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Offshoring software development is a popular modern software creation strategy in which the client delegates all or part of the project tasks to an external vendor based in other countries. The familiarity we have gained in the last two years with remote collaborators and the evolution of online communication tools allow us to access valuable IT resources at a lower cost.
The high cost-effectiveness of hiring offshore development teams is confirmed by the explosive growth of the outsourcing software engineering market in several countries and online platforms where customers and suppliers can meet and start collaborating.
At the same time, the physical remoteness of a hired team and possible cultural differences entail certain risks of misunderstanding, missed deadlines, and wasted money. In this article, we elaborate on the offshore development model and give practical tips on choosing a good service provider and monitoring its work effectively.
Academy’s SMART offshore outsourcing development example
What is an offshore development team
As a rule, offshore development refers to cooperation with remote IT teams that are located at a considerable distance from the customer’s country, as opposed to nearshore developers who are geographically located in the neighborhood. Among the popular countries with high levels of offshore outsourcing development services are Argentina, Brazil, and Mexico in the Americas, India, Vietnam, and China – in Asia, Poland, Ukraine, and Belarus – in Eastern Europe.
As the standard of living in these countries is usually lower, the salary of offshore team members with the same skill level as nearshore or native specialists is expected to be lower too. And this significantly reduces the cost of software engineering, maintenance of own staff, and office infrastructure necessary for their work.
However, not only economic feasibility is the advantage of working with offshore development teams.
First, it is access to talented and hard-working developers with unique expertise, which your team may not have. It’s no secret that IT technology is fast evolving, and many stacks are changing rapidly in a relatively short time. Therefore, you may not find an expert in somewhat outdated technology in your environment. However, you may find them at an offshore provider, so problems with your software will be competently resolved.
And most importantly, the team is the organization of workflow, process management, and responsibility for the workload taken on outsourcing. It doesn’t matter whether you order the whole project, a web application, or its specific feature only. The offshore software development team gathers the necessary specialists and produces the result with a minimum of effort on your part. Of course, if you are clear about your needs and articulate the tasks to implement them.
Benefits of offshoring software development
Cost efficiency
Chief among the benefits of offshoring software development is its high cost-effectiveness. A remote development team replaces a full-time IT department. Therefore, the customer does not have to spend money on setting up the workspace, purchasing the software, and involvement of more expensive native specialists. At the same time, the fiscal burden on your business is significantly reduced, as you do not have to pay taxes for the work of people residing in another country. They are not your employees, are they?
Time-saving
The next best thing is the ability to significantly reduce the time needed to start work on a new project or to correct deficiencies in an existing one.
Recruiting departments at offshore providers create their own staff and build focused and effective development teams. The idea to hire an offshore development team frees you from the routine operations associated with hiring the required employees. You don’t need to look at applicants’ resumes in detail, conduct interviews, and train new employees, speeding up their adaptation to the project.
You only need to state your goals: the remote company will find candidates with relevant competencies and organize their workflow.
Usually, from the moment you sign a cooperation agreement to the actual start of work, no more than two weeks are spent clarifying the scope of the project and its technical details. In the case of an in-house team, this period can be much longer.
Expertise
It is essential to understand that lower hourly rates of professional offshore programmers in no way affect the high quality of their work. It is nothing more than a consequence of the economic situation of the countries in which they live. On the contrary, the number of excellent available professionals in different branches of information technology increases manifold if you direct your attention towards offshoring software development.
Management simplification
In addition to technical specialists, you also get competent management responsible for planning, controlling, and related organizational issues. Of course, their duties are to report on time to the customer and approve problems that require his approval.
Let’s note that one of the crucial attributes of offshore development teams is the flexibility of their work. They quickly scale the staff involved according to the project’s current needs. It greatly simplifies the structure of your business and frees you up to deal with issues you would not want to be involved in. Notably, the responsibility for paying salaries and taxing employees is not your concern but that of the service provider’s management.
Whether you work on an outsourcing model, entrusting project development to a remote company in its entirety, or expanding your staff with outstaffers, the vendor company does all the routine work, allowing you to focus on your goals and results. How it happens in practice, we have already explained in the article Outsourcing vs Outstaffing: What To Choose.
Who needs working with offshore development teams
There are a few cases when cooperation with remote development teams is impossible or severely limited. As a rule, they are related to higher security requirements or corporate policies.
But if there are no such restrictions, using the service of offshore custom software development is profitable and efficient for a company at any level – whether it is a new start-up or an enterprise with a century-old history.
