The old outsourcing model is broken. With rising costs, increasing geopolitical risk and saturation in traditional outsourcing hubs, European tech leaders are looking at alternatives, including high-quality destinations like South Africa and Portugal.
This massive shift in the global tech sourcing landscape is unpacked in the latest episode of BBD’s podcast, Tech Unboxed. Featuring BBD Executive Director Matthew Barnard, the episode details how European CTOs are moving past saturated and costly nearshore locations to embrace a balanced "rightshoring" model that strategically leverages talent, compliance and risk mitigation.
The four anchors: Why South Africa and Portugal are rising stars
Barnard breaks down the four non-negotiable anchors for modern software delivery and explains how South Africa and Portugal meet these requirements:
- Technical excellence: Beyond mere quantity, the focus is on a sustainable talent pool. Companies like BBD offer clients access to over 1 200 talented IT professionals with diverse skills and expertise.
- Communication and time zone fit: “Software development is really all about communication,” Barnard notes. South Africa offers strong English fluency and a time zone that is within one or two hours of CET, keeping Agile feedback loops tight.
- Risk mitigation and compliance: For regulated industries like fintech, data privacy is paramount. South Africa’s POPI (Protection of Personal Information Act) legislation has very similar safeguards as GDPR, giving European clients critical compliance comfort that mirrors EU legal systems, while Portugal operates under GDPR.
- Cost and outcome: Barnard advocates for the mantra: “Don’t buy by the hour, buy by the outcome. Expensive hourly rates are meaningless if a developer takes three weeks to do a job that a seasoned team can do in two days.”
The rightshoring playbook for quality and stability
BBD's approach to rightshoring is built on three essential pillars to mitigate risk and ensure velocity:
- Hybrid structure: This is about smart placement of talent. By pairing an EU nearshore hub in Portugal (chosen for its growing STEM capacity and strong language skills) with South African offshore scale, BBD ensures that sensitive data roles can remain in the EU while broader, high-capacity engineering tasks benefit from cost advantages.
- Transition maturity: Continuity is paramount. When moving to a new vendor, companies must demand a defined transition model. Barnard stresses the importance of techniques like shadowing and reverse shadowing to ensure a "smooth ride", clear ownership handover and zero loss of institutional knowledge.
- FX stability: To shield clients from global volatility and inflation, BBD offers financial stability levers. This includes options like billing in local currency and using sophisticated tools like FX collars and caps to ensure a stable, long-term financial relationship – not a volatile one.
"We’re living in times of change and volatility," Barnard concludes. "A rightshore model, balancing proximity, compliance and scale, is the necessary roadmap for sustained velocity without compromising quality.”
Loving these insights? Give the episode a listen below:
Looking to explore a rightshoring model for your business? Do business with the best – get in touch with BBD today and let’s chat!
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