Scaling Efficiency in Nearshoring: Our Journey to Fully Automated Processes

Introduction

In the rapidly evolving world of nearshoring, where competitiveness hinges on agility and efficiency, 25Friday embarked on a transformative journey to achieve a fully autonomous, integrated system. Initially, operations were largely decentralised, and critical processes within the HR department, such as accounting, recruitment, talent management, and time tracking relied heavily on manual interventions and disconnected external tools, often leading to errors, bottlenecks, inconsistencies, and in general reduced productivity.

Realising the potential impacts of a systematic and integrated approach, we set out to automate and streamline processes, starting with HR as the foundational pillar. From there, we expanded, building automation frameworks that connected and optimized accounting workflows, recruitment cycles, talent management, and time-tracking applications. Each step not only improved operational efficiency but also allowed our team to focus on higher-value tasks, creating a self-sustaining system where processes now drive themselves.

This article chronicles our journey towards a self-sustaining automated framework, detailing the tools, methodologies, and best practices that made this transformation possible. By sharing our experiences and insights, we aim to provide a roadmap for other nearshoring companies seeking to enhance their operational autonomy and efficiency.

Where Did We Start?

Our journey began like that of many startups: with a small team, minimal processes, and individuals wearing multiple hats to get things done. With just a handful of people, we enjoyed a fast-paced, flexible work environment where everyone contributed to various roles, which fostered a sense of unity, adaptability, and constant learning. Those early days were marked by innovation and creativity, allowing us to experiment, pivot, and refine our approach.

However, as we grew from a close-knit team of 3 to a bustling company of 80+, we began to feel the strain of this informal structure. The lack of streamlined processes that once fueled our agility now led to errors, inefficiencies, bottlenecks, and inconsistencies. Once seamless in a small team, communication started to suffer as our workforce expanded. With new talent coming on board and responsibilities increasing across the HR department, it became clear that we needed to evolve. The growing pains weren’t just logistical; they highlighted the need for a foundational shift toward more structured, reliable, and scalable systems that could support our team and goals as we moved forward.

The Growing Pains

As our team grew, so did the complexity of managing day-to-day operations. With employees spanning different countries, roles, and time zones, questions emerged that demanded immediate solutions to ensure our processes were as agile and efficient as our goals. The rapid scaling surfaced many challenges, some of which we hadn’t anticipated:

Financial and Administrative Processes

• Billing: Ensuring error-free, timely billing with minimal manual validation checks was crucial for maintaining smooth partner relations. We needed a system that would streamline invoicing and minimize the risk of discrepancies and the need for corrections.
• Accounting: Reporting critical information such as sick leave, holiday allowances, salary changes, and operational specifics to the accounting team accurately became a priority. We needed a process that minimized manual intervention to prevent errors and reduce administrative load.
• Inventory Management: Laptops, software, and other equipment require better organization and tracking. With each new hire, our inventory became more complex, and we needed a reliable system to manage it all.

Human Resources and Talent Management

• Selecting an ATS: As we onboarded more talent, finding an Applicant Tracking System (ATS) that balanced the features we wanted with affordability and integration with our ecosystem became crucial to supporting our expanding recruitment needs.
• Vacation Management Across Countries: How could we effectively manage and synchronize vacation policies for employees in Portugal and the Netherlands, each with different labour laws and entitlements?
• Storing and Managing Employee Data: We needed a centralized and secure solution for storing and managing our employees’ information, making it accessible yet compliant with data protection regulations.
• Transitioning to Automated Onboarding: Our manual onboarding process was unsustainable at scale. We needed an efficient, seamless experience for new hires that also minimized administrative time for our HR team.
• Employee Engagement and Retention: With rapid growth, maintaining our unique culture became a priority. We needed strategies to encourage long-term engagement and ensure our people felt valued and invested in our journey.