What typical challenges can be working with offshore development teams help you cope with?
- You can get professional consultation, an independent expert evaluation of your software, and recommendations for its implementation and cost reduction. In this way, you will compensate for your team’s lack of technical background and get a new vision of prospective tasks for the advancement of your business.
- You can order software development from scratch according to the parameters you specify. You don’t have to worry about the technical complexity of the task, the resources involved, or the organization of the processes as you pay for the final result.
- You may need to upgrade your application, develop its mobile version or migrate to a cloud server. In this case, the offshore development teams will get the job done quickly for an affordable price.
- Is your IT department lacking certain specialists, or is it insufficient for the increased scope of your project? With offshore vendors, you can quickly fill the vacancies for as long as you need and without unnecessary social responsibilities.
Two cases when you need to hire an offshore development team
To avoid repeating the above, you might work with an offshore provider when you know what you need, but the software doesn’t exist yet, or the solutions available now are unsatisfactory and need improvement. To illustrate these cases, here are a couple of examples from our custom software development practice.
Creating an original safety control application
The QHSSE team faced the problem of being unable to electronically keep track of potentially dangerous situations or incidents in production. Clearly, this problem was only partly resolved using the standard office software, as the critical functions of automated analytics and alerting were not available. At the same time, no existing software on the market would meet the stated goals. The customer, therefore, needed to develop unique software that would capture unsafe situations, notify management of the problem, and notify employees of ways to prevent the incident.
Academy Smart carried out a full development of the online application, including front-end and back-end components. As a result, the application has an easy-to-use incident registration system, detailed and apparent analytical features, and a comprehensive reporting and notification system for all levels of recipients. Thus the task of increasing the safety of the workflow and the awareness of potential threats was solved.
Safety Dashboard is now operating effectively in many Western manufacturing companies, having paid off the customer’s expenses for its development.
Developing a modern custom LMS from the scratch
Cyber Inc., which specializes in high-quality e-learning, needed a Learning Management System with specific technical parameters for the convenience of their services.
In analyzing the specification, Academy’s Smart specialists detected certain contradictions between the technology, which the customer viewed as a base, and his actual needs, offering several possible solutions. As a result, to meet all the technical requirements at the modern technological level and keep the cost efficiency of the project low, the client decided to develop a custom LMS from scratch, as using outdated solutions would significantly increase the development and maintenance costs of the product in the future.
Currently, full-featured cloud LMS 2LRN4 is effectively used by Cyber Inc. and its license buyers.
Below you can find applications in which our company, as an offshore software development team, has been wholly or partly involved:
What do you need to know before hiring an offshore development team: checklist
As you may have seen, dealing with offshore developers in practice is not much different from local IT services. However, before you approach a particular vendor with a specific task, you should pay attention to several essential nuances that may significantly impact the quality of joint project work in the future.
Understanding the software development process
Despite the obviousness of this point, most clients of development companies have a very vague idea of how the software is developed and are perplexed as to why certain operations, resources, and time are required.
Firstly, consider that the software development process, as well as soft upgrades, generally consists of five main stages:
- preparation of the technical documentation for the project;
- front-end and back-end interface programming;
- product testing;
- software implementation;
- technical support.
Depending on the product’s complexity and current state, some cycle’s stages may be reproduced more than once.
Secondly, you should also have some knowledge of effective remote team management methodologies that are used in the software development environment. We recommend you learn more about Scrum principles and get at least a cursory understanding of how System Development Life Cycle (SDLC) models differ.
Assessing the qualifications of the development team
As a service user, you need to assess the practical skills of this or that development team. And a complete lack of technical background should not embarrass you.
The following points can help you assess the company’s labor culture and the prospects for future collaboration:
- specialized platforms that collect feedback on offshore service providers from their clients;
- publications by the vendor’s employees on social networks, thematic websites, as well as on the company’s blog;
- directly contacting clients in the company’s portfolio, whose contacts are easy to find online.
If you can’t conduct such research, you may entrust to hire an offshore development team to a professional outsourcing agency, such as Academy Smart.
Average development price on the market
Sites like Clutch.co, techreviewer.co or goodfirms.co are also good to inform you about the services cost in your market segment. You can compare the financial expectations of companies from different countries, their ratings, and delivery history and build a list of vendors that fit your price-performance criteria.
