. But we were also using external companies in foreign countries to develop parts of the product or do part of a solution or help with fixing a particular problem. So yeah, in principle, my experience has been with mostly all kinds of different ways. It's it's directly contracting people to, in principle, writing specifications for whole products that were developed by external parties to in principle, the what we are currently doing and what I've been doing in the last few jobs. Me are more team augmentation. So So hiring a group of people to augment a core team to add more development power in such a team.
Rolf Suurd 6:25
Okay, and that's working well, or is it? Is it a challenge?
Arjan Kolkman 6:31
I it is working very well. But I would say that, that comes with a certain amount of experience, and also a lot of preparation. I think you can do these things, if you if you don't take them seriously. And underestimate them things can go wrong pretty quickly. But if you do your homework in you prepare these things, you you you treat people that you that you pull in your team to augment it as the hiring of permanent staff. In your spent enough time on that, then then it can be really powerful.
Panche Gashteovski 7:10
Question for me, I'm getting the impression REM that you you've been doing this for a while he said you have quite a lot of experience with different locations as well. How has How is this form of nearshoring evolved throughout time, from your perspective.
Arjan Kolkman 7:28
If I think printed, I don't know how it has evolved. But I can tell you how it has evolved into projects that I've been involved with, where I think with the older projects, say call it 10 years ago, that it was really a waterfall model, where you would write a long specification, and you would in principle, give a task to a company and let that company run with it. So they would have their own project management, they would establish their own team and they would in principle charge you a fee to deliver a particular piece of technology. And I think that that that doesn't align with any of the agile methodologies that we have now because then then fall apart of the projects, you just run in a waterfall model and at the end of the project, if you like i said if you underestimated you you are just presented with something that you may or may not have meant that you that you wanted that and and but so so what I've moved to and like I said that is really working very well for the projects that I've been been working with is really keep the team agile, treat the developers as just permanent employees. involve them in the stand up and do your project management from your from your own company. So it's really adding people to the team and nti in these days of COVID. I mean where somebody is working in Appledore in an office block two streets away from you or working in a foreign country. And if the time zones are not too different, there's actually no difference there.
Silvester van der Bijl 9:07
But as long as you're in all remote, it's going to work pretty flawlessly I think. What do you think will happen once all offices open? If they actually open again,
Arjan Kolkman 9:19
I think a lot of this will stay the same. That's what I've read. And what I've talked to for quite a number of people from different companies is that they still would like to keep at least a part of the remote working and some companies have said like we will keep working like this. I think a lot of people have been positively surprised by by how smooth the process has been to move from from being in a in an office building to people working from home. I can say the projects that I've worked for the one that conflict now in the one before this was it at cradle in Northern Ireland. We can say that the impact has been very limited. And I think that's a very positive thing from being in this industry. That that's COVID, in principle, from a business point of view, and from from day to day work has impacted us very little. So yeah, if you see what it does to other branches in other industries, yeah, we must be glad that we work in this industry,
Panche Gashteovski 10:27
I have the privilege to branch the privilege to people, I think professionals, and I agree a lot with you what you said, for those who have been practicing this way of working in also in the years before. This was just like a really minor step of transitioning towards a fully remote. You already had all the processes in place, you already had all the tooling in place, they just like moving the rest of the team in this modus operandi. So
Arjan Kolkman 10:57
Silvester van der Bijl 10:59
I am still wondering what's going to happen, right? Because people are going to move back to their offices. And right now it's really easy, right? And I fully believe in nearshoring, outsourcing, whatever we're gonna call it as long as you make it one team. But I'm wondering once people go back to the office, whether you get the distance again, I think this is typical for most outsourcing projects, right. But the distance between people and the company, actually, so how aware, are they what the company is trying to do out? are really part of the team? They are?
Arjan Kolkman 11:29
Yes, I think exactly like you say that making the people part of your team. And in principle, make them understand. Yeah, if you want to call it like, get the mission of what you're trying to achieve and get their buy in. That is as important with permanent employees as with nearshoring, or fostering stuff. I mean, I think, really from from a from a perspective of motivation, if people understand what we are working on what our ID is, and why they are doing it. Yeah, that's, that makes a very big difference. Yeah.
Rolf Suurd 12:02
I think about that, because, for example, you said something about treating everyone as a team member, but still they are working for a different company? And is it difficult to select the right team members for your team? Like, do you even get to select individuals? Or do you get, you know, you just hire a company and they supply the people for you? Or how do you get the best team.