Operations and Workflow Management

• Time Tracking for Distributed Teams: Tracking, managing and validating work hours for employees across different projects became increasingly important, especially as our client base and project load grew and we had to enforce internal policies and checks on the time sheets
• Internal Documentation: As processes evolved, keeping internal documentation accessible and up-to-date became essential. We needed a centralized system to ensure that team members could easily access the latest information and that updates were reflected daily.
• Analytics and Company Health: As we grew, tracking key metrics became critical to understanding and improving our performance. We needed a way to measure employee retention rates, gather NPS scores to assess employee happiness, categorize hours per employee, and evaluate the overall health of the company. These insights would drive strategic decisions and help us cultivate a healthy, sustainable environment.

Remote and Resource Management

• Remote-Friendly Environment: In a flexible remote work setup, we wanted to ensure every employee had access to the right tools, software, and support, regardless of location, to work productively and feel connected.

Addressing these growing pains wasn’t a quick fix but a gradual process filled with trial, error and significant effort. Some solutions that seemed promising initially didn’t work out as expected, while others proved invaluable and still support our operations today. At 25Friday, we’ve developed a culture of learning from our missteps, continuously iterating, and pushing for excellence.

This journey of refining our processes has strengthened our operational backbone and reinforced our commitment to growth and improvement as we move forward.

The Journey to Fully Automated Processes

In the early days at 25Friday, we relied on a handful of tools to mitigate our operational challenges. These tools, while effective initially, each came with their own limitations, and over time, the need for a unified, scalable solution became clear. Here’s a breakdown of the tools we used, along with their advantages and drawbacks:

Freshteam:

• Pros: Freshteams offered a versatile Applicant Tracking System (ATS) with a range of features, all at a reasonable price point. It served multiple functions: applicant tracking, people management, holiday management, onboarding, offboarding, and analytics.
• Drawbacks: Despite its breadth, Freshteams fell short in some areas. It lacked the specific functionality and third-party integrations we required. The API integration was limited, making it difficult to connect with other essential tools. Additionally, the outdated UX/UI didn’t provide an optimal user experience.

TimeChimp:

• Pros: TimeChimp was our time-tracking tool of choice for several years. Every employee tracked their working hours through it, and we also leveraged it for expense claims.
• Drawbacks: However, the tool had limitations in creating rules for workflows and validation. Controlling billable hours was challenging, requiring manual verification of every employee’s logged hours a time-consuming process. Additionally, the lack of a robust API limited third-party integrations, and the cost was high relative to our usage.

FreshService:

• Pros: FreshService helped us manage our inventory effectively, providing structure and oversight to our asset management.
• Drawbacks: However, it wasn’t designed to align with our specific business model, leading to underutilized features. Given its high price point, it wasn’t a sustainable choice for us in the long run.

Nuclino:

• Pros: Nuclino provided a centralized platform for internal documentation, and even the free plan supported many of our needs.
• Drawbacks: While it was useful, the paid version’s subscription cost was high for the limited set of features we utilized, making it challenging to justify as our sole documentation tool.

Daywise:

• Pros: This application enabled both Portuguese and Dutch employees to book their holidays efficiently, providing a convenient solution for managing time-off requests.
• Drawbacks: While the app was functional, it lacked transparency in holiday policies. With no administrative panel, we couldn’t adjust holiday policies internally, making it inflexible to our evolving needs. Additionally, for the limited features we utilized, the subscription cost was high, reducing its long-term feasibility.

While each of these tools served its purpose and allowed us to meet the majority of our requirements, none offered the holistic, automated solution we sought. What we truly needed was a unified platform to automate manual processes, streamline workflows, and make internal operations more efficient across departments.

Building Our In-House BackOffice

Recognizing the need for a tailored solution, we embarked on creating our own BackOffice—a platform designed specifically for our business model and operational needs. By gradually phasing out the paid tools and replacing them with our BackOffice, we moved towards a unified system that could meet all our requirements without the constraints of third-party limitations.

The development process took nearly two years, with careful planning and phased implementation. In the end, we built a flexible, adaptive solution that not only fit our business needs perfectly but could also evolve with us as we grew and our requirements changed.

Our Fully Autonomous Ecosystem

Today, our BackOffice platform integrates multiple functions to provide a seamless, autonomous experience from Day One—for both clients and employees. This unified system allows us to automate processes across the employee lifecycle, reducing manual intervention and ensuring consistency at every touchpoint. Here’s an overview of the key features we’ve implemented:

Fully Autonomous Onboarding and Offboarding Process

• Our BackOffice equips the HR team with tools to interact professionally and consistently with candidates and employees throughout the onboarding and offboarding journey.
• From this platform, the HR team can schedule interviews, send employment contracts, initiate the onboarding sequence, and administer post-interview surveys all in one place, ensuring a cohesive experience.