Hire offshore development team: typical problems and how we prevent it
Unfortunately, even the most careful pre-planning doesn’t eliminate many difficulties you may encounter when working with foreign developers. Here are the most significant ones
Too many suppliers to choose from
The number of companies worldwide willing to develop software and various applications for you is in the tens of thousands. Only Ukrainian companies are eager to meet your technical needs, starting immediately, about a thousand. And that is if you do not count freelancers who are also convinced that they can be helpful to you. Of course, such an excessive choice can be shocking, and it is essential not to give in to the urge to make it emotionally.
There are generally only three options for dealing with this difficulty:
- use recommendations from your friends and partners who have already dealt with the company’s services;
- formulate clear selection criteria (country, technical expertise, number of successful deliveries, and so on) and consistently consider candidates, weeding out those that don’t fit them;
- enlist the help of a professional outsourcing agency to assemble the relevant offshore development team for your project.
The difference in time zones
Since offshore countries are usually quite distant from the customer, the problem of having effective communication in different time zones arises. First of all, this difference can be significant – up to 12 hours. Secondly, in some cases, your today for the offshore development team can be just tomorrow which also doesn’t affect the process synchronization in the best way.
This contradiction can be resolved as follows:
- agree in advance on a schedule of meetings and web conferences on current issues of the project and stick to it strictly;
- choose an offshore software development team in a country whose time zone is not so different from yours that it makes personal communication by phone or online inconvenient.
By the way, it is not in vain that American companies outsource software development and much more to Ukraine. The time difference between New York and Kharkiv, where our company works, is +7 hours. So, when the working day starts in the US, it is in the middle of the day here, and the remote employees are entirely ready for meaningful communication and demonstration of current results.
Cultural differences
Although programmers from different countries are equally good at coding and hardworking like their colleagues, the significant differences in mentalities between customers and service providers can still be a real challenge. Indeed, it can be difficult to find common ground if we expect consistency, a focus on deadlines and results, and flexibility in processes but are dealing with an emotional-intuitive approach and a rigid framework of an organization.
That doesn’t mean that someone from the Western world cannot work with developers from the East. On the contrary, building trust with the team can be very productive and long-lasting. However, if you do not have time to understand the intricacies of a new culture, you can choose performers who are mentally close to you and share common values and labor culture.
Lack of personal relationships
It’s okay to hire a remote programming team for short-term tasks. However, if you require long-term collaboration and sustained high performance, you may have to wonder whether the offshore development team feels some involvement in your common cause.
On the one hand, you are paying money, so enthusiasm is assumed. On the other hand, establishing a good personal relationship is never superfluous and only strengthens it. Devote some time to your remote employees, not just the results of their work, and you will be confident that you won’t be let down.
Where to find offshore development team
Today, finding information about developers and their contact details is not difficult, as they compete for your attention and use any possible online and offline platforms to showcase themselves to potential clients.
The traditional and proven way to find an offshore development team is through recommendations, which you can get from business partners or friends. They will allow you to understand how professional the team is and how to engage with them in the best way possible. The only disadvantage of this approach may be that the team you have been recommended may not match the technology stack of your project in any way, or their qualifications may be lower than required in your particular case. It is worth paying attention to.
Various offline events – conferences, forums, and meet-ups – are popular among software developers. Here they share their experiences and discuss the prospects of the industry. It is an excellent way to find suitable talents, get an idea of potential contractors, and communicate with them. Unfortunately, it’s not always possible due to the distance between countries and the time and money constraints. However, these activities can be safely delegated if you have a trusted representative in an offshore country.
Often, offshore development teams position themselves as freelancers and offer their services on international online freelance markets. You can also find their publications on thematic portals like Medium and social networking sites, among which LinkedIn is beneficial.
Of course, most offshore software development teams have a business website informing visitors about their values, scope, technical expertise, and the cases they have delivered. Still, it is recommended to treat this information critically, as no one would advertise their organization’s weaknesses and past failures. And yes, the competition for position at the top of Google or Yahoo! search engine rankings has never been canceled, which affects their results.
Review platforms like Clutch, Good Firms, and others are good places to find suitable IT talent. Here, you can get an opinion about the company from customers who have already used its services. The administration of these portals verifies the reviews by contacting the customers directly. In this case, manipulating the reviews’ content is practically eliminated, and you get precisely the company’s assessment that it deserves by the results of its work.
The convenience of searching by country allows you to choose the best timing zone offshore. Importantly, with the help of an advanced filtering system, you will select suitable performers with expertise in your industry and an acceptable price range. You won’t waste your time considering teams who are not interested in the scope of your project, low-rating, or who you think are overpaid.
In addition to professional review-sites, there is a whole class of listings, a-ka “Top X software developers from country Y”. It is also a means to find some teams as an alternative. However, remember that in most cases, places on such a list are bought, but advertising doesn’t have to be objective.