Arjan Kolkman 12:28
So So what I did in my previous company, I spent a lot of time talking to different different companies, because you need to be clear what kinds of skills that you need, you need to know your technical roadmap, you need to know the point where you need to improve. So for example, in the current project, we we knew that we were weak on DevOps, and therefore for the first couple of months, in that project, we have a full time DevOps project person on board. So it shows but but we want to scale that down as soon as we have that under control. And then, for example, we get the user interface designer on board to to improve the UX experience, for example of the of the product. And that that's one of the advantages of nearshoring. But like I said, you shouldn't underestimate it, I mean, this flexibility, and the and the ease with which you can in principle, establish a team, you should not make you not do your homework and and so I spent a lot of time we went through nine different companies in the previous in my previous job. And only once we had three, we started interviewing people, so we treated the hiring of members really as as your hiring permanent employees, so interviews with different candidates, and then in principle, picking the one step that that we thought would fit the team best. And then that led them to a decision in which partner to to choose. And there we then establish the team. My rule was always like, because you can can make this outsourcing go crazy and say DevOps comes from this company and development comes from an order. But I'm upset, I've made a rule for myself. And that has worked like one core team, I want to have all the skills in house, I'm gonna use a nearshoring team to augment the the amount of work that you can do. But I want one external team, not more than not more than that. Right.
Panche Gashteovski 14:39
Okay. So if I understand correctly, the way you've operated mostly is hire individuals or hire a team that becomes part of your team essentially, but they are in principle employees of our company, correct?
Arjan Kolkman 14:55
Yes. Yes. So so. So outsourcing and then imprint nearshoring
Panche Gashteovski 15:01
worked with an in case where you had your own establishment somewhere else. Yes. And well, quite, quite interesting then. So how do you how do you compare the two experiences?
Arjan Kolkman 15:17
between themselves? So
Panche Gashteovski 15:21
whether you hire a team or people who are working for another company, but there isn't, or they're working for your company or your, your branch of your office somewhere else?
Arjan Kolkman 15:32
Yeah. So So, yeah. So I think what your question is like, like, I really haven't have a far or near assuring team that is part of your own company. Yeah. So So establishing a remote team, or a principal hiring in a team from an from another company, that that's what you're
Panche Gashteovski 15:55
really in your, in your experience. How does that work? Like? What what would be the differences that you see advantages or disadvantages to approaches?
Arjan Kolkman 16:04
Yeah, so I've had quite a number of teams that that I was responsible for that were, for example, in India, Canada, Australia. So in that case, I would say it is more difficult. If you establish your own team abroad, it's more difficult than then near or far shoring, because you, in principle, become responsible for quite a number of things that you now in principle, make the nearshoring company responsible for. So finding officers, organizing equipment, you're getting the people, sometimes, it's the paperwork to get foreign people into other countries that that needs to be sorted. Doing the interviewing and making sure that, that you adhere to all the local regulations. So So I would say that that is a lot more difficult. And, and in the end, for the end result, I don't really know whether that's such a big difference whether whether the people in call it like you established a team in India, where they would hire a team in India from via third party, or whether you would establish your own team there. I think from a development perspective, if you find the right people, it doesn't really matter in which mode you run.
Panche Gashteovski 17:21
Right? Yeah, unless you have somebody, let's say, local to do that for you, or you take over a company that maybe you have a good fit with.
Arjan Kolkman 17:32
Yeah, I just feel that. Like I said, I traveled a lot still till a couple of years ago, because these teams were all over the world. And then you'll have the responsibility, at least at what I feel to at least be there once or twice a year to speak to people locally and show your face and because yeah, there were quite a number of these themes. Yeah, that resulted in a lot of travel with, I think, with nearshoring companies, it's still useful to have a face to face meeting with people. But But you don't feel the pressure that it's actually your responsibility to do that. So it still has its benefits, but but it's not absolutely necessary.
Panche Gashteovski 18:17
comes an interesting, interesting conundrum maybe we mentioned then, okay, the team needs to understand what your vision is, what your goal is, what your what you're aspiring to achieve with the team and as long when it's clear also to them things go work, we totally agree with that. Can Can this not be a bit conflicting because when you're hiring people who are employed by a different organization, that organization might have different values and different goals and in certain cases could be maybe conflicting also with your goals. So where would the loyalty of those hire people why in
Arjan Kolkman 18:56
So eventually, I think the if there really was a choice, I mean, the salaries are paid by the by the by the external company and of course, you have contracts in place that you wouldn't be able to hire the people even if you if you desperately wanted to take them as your own employees. So it's logical to assume that the loyalty lies with with with the outsourcing company, but I mean, and that's why I spent quite a bit of time to establish the relation with that outsourcing company, you need to in principle feel that this company wants to sees this as a long term relationship. And yeah, if you get the feeling with the company, right and they have the right people, then you have a combination that that where that is not such an issue. But you are right, the it feels but but that may just be a feeling. That's that if people work directly for you, you'll have a more more security there. But then on the other hand, if people tell you then like we're gonna leave next month, then then it's exactly the same thing because they find employment somewhere else.
Rolf Suurd 20:07
Arjan Kolkman 20:08
I don't know.
Panche Gashteovski 20:09
But there, for instance, I could think of several cases where I've been on both sides of this, I can think of several cases where, for instance, somebody is, is worried somebody like an nearshoring location or pressuring location, they're working for a client. And then they want to switch or change a project or they want to leave, they want to leave because they're not their salaries is not high enough, or they want some some things from the company from the local company, but they're not getting it. As a consequence of that the client would you hire that person is, is experiencing a sort of a loss or disturbance in the team? And you'd have very, very little influence on that, when that happens.