ATS + Custom Career Page

• Our custom-built ATS (Applicant Tracking System) allows us to manage all candidate information, including application history and relevant documentation.
• The system supports end-to-end hiring pipeline management, from initial application to final hiring decision.
• Our public-facing career page is integrated directly with the ATS, automatically displaying open vacancies for candidates and minimizing manual updates.

Talent Module

• With our talent management system, we monitor employee well-being through structured one-on-one meeting tracking between employees and their managers.
• An export feature enables the HR team to generate detailed reports on team goals, aiding in performance reviews and goal tracking.

Inventory Management

• Our asset management tool tracks the history of all company assets and applies custom rules specific to our requirements, ensuring accountability and compliance with inventory standards.

Partner Management

• We maintain comprehensive records for all partners within the BackOffice, centralizing information for easy access and streamlined communication.

TimeLoom

• TimeLoom, our dedicated time-tracking module, enables employees to log both billable and non-billable hours.
• The module incorporates numerous validation rules to prevent errors, reducing the need for manual corrections and ensuring billing accuracy.

Accounting

• Our BackOffice offers a range of reports and validation processes to support the accounting team.
• Billable processes undergo systematic validation to prevent errors, safeguard our financial accuracy and minimizing discrepancies.

Car Parking Management

• We’ve implemented a car parking reservation system that enables employees to book parking spaces at the office, simplifying a previously manual process.

Internal Handbook

• An internal handbook, accessible to all employees, is housed within the BackOffice and contains all essential internal policies, guidelines, and processes. This ensures that employees have a single, reliable resource for company rules.

Analytics

• Our analytics module tracks and reports on key performance indicators, providing data-driven insights that help guide strategic decision-making across the organization.

In addition to our internal BackOffice system, we also rely on two external platforms that fit perfectly with our business needs due to their quality and high level of customization:

WeFact

WeFact is a Dutch-based invoicing software known for its simplicity, reliability, and flexibility. It allows businesses to create, send, and manage invoices efficiently, with features tailored to meet various financial and accounting needs. Due to its high level of quality and security, WeFact has been our preferred platform since day one to create and send monthly invoices to all our partners.

HiBob

HiBob is our go-to platform for managing employee data, personal development plans, and holiday management. It also provides powerful HR analytics and reporting tools, giving us valuable insights into our workforce. HiBob’s extensive customization options and comprehensive features make it an integral part of our HR operations, particularly in the areas of employee and talent development and data management.

Tech Stack

In this chapter, we delve into the technology stack that powers our BackOffice and the various modules that drive our fully automated processes. By leveraging modern tools and frameworks, we’ve built a robust, scalable infrastructure that ensures both high performance and reliability.

Tech Stack Details:

• Backend: Our BackOffice backend is developed using the latest version of C#, leveraging a scalable modular architecture. This approach allows us to build and maintain independent, self-contained modules, making the system flexible and easy to expand as new requirements emerge.
• Infrastructure: The infrastructure is hosted on Azure, which provides us with a secure, scalable cloud environment. We use Cloudflare for our front-end hosting and content delivery, ensuring fast and reliable access to our web applications.
• Frontend: Our frontend stack consists of React, TypeScript, and Next.js. This combination allows us to create dynamic, highly interactive user interfaces with strong type safety and efficient server-side rendering capabilities, enhancing both the performance and user experience of our applications.
• CI/CD (Continuous Integration/Continuous Deployment): We employ GitHub Actions to automate our CI/CD pipelines, enabling seamless integration, testing, and deployment of new code. Our front end is deployed using Cloudflare Pages, ensuring a streamlined and efficient deployment process.

Here is a high-level overview of our current Architecture:

25Friday Cloud Architecture

We run several background processes daily to ensure our operations are efficient and reliable.

Our onboarding process includes multiple steps designed to create a positive experience for new employees.