As you may have noticed, finding a good development team requires a lot of spare time and determined attention in the face of an extensive range of offers.
Assessing the risks of making the wrong choice, you may rightly feel that there is no strict need for you to do this personally and outsource this task to a recruitment agency. Whether you’ll be happy with the team that remote HR specialists select for you depends on their professionalism and ability to understand the specifics of the technical component.
The best way to compensate for the lack of technical background is to approach outsourcers specializing directly in software development. Companies such as Academy Smart assemble project teams from their usually large staff and flexibly manage them depending on the client’s current needs. In our article IT Outstaffing company vs IT Recruitment agency, we detail some additional benefits of such a solution.
Best options to hire an offshore development team
As you may have seen, finding developers is relatively easy. The challenge is ensuring that the choice of contractor meets your expectations.
Interviews with case presentations from developers
If you are recruiting a team independently, this option will require you to prepare in advance, selecting a pool of suitable candidates and studying the available feedback with ratings. You will also need to set aside time for interviewing their representatives to prove themselves and the strengths of their team.
This option is good because you can assess how professional and staffed the team is and how their development processes are organized. You will also determine the degree of sincerity and confidence in presenting their work achievements. For clients who prefer to be actively involved in the project, this is the best way to get to know the applicants and compare impressions. A technical background and previous experience working with software developers can make a good chance of recruiting a worthy team.
Freelance services
The option to order an offshore development team via services like Upwork may also be quite effective, as it minimizes the risk of losing money due to an inefficient performer. The client needs to place an ad with a software product specification and wait for a response from the teams who feel capable of creating or upgrading it.
An obvious advantage is a payment for services upon delivery to the client. If the team fails, the frozen fee is returned to the customer. On the other hand, there is a loss of time in researching candidates and finding new ones in case the current freelance team refuses the project. Depending on the terms of the contract, sometimes you have to start all the work from scratch, as there was no provision for handing over interim results from the previous team.
Recruitment agencies and outsourcing companies
Recruitment agencies take on the task of finding IT professionals with pre-agreed competencies, and they usually do a good job. However, remember that you must organize the offshore staff and synchronize their efforts yourself.
In this sense, offshore IT outstaffing companies, which include Academy Smart, are considered the best option on the market, as they already employ the proper professionals for the project team and manage all the software development and delivery processes. Working with a professional IT outsourcer guarantees that all the money you invest in your project will be spent wisely and that it will be handled by people who are genuinely dedicated to their work.
Step-by-step guide to hire offshore development team
So, it is a good time to summarize what you should do to recruit offshore developers successfully.
1. Planning
Articulate your goals and the challenges ahead. Detail your needs and the technical requirements your future product should meet.
Create a document containing your vision of the application’s structure, features, future capabilities, and the list of technologies (web, mobile, cloud, on-premise) you will need. It gives you an idea of the approximate composition of the team you will need to assemble. Do you need only programmers and a tester? Or are a business analyst and an advanced UI / UX designer required? It would be best if you considered this at that stage.
Along the way, you can formulate the criteria by which you will select the candidates. Start with the basics, including portfolio projects, services cost, and professional expertise. In the analysis process, you are likely to expand this list with the team’s geographical location, the communication skills of its members, and specific soft skills.
Pay attention also to your concerns in the project’s planning and future phases. Draw up a list of questions you’ll ask job applicants to see if they fit your project’s requirements.
Choose the option of hiring remote staff, or plan how you will combine them.
Budget for each of the processes you’d identified, and estimate a budget for the project as a whole. Finally, draw up a detailed action plan to help you recruit successfully.
2. Selecting the candidates
Now you can start analyzing the offers on the market. Regardless of your preferred hiring option, you can always check the company’s reputation, rating, and reviews on specialized platforms and social media. You can also get in touch with previous clients of the teams you are interested in and get first-hand information about real-life cooperation with them.
If you know that you can’t objectively assess the professional suitability of developers, use the services of an independent technical expert. A small fee for his consultation and participation in the interview will save a lot of money in the future.
When selecting potential vendors, consider the availability of experience in your industry, and don’t be tempted by too low service prices. Basically, the better the qualifications of the specialists who get to you on a project, the less difficulty you will have in delivering it. This way, you will limit yourself to a list of a dozen teams with whom you find potential cooperation worthwhile.