Silvester van der Bijl 21:00
Do you have any influence on people making the decision if they're working directly for you, or freelancers? I don't think it matters, right?
Panche Gashteovski 21:07
Well, it doesn't matter. Of course, it does matter. Because what a certain person is valuable to you, when you're hiring them. It doesn't mean that the company they work for originally paid their salary, their worth that company the same. Because they're the You're the one that is that that person is creating value for. And that value that are creating for you might be exponentially higher than the value that they bring for the company that pays their salary.
Silvester van der Bijl 21:37
Of course, it is also higher than the rate you're paying them. But what I'm trying to say is you could make the same argument for any freelancer, right? Even if they're working on with it with you, in your office. They could leave at any point.
Panche Gashteovski 21:52
No, that's not that's not No, because then you are exactly, you're negotiating directly with the freelancer. And in this case, when you have like, like a company and other organization in between you and the person who is delivering the value for you, then some things can get muddled. So I don't know, maybe you have never had this experience, or I would like I'm just thinking that I've seen these experiences,
Arjan Kolkman 22:19
I understand what you're saying, but but I've not had that experience. But I think that is then I mean, should that happen, then then it would again, be a discussion with the partner company. And yeah, you need to have good links to those people as well, to say like, we need to make a plan so that that it is clear that that you are willing to, to do something to keep the person on your team.
yeah, but I understand what you're what you're what you're saying, I don't have experience with it myself. But that may feel that that you have more control over people that that directly work for you. I mean, you can directly negotiate with them or make a plan if they have show intentions that they want to leave so so yeah.
Rolf Suurd 23:08
So what I was wondering is that, you know, you mentioned that you are outsourcing people to augment the current team internal. So how does that how does that discussion go? Because I can imagine that there is some Yeah, some resistance to you know, outsourcing a part of the team at the internal team where they say like, Oh, my God, now I have to work together with these guys that I don't know, you know, maybe that there is some other maybe they feel threatened or or whatever. So how do you convey a message like this to a tee where you say like, I am going to go to help you guys out with some outsourced individuals.
Arjan Kolkman 23:42
Now, first of all, the strategy where I say I want to have a core team, and and then augmented. So that means like, We are not trying to replace the people that work at the company. So from that side. Yeah, that was that I've never had the issue that people would feel threatened. Right. The second thing is most of the time, there's another reason why you why you do this. For example, in my previous company, we needed to hit certain targets. We were startup investors wanted to see that we in for example, six months needed to reach a target. But they also want to touch For example, to have a 12 month runway from the money point of view. Now, we didn't have money for 12 months to establish a team the size that could one deliver the work and you didn't have the opportunity to hire people give them permanent positions and then let them go again six months later, you don't want to do that to people. So in that case, the decision to go with a bigger team, but then use nearshoring so that you don't have the problem if at the end of the six months you need to say okay, we need to now part ways. That was the reason and if you bring that to your to your current team like this is the reason Why we use outsourcing, then you can easily do it in my current job. It is the flexibility that we need like like, Hey, we really need a DevOps engineer, but we don't need a full time one. And eventually, we may even scale down to having somebody that is that is on call and maybe works for us only one day a week, we need to have help on the UX side, but we will not hire a full time UX UI engineer or designer, into into our current team. And so so there is always a reason why you do this. And if you make that clear, that won't that it's not an intention to replace your current team. And to the reasons why why outsourcing actually makes sense, then then I've not had, and I can honestly say that any issues in people buying into the strategy, but it's again, making sure that everybody's on the same page understands the strategy understands where you're going. That makes things much easier. Yeah.
Panche Gashteovski 26:02
When you invite why you're making certain decisions, right?
Arjan Kolkman 26:06
Yes. Yeah. And and have the people involved in in the, in the hiring, because they need to work together, we use a lot of pair programming, working together also with the people from the nearshoring. Team. So there needs to be a click between the people as well, it is not like throw some work over the fence and wait for it to be done. This is really like working together, like you would work with with any colleague in the same office. Okay,
Silvester van der Bijl 26:38
I think we're actually all kind of agree on this approach you're describing, right? Make it one team, make people part of the vision and the thing you're trying to achieve? I think I would least like to hear also stories of things that didn't work. Right. So maybe we have some examples of that. And the way outsourcing and offshoring didn't work.
