An IT outsourcing strategy is growing in popularity as the world changes. Due to the effects of COVID-19, worldwide spending on IT solutions is expected to reach around 1.2 trillion US dollars in 2022, representing an increase of 11.2% over 2020. It also had an impact on the IT outsourcing market