3. Interviewing and choosing an offshore development team
Following the prepared checklist and comments from the technical advisor, evaluate each applicant on your listing. We recommend you pay particular attention to the answers about failures in previous work and their reasons, the organization of workflow, and the accepted practices of reacting to non-standard situations.
Find out how well-staffed the team is, whether it needs additional resources, and what kind of them it needs. Find out how the team members are assimilating the current trends in software development and how they are updating their hard skills. Ask what makes this team different from hundreds of similar ones and why you should choose it.
Having acquainted the applicants with the product specification and requirements for cooperation, find out if they have any objections to its content. If there are no valid objections, the applicant has been negligent in reviewing your application, or they intend to deceive you. Conversely, suppose the developer offers you reasoned alternative technical solutions and stipulates in what of his processes he can not concede. In that case, you can be sure that you will have constructive and responsible cooperation in the future.
Give yourself time to reflect on the communication results and weigh the pros and cons of the developers you like. This way, you will choose a team worthy of contracting and working with your product.
How to manage offshore development team
Being proactive and having regular calls with your team for formal progress reports is not enough to manage your workflow effectively.
Your staff must understand what they are being asked to do to get results. Therefore, you must create a collaborative environment so your remote workers don’t feel ashamed of asking questions, as might be the case in their culture.
Clarify whenever you feel you are only being told what you want to hear. And insist on an MVP demonstration at the end of each sprint to see progress directly.
Of course, email alone is not enough to manage offshoring software development. So you’ll have to master the features of messengers and online conferences, as well as project management and co-working tools like Trello, Slack, or Jira.
Certain management decisions and instructions to executives may require some IT expertise or, at the very least, a competent advisor on your staff.
Managing the work of developers from other countries creates an actual workload on top of different project management responsibilities. That’s why company executives often outsource not only the development but also the management of the process, buying turnkey software development.
Entrusting software development to an offshore outsourcing company, you get a project manager at the head of the team. He controls all the processes and is responsible for the result. As a rule, this person has industry experience, good technical background, advanced communication skills, and a proactive attitude. By delegating tactical tasks to him, you can focus more closely on the strategic needs of your business.
The PM role in different models of collaboration with offshore development teams is detailed in our article Project Manager role in Outsourcing companies.
How to check offshore development team quality
When you buy software development, you’re not just paying for its interface and features but also for the quality of the code that the team creates. Code clarity, comprehensibility, maintainability, and its extensibility guarantee that your software will function as specified and can be upgraded in the future. That’s why software quality control is vital at all project stages.
Clarity of tasks
Managing the development process, you must ensure that the offshore development team thoroughly understands the requirements set to the product code by the customer’s specifications. You will have to work with the team to develop a detailed list of expectations and needs and prioritize them. Based on this, you will set up quality control processes.
Organization and coordination
To effectively oversee the team’s work, you’ll need a common communication channel compatible with process management platforms (Trello, Jira), code publishing (GitHub), and testing tools. You will also use video conferencing services like Zoom, Google Hangouts, or Skype for regular meetings and debriefs after each sprint.
Using these tools, you will monitor your quality control routines, test your code for errors on time and check the MVP’s functionality when required.
Code access and control
If you want your remote developers to be transparent and controllable, make access to the code they are working on an essential requirement for collaboration. It is easy to do with GitHub, and you’ll always be aware of progress. That said, technical notes in the comments and code validators will help you navigate what’s happening without the knowledge of the programming language.
As you might have seen, personal control of the quality of a remote development team requires a deep dive into the process and is of little use in practice if you don’t have some knowledge and skills. And indeed, the quality of the code can be fully appreciated only by those who write it professionally based on the standards and rules accepted in the industry. It is another reason why cooperating with a professional team of outsourcers is better and safer for the customer.
Do you need offshoring software development? Academy Smart provides turnkey custom software development from scratch, ongoing project support, and staff augmentation services for clients with highly skilled IT professionals. Get in touch with our team, and we will discuss the implementation of your ideas in detail.
Hiring offshore development teams: Frequently Asked Questions
How do you get an offshore development team?
To find the perfect development team, you need to
- Formalize the software product idea and its technical specifications;
- Determine the team’s size and its appropriate level of technical expertise;
- Choose the region where you are comfortable having an offshore development team;
- Find candidates using the team search options on review platforms, social networks, freelancing services, outsourcing recruiters, or a professional IT-outstaffing agency;
- Interview applicants and select the best team, or entrust the selection of qualified IT staff and project development to an outsourcing company.
What does an offshore developer do?
Like any other developers, offshore vendors build software according to customer requirements, but the cost of their services is lower.
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