Arjan Kolkman 26:57
Gathered that there are a lot of examples. Where Yeah, so in, in my previous company they had, when I joined there, they had just done a couple of outsource projects, several attempts that that had all failed. And this was in principle, a person that had a very good idea, didn't have the software skills, to judge the process, got some money from investors and thought, okay, good idea with with money, and hiring an external team. They'll work and and yeah, that team was left way on the way too much on its own, without actually really understanding where it needed to go. The quality of the software, that person couldn't really judge. So it was when quite a bit of the money was spent and there still wasn't a product. The questions were asked like, like, Where is this actually going. And And this went through several iterations. And when I joined the company, and I said, like, I want to use nearshoring, I had to do a lot of internal sales to get that done. Because the experience were just just bad. But but it is that and the estimation that I that I spoke about earlier, like, it is easy to find somebody I mean, if you're on LinkedIn, you'll probably get two or three invites for people that that want to work closer together or that want to learn from you, let's learn but today all just want to sell you in an external development team. So it's easy to find people, it's easy for them to put the team together. And and if you don't do your homework, then then you think you're making a lot of progress very quickly, but it's going to bite you later on. Yeah,
Silvester van der Bijl 28:41
Arjan Kolkman 28:42
So and I've seen a lot of these things where really large amounts of money were put into projects, where people just thought like, Okay, this is a cheap way to get rid of a problem and throw money at the problem and then it will go away. But but that's not how it works like like what you said in the introduction. It's not like making a toy, it still comes with all the complexities of developing a software project. And what you're actually saying in those things where I have it go wrong is let's try a waterfall model with with some peoples in the foreign country and then it will work and of course that will work even worse than a waterfall model with a big local team Yeah,
Panche Gashteovski 29:25
my experience where sometimes goes wrong is I think it goes in line with our any saying it Why haven't you having it really clear the motivations why you're doing it? If you're just doing it purely to for financial reasons, and it's just not gonna gonna work? I mean, the financial reasons. Well, purely if that's financial reasons, financial benefits should come as an outcome of whatever it is that you're going to do. So the actually the reason is like you want to hire qualified people to solve a problem or maybe maybe hire them at a lower lower rate. But if you're if you're not, if you're just focused on Oh, I'm just gonna find something cost effective. And without actually doing the homework and the due diligence and figuring out, this is gonna deliver value, and it's gonna fail.
Unknown Speaker 30:15
And well, I
Arjan Kolkman 30:15
agree and disagree with you, I agree that you need to do your homework. But if your objective is purely save money, and then you do your homework properly, then then it can also work. But if it's just purely a financial decision, and it's it's financial people making the decision to do this and choose the department that they work with, then then yeah, I haven't seen that go. Right. But But I would say if the strategy of a company is to establish and a team abroad or to hire people from a from a third party abroad, I still think it can work, even if the driver is the only financial benefit. But you need to do that homework.
Panche Gashteovski 30:56
I think that I think I said, I think we agree, I think I said exactly the same thing. So if you're just just doing it, because there's like, what was the one of the cases was Hart's very famous case, they just like, throw it, in order for them to save costs, save money, get bonuses out of it, and then it just like, spectacularly completely failed all of that. And you really, really, really need to put a lot of effort, if you're going to imagine, imagine that you need to take integrate a team. In the next hour, you're working, but then in the next time, like a team of extra team of two, three people like what is the effort gonna take to do that, and get the team on board up to speed. And now imagine getting to that, across 2000 kilometers, with a different culture, different different speaking roles. So the effort if you really want to get the most value out of it, and not just financial, though, but actually valuing delivery? That's like, yeah, you need to do the work to put the work in it. Yeah. Yeah.
Rolf Suurd 31:56
So yeah, my my personal experience with with far shoring in this case, was was pretty horrible actually. Because like, we were acquired by a company that had a team already there that were doing in their case, I think it was Visual Basic. But we were having a Java product. And, you know, one of the things that they wanted to do is have that team also work on the Java product. So there was a team, you know, all the way across the world in the Philippines. So with like a, I don't know, it's like a seven hour time difference, work together with us on a product that they don't know, with a programming language and principles that they've never applied before. So we had to educate these people. And they were very nice. They were really nice guys, right to work with. But in terms of the qualities, it just wasn't there. And our managers were directly speaking to their manager. So you know, these these these guys, were just Yeah, they were having a really hard time getting, you know, getting to grasps with the product that we were making. And yeah, in the end, it was just a disaster, they promised stuff that they couldn't deliver, and it just didn't work out at all. So my personal experience is definitely not not a good one.
Silvester van der Bijl 33:06
I think what you just said is kind of like key, right? They promised things they couldn't deliver. And I fully agree with that. And as long as you bring people on board your team, right and treat them as people and they are part of the team working on stuff that can work. If you're trying to say, Well, I'm outsourcing this piece of functionality, just go build this for me. I think it's going to be tricky In any case, right? If you nature it, outsource it, or
Arjan Kolkman 33:30
even if you develop it local. I mean, there are so many, I mean, it's not that agile became something that became successful in the software industry, because that all came from like writing huge specifications. And a lot of people will probably not even write those specifications. And then hoping for the best, it's Yeah, it's not going to work.