Once a candidate accepts our offer, the HR team initiates the onboarding process in the BackOffice. Then we have the following processes that starts to kick in:

• Create user accounts
• Automatically generate contracts and send them to the new joiner
• Send onboarding details to the employee and relevant partners
• Send follow-up emails and gentle reminders throughout the onboarding process

Other key features of our background process is the payroll and billing services. We ensure that all billing and accounting processes run smoothly with comprehensive checks and custom reports.

The following diagram outlines our background processes and their respective responsibilities.

25Friday Background Services

The image below provides a glimpse of our current BackOffice UI (using mock data), showcasing the various features included in our in-house suite.

25Friday BackOffice (mock data)

Best Practices

Start with Foundational Automation in High-Impact Areas

• Identify Core Processes: Begin by automating core functions like HR, accounting, and recruitment, which form the backbone of company operations. Target processes with high manual input or repetitive tasks to generate significant initial impact.

Select Scalable Tools and Integrate with Long-Term Needs

• Prioritize Flexibility and Integration: Choose tools that not only meet current needs but also offer integration capabilities to scale with future requirements. Consider an API-first approach to enable seamless connections across platforms.
• Limit Dependency on External Tools: Over-reliance on third-party tools can lead to limitations. Gradually migrate from costly, less customizable tools to in-house solutions where feasible.

Adopt a Modular Approach to System Architecture

• Build Independent, Self-Contained Modules: A modular design allows the system to grow with the business, simplifying updates and enabling easy incorporation of new features without disrupting existing workflows.
• Use a Scalable Tech Stack: Adopt a robust tech stack (e.g., C#, Azure, React) to support efficient, secure operations. Cloud-hosted infrastructure further aids scalability and reliability.

Develop a Unified Platform for Streamlined Operations

• Centralize Key Functions: A single platform for all operational needs reduces data fragmentation and fosters smoother workflows. For example, integrating an ATS, talent management, time tracking, and inventory within one system improves oversight.

Continuously Refine Processes through Iteration

• Gather Data and Metrics: Collect analytics to monitor system health, employee engagement, and performance. Use data to identify areas for process refinement and strategic improvements.

Implement Validation Rules to Reduce Errors

• Automate Checks and Balances: Automate billing, timesheets, and other routine checks to catch errors early. For example, our time-tracking module incorporates validation rules, ensuring accuracy in logged hours and minimizing manual intervention.
• Enable Auditing and Reporting: Regularly review reports for high-stakes processes (e.g., payroll, billing) to ensure accuracy and reliability across automated workflows.

Ensure Robust Documentation and Training

• Centralize Documentation: A consolidated internal handbook for all processes allows team members to access updated information, ensuring uniform adherence to standards.
• Invest in Training: Employees with training to maximize system utilization, ensuring smooth adoption and reducing operational disruptions during transitions.

Conclusion

Our journey from fragmented, manual processes to a fully automated, scalable system has been transformative, not only for our internal operations but also for the efficiency and agility of our business. By automating key areas such as onboarding, recruitment, time tracking, and accounting, we’ve empowered our teams to focus on high-value tasks, reduced human error, and streamlined workflows across the board.

While leveraging third-party tools was crucial in our early growth stages, the limitations of these systems underscored the need for a more cohesive, integrated platform. Building our own BackOffice allowed us to develop a tailored solution that meets our unique business requirements. This platform now serves as the foundation for our operations, integrating seamlessly with other critical systems and supporting both our employees and clients from day one.

The strategic deployment of modern technologies—C#, Azure, React, TypeScript, and automated CI/CD pipelines—further reinforces the scalability and robustness of our BackOffice. By leveraging a flexible, modular architecture, we’ve ensured that our platform can adapt to new challenges, future-proofing our operations and enabling continuous innovation.

For other companies, particularly those in the nearshoring space, our experience serves as a roadmap for achieving operational autonomy. Automation, when thoughtfully implemented, not only drives efficiency but also enhances the employee and client experience, allowing businesses to scale while maintaining quality and consistency.

As we continue to grow, the flexibility of our custom-built system will remain a competitive advantage, enabling us to evolve and stay agile in an ever-changing business landscape.