Silvester van der Bijl 33:53
I think my coolest example of that, and I just remember this was, was actually my first employer. So it was a long time ago, they still exist. And they still do the same things I imagined, but was very huge. Company in the Netherlands, they wanted this big new project. And I still remember, as a junior developer in the Netherlands, I had to actually read all the use cases, right? You know, all those freaking long template things, right? There's lots of boilerplate, and then you get to the gist of it, and you still don't understand, because you need to read all 1000s of them. But then I had to estimate the use case, kind of like in how many days is this gonna take? And then at some point you expect as a junior developer, I'm going to build this now. We're going to package everything up, right? It's like 3000 days and we just outsource it to India. This is going to work. what's kind of interesting what happened next? I think that they're still dealing with losses, maybe it doesn't work out
Arjan Kolkman 34:46
now. And there are too many people that and i can i can imagine that that if you have a good idea. You don't you don't understand software that well. You have some investors you You think you're going to build this app or you're going to build this system in a cheap way, it's it's all very, can be very exciting and initially thinks things look positive. But yeah, when things go off the track, it is very hard to get it on the track again. Because you're burning through the money, you're burning through time, you're not making your promises to investors. And before you know what you you have something on your hands that you can just not handle. And that's what I'm saying, like, like the preparation, but also then the ongoing maintenance of that relationship and monitoring what is happening is something that that requires a certain skill. And I think if you if you take nearshoring employees, and in principle, make them part of your team, then then that whole monitoring thing becomes very easy, because you have your daily standup, and everybody is there. And that's what I personally see as one of the advantages of nearshoring you're done in the same time zone. So things like a stand up in the morning and and doing pair programming and reviewing each other's code without having to wait for a long time for a review to happen. It's all easier if you're if you're close to the same timezone.
Rolf Suurd 36:18
So let's define. So let's define it for the people that don't know, right, so we got nearshoring, which you say like yeah, it's close by so it's relative in the same time zone, so the communication becomes easier. And then you have of course, like offshoring, or far shoring, which which variants are there and what what do each of these entail? Could you maybe do you have a
Arjan Kolkman 36:38
definition? I don't know whether there's a there's a very tight definition for it. But But I would say nearshoring for me is stops on in, say Poland, Ukraine, Croatia, Macedonia, that that that's that's where I would more or less draw the line. And if you go further east, towards India, Malaysia, the Philippines, China, I would consider that far. shoring.
Rolf Suurd 37:09
Yep. Okay. Outsourcing then, right. Sorry. Both are also just considered outsourcing. But outsourcing could also be like, I'm just going to hire a freelancer here in the Netherlands. Yeah, no. So
Arjan Kolkman 37:23
outsourcing I if you if you talk about the definition of outsourcing is a is an is an external company. So that could be a law firm or a company doing your administration in the Netherlands even so that wouldn't be near or far shoring, but you would still outsource it to to an external company. You could establish your own call center or your own production facilities in China under your own name, it would be far hearing, but it wouldn't be outsourcing because it would still be your company. So I don't know if that's an official definition. But how that's how I how I use?
Rolf Suurd 37:57
It is Make sense? And I think it's good to clear it up right for the listener.
Panche Gashteovski 38:02
And a question for all that I've been thinking about because you said your experience was with with the Philippines rights, and then you explain the the thought of people who were What is it? Basically developer, that developer later in?
Rolf Suurd 38:16
Yeah, they were shoe orange, basically into our product? Yeah.
Panche Gashteovski 38:19
Right. So and that all went the way it went? Do you reckon? If that team was locally based in Seattle, or not, not a place in town, whatever, and you had to work for them and integrate them? would have would have they had bigger chance of success?
Rolf Suurd 38:40
I think so I think if they if we were to include each other in the stand up and work relatively together, maybe doing some, you know, pair programming or a mobbing even because we did like at that time, everyone was working as an individual. Right, there was like zero collaboration going on between the developers as well. So I think that would have made a tremendous difference, because I went there for two weeks to actually pair with these guys. So yeah, I think if that was the standard way of working, it could have made it could have made a difference.
Panche Gashteovski 39:14
Yeah, but why didn't you didn't you do that? Like you could have still done done the programming, right?
Rolf Suurd 39:21
Well, like the way that these guys worked is that they started working like two o'clock in the Philippines, which is like, I don't even know what what time that it is in Europe. But I think it's seven o'clock or something for us in Europe in the morning. So basically, by the time I got to work in the morning, they already had like half a day done. And back then because we're talking like nine or 10 years ago, back then. I don't know no one in the office was was pair programming at that point. And I'm sure it existed and but yeah, it wasn't as a widespread concept.
Arjan Kolkman 39:55
Yeah, yeah. And probably communication. I mean, if you look at it from 10 years years ago till now with video conferencing and things like, okay, it existed 10 years ago, but they were quite expensive systems that you that that were in dedicated rooms in buildings. I think with the, with the speed that we have now of the internet and the ease of getting clients to do calls, it has opened up a lot of of possibilities to work to work remotely. But yeah, I think in that case, the time difference is probably the biggest factor there. Yeah, and sometimes that time factor works in your favor. I mean, you can, in principle, have a project that works. The, yeah, if you need things delivered, you can, in principle, give the tasks to a team in India, for example, and when you start work, a lot of the work has already been done so that you can continue. But I think in most instances, it is a lot easier to work closer together and and really work at the same time. So, but I've seen I've seen projects where where the time difference was, was a benefit. But yeah, for the for the for the things that I'm working on now, it wouldn't be
Panche Gashteovski 41:14
based on your experience, Ariana, I would assume you would advise people to try or pursue the nearshoring or offshoring approach also for getting their services.
Arjan Kolkman 41:31
The guy, it's a tool. So it's a tool in the toolbox that you that you have available as a decision maker. And I mean, there is a lot of flexibility in it, there are definitely cost savings in it. But you need to do it with enough preparation, you need to find that partner where where you think you can establish that relationship with and then I would look for a partner that that in principle has offices in the Netherlands, for example, local so that that are still a local go to person that you can speak to so the the national reporter that we now use, actually as the head office in Amsterdam, so they have developers there as well, but that the developers that we now use are based in Croatia. So I think that is very important. And then like, like I said, Take the time to hire the right people know what you want, and then find them likely would hire full time employees. And if you don't have the skills to to, to, to decide whether people are good, you cannot do the technical interviews yourself, get help in that area. And don't make the mistake of not doing that homework, because it's so easy not to do it as well. Because I mean, I've said anything, anybody can promise you, the world. But yeah, I mean, those people are there to make money as well. And if you don't push the project in the right direction. And you don't get people motivated to work on your project, then it for them, it's just the job to write the hours and whether they work on the project or not, they don't really care. That's what you want to prevent.
Panche Gashteovski 43:11
What kind of ties in the four questions you wanted to have, do you think that company there are in which circumstances or conditions you would advise companies not to pursue this?
Arjan Kolkman 43:29
I would say I would say don't put all your eggs in the in the nearshoring far shoring basket. So So I would say do this, if you have your core skills in your own company, in your own country, and then you need to scale up because there is just more work to be done. And you just need more people to do that work and then augment your team. But But I would not think like I have this project or I have this product that I want to build. And then without any technical skills, or with any local technical support to try to do this and hope that you can manage it because it is software, it remains complex. And I mean, if you have difficulty judging what what developers and project managers are saying to you, then they can in principle tell you anything. And so that's why you need to have those log skills local. That's
Panche Gashteovski 44:30
what I will do, but it will not work for me. But I'm not saying that of course the only recipe to what success but definitely one that works. One of the things that you mentioned also, in the beginning of the discussion he said if you in the beginning when you endeavored on this path with working with companies and partners abroad first you worked with Google fully outsourcing projects or pieces of work to companies and then you went into motors of integrating people into your team, augmenting your team, as you say, what like that term. One of the actual, maybe one of the biggest benefits of that of doing what you what you opted to do is the knowledge, which is probably the most important assets remains with the people and they're within your team. So if you are fully going to outsource a piece of projects, the knowledge for maintenance of that or to build upon that is never is never yours.
Arjan Kolkman 45:32
Exactly. Yeah, that is a risk as well. Because I mean, if you if something would not work out with a partner, or Yes, something else would happen, why the team would would move on they they might leave the company, or they may elect to work on another project within that same company. Then then, yeah, if you don't have the skills in house, you run a risk. And that's what I want to prevent at any time. Is that that even if tomorrow that relation would be severed? Okay, we wouldn't be able to meet make our deadlines, but at least we would keep the product as it stands. Have it running and support our customers? Yes.
Rolf Suurd 46:12
Yeah. And that's interesting for you to mention, because my, my brother, for example, his company nearshore, in Belarus, and he specifically mentioned to me as one of the biggest cons of doing it this way is that the commitment of the external team, so to say, is on a different level of the people that are direct members of the company. So yeah, if the deadline is coming up, and I don't know people need to work overtime or or whatever, like yet the commitment for for these people, in his experiences on his on the lower level, is that something you will also ignore
Arjan Kolkman 46:46
now? I would say absolutely not. Um, maybe I've been very lucky. But But I think I've put a lot of effort in into, into selling this mission. And, and, and making people aware of why we're doing what we're doing. Right. And, yeah, for the last couple of weekends, we had to work overtime, because we had to update systems. And yeah, I don't see a difference at all. I mean, I was lucky that that both the people in Holland and the people abroad, were very motivated to do this. Yeah. And, yeah, we spent a lot of overtime, doing it. But But yeah, it was just not as people understood why. And the result was very, very good. So yeah, maybe maybe that makes it easier to do it. Because you're, you're part of a winning team. But But yeah. I mean, the team can only be winning if everybody contributes to it. So yeah, like I said, Maybe I've been lucky. But I've absolutely never had that experience that I felt like okay, but I cannot expect less, or I can I need to expect less from from people that are coming from this other company? Absolutely not. Okay.
Silvester van der Bijl 47:59
I think, on your selection, right, as a partner company,
Arjan Kolkman 48:02
yeah. Yeah. And and of the individual people, but like I said, Maybe I've just been lucky there. But I can absolutely 100% say that, that doesn't apply. To my experience.
Panche Gashteovski 48:14
I've actually had the quite the opposite experience where people who are actually in the near shore location are, tend sometimes to be more motivated than the people within the original team. Okay.
Rolf Suurd 48:27
How does that sound? Like? Why is the role reversal? there? You think?
Panche Gashteovski 48:30
Well, the term that people use at the time were, well, people in developers in let's say, in Netherlands, that was the case, there was one company Netherlands, was, well there, they're all too spoiled. So it's like, five 530 gone. And then, please, the team that I worked with, was really proud of that team at the time, his coffee was like, Oh, we have things to do. We have like a goal that we have a demo tomorrow, like we need to really wrap things up. So there was some, some sense of belonging and like things that need to needed to be done. So it's not really I actually never had that experience that you are mentioning. Quite, very close to what are you saying and maybe even reversed. Okay,
Silvester van der Bijl 49:18
have you guys ever had to deal with cultural differences? doesn't play a role even? Even now?
Arjan Kolkman 49:26
Yeah. It can play a big role. Especially I think it's fostering it. I mean, it's it's something to be aware of, dealing with people in a in a team in China is completely different than dealing with people in a team in India. But I think if you if you do that, right, and you acknowledge it, and you, you, you treat the people on their strengths, then then I think a more diverse team. actually gets better results than then. Yeah, a team from from people only from one country. And even now, like, like I said, our current employees are, yeah, the people from the nearshoring partner partner are from Croatia, you just see that, that there, there's not a big cultural difference, but still something to be aware of. But overall, the team I think, gels better because of those cultural differences than it works against us. I mean, they are they, they are more talkative, they talk more about private things, then people in the Netherlands do. But that means the whole team opens up a bit more to talk about, about their things, the things that you in. Yeah, what I know from from, from a meeting with just Dutch developers would never talk about are these things that that are, that are discussed, and it brings the team closer together?
Silvester van der Bijl 50:51
So it's about the topic, but I am getting curious about what they're talking about. But let's,
Arjan Kolkman 50:59
let's not, let's not go No, no. It's just more about, about broader sisters, things and things like that. Like Like, like, like, I bought my sister a car because this and this happened to her and things that probably as far as I know, like I said, it's the first Dutch company that I work for, and I work there for half a year. But But what I what I know is that that these things would normally not be discussed that openly. Like like family and things like that,
Silvester van der Bijl 51:33
I should talk to us more than
Arjan Kolkman 51:35
Okay, maybe it's my lack of, but
Panche Gashteovski 51:38
you're also sticks people out of which two out of those six people are out of Netherlands, okay. It's quite a melting pot.
Silvester van der Bijl 51:48
That's why I was asking about the cultural differences, right? You already asked why I was asking about that. What I've I've, what I've noticed is that in some cultures, it's not polite to say no and right in all, we tend to be a bit direct. And then took some time for me to learn, right? So if I ask a question, can you do this? And I always get Yes. But actually, you have to spot all the subtle movements basically, or subtle hints. That actually was a no. And that to me, took a long time to figure out. Now, that led to a lot of frustration, at least on my end.
Arjan Kolkman 52:23
So one of the my experience was on mainly with a team in India, which is was part of the same company that I worked for. So with people saying that things were going well. And that you need to continue to ask because they they don't want to admit defeat or or they see in principle asking for help already as a failure. And and being aware of that and keeping asking the questions and also creating an environment where where you make sure make clear that it's that it's better to ask for help and then get your stick your head down and work for three weeks on the same thing. Just because you don't want to don't want to admit that you need help that. Yeah, that you create that that environment in which you feel safe to do that. And like, like I said, once you get that you can get a lot of benefits out of the out of having different cultures in your team, but but you need to be aware of it that that that some people need to you need to work within another way. But overall, I mean, the more diversity in the team. I think my experiences, the better it works.
Silvester van der Bijl 53:36
Oh, yeah, I fully agree. But right, it takes some time to get used to. Sorry.
Panche Gashteovski 53:40
We've said you said diversity quite a few times. And it's quite a hot topic was last few years, I would say so how would you define it? theme?
Arjan Kolkman 53:53
I, at the moment? I would say it is diversity in culture, diversity and gender. I mean, I don't know if things like religion in and other things. They don't but but Gary, I'm
Panche Gashteovski 54:13
sorry. Religion is tightly tied to culture.
Arjan Kolkman 54:16
Yeah. So so. But But I think those things like Like, if you have people with completely different cultural backgrounds working together, and you're, you're and I don't want to talk about ratios, but at least there are women and men in the same team. And then I've always worked. Yeah, those were the most successful teams. And I've tried to explain it to myself, like like, like, why does that work? And it's probably people still all have the I mean, they use the same programming language. They know that about patterns they know about technology, but still their their background, then still allows them to look at the same problem or the solution in different ways. And yeah, I mean, it's kicking an open door, but the better you understand the problem The better you are able to make a solution that works. So I think these things, things, I don't know how but they still contribute to, to in principle finding that optimal solution.
Panche Gashteovski 55:14
You were talking briefly a few minutes ago about creating this environment that is, and this was for people in India, I think you were talking about where it's okay for them to ask questions, and it's okay to be in a position where in their perception, they were failing, while in your perception. Obviously, wouldn't wouldn't creating that sort of environment be beneficial? everywhere, not just India, but by wherever you are? Wouldn't? Don't people in here in Netherlands need that sort of environment?
Arjan Kolkman 55:48
Yes. And I think that is very, very important to build any successful team. But what I meant to say there was that in India, you would have to pay particular attention to that part. Because, yeah, there is there is a cultural background where where there is just a hurdle that they need to go across to actually do this, then they're not used to it. But you're creating an environment of trust, where I mean, that that's how I see my job, most of the time as keeping all the all the bad things away from the team and creating an environment for them that they can fully work and concentrate on doing their job. Yeah, that is my role. And and creating this distrust also between team members is very important. Okay.
Rolf Suurd 56:47
It's very nice that it that is working out for you, I think you found a way to make it work for you. And yeah, hopefully that listener can pick something up from this and make it work for them as well. Because Yeah, I do believe that the that it is here to stay right there nearshoring. Far, assuring it's, it's been around for a while, and it's not going anywhere. So might as well make the best out of it. So pretty impressed with your good experiences with it at least. It's also good for me to hear the other side of the story as well. Because Yeah, I sometimes only, you know, go off of my own experiences and hear some other guys say like, yeah, it's never going to work. It's not gonna work. So yeah, this is giving me renewed hope, at least for the for the future. I don't know. sophister. How about you, because your initial experience wasn't a great one, either. So did this episode, change your perception about it?
Silvester van der Bijl 57:39
I think Corona kind of changed my perception, right? I think, oh, like we're gonna do fully remote, right? I think it could work. It doesn't really matter where people are as long as they fit within your team. So that's why I said, I fully agree with what I said, as long as you treat them as internal employees, it does not matter why they are. So I don't see that as negative. I do still have a problem with the typical while the affiliate store as well heard, right, that the typical outsourcing of here's the project, go make it or three times they beat him, I do have a problem with that. That's not going to Okay, so I'm not sure if this is nearshore outsourcing has simply become kind of like a distributed company. So maybe that's the difference to me.
Rolf Suurd 58:23
Outsourcing a stack of specifications like a build me this is probably not gonna work in any country.
Arjan Kolkman 58:29
No, not even in your own country.
Rolf Suurd 58:31
Okay, so I don't know if anyone has any more questions, or maybe you have a question for us, or I don't know punchier. You have some more questions to ask. Well,
Panche Gashteovski 58:46
I'm good. Thanks.
Rolf Suurd 58:47
Panche Gashteovski 58:48
What is your tip for today then?
Rolf Suurd 58:51
of my tip? Yeah. And man, that's a that's a good one. I actually did not. I did not think about one. Do you have one? Maybe so I can think I can quickly think of one.
Panche Gashteovski 59:03
Okay, I'll give you guys time to think. Yeah, I read a pretty good book. I think it was also suggested a one of our earlier guests.
So big five for life. I sort of I've been ranting about it for the last few days to everybody in our office. We're getting a bunch of ideas. So that would be my tip.
Rolf Suurd 59:21
I'm waiting for my copy, man. Dude,
take a cold shower.
I actually did. I actually took one you did me last night. Well, I don't know if it counts as a full cold shower. But it was like 15 seconds of coldness. And then I said like, Yeah, okay. I cannot, cannot deal with it. So but it's
a start, right? It counts. In my book. It counts. Like just
nice. Awesome. All right. Yeah. So my tip. It's gonna be a boring one. But the weather is awesome. And I'm going to have I'm going to have a walk I think after this one, and they encourage everyone to do the same.
Arjan Kolkman 59:56
Sounds like a plan?
Silvester van der Bijl 59:57
Yeah, I think that's a great plan of kind of like chill out. Then enjoy the weekend. Yeah. Oh, that doesn't make sense in this. gonna publish it next week. So
Rolf Suurd 1:00:09
Arjan Kolkman 1:00:11
now that just repeating what I said earlier, do your homework when you when you go on this venture and ask for help if you need it.
Rolf Suurd 1:00:22
Yeah. Okay. Yeah for sure. And I really like you know how you say like, you treat them as your own team because you have heard people saying like, yeah, we just opened up a can of developers and fix the problem right just throw money and people at it and it's gonna it's going to solve the problem and and that's just not how it works. So it's, it's not a silver bullet. And like I said, I really like it and treating them as part of the team and then I can definitely, definitely see it being successful for sure. All right, well, I want to thank everyone for joining Sylvester punchier. Thank you and Aryan, very nice to have you on the show. I've heard a lot about you from from the colleagues. So it's nice to also
Arjan Kolkman 1:01:07
thanks for having me.
Rolf Suurd 1:01:07
only positive stories. And I want to thank the listener Of course, as well. Thank you for listening to this episode of scout cast. And if you have any suggestions or remarks to them, please send us a message at info at podcast sorry podcast at for scouts.nl or you can find us on Twitter at for scouts. And yeah, thanks for listening and see you guys next time. Bye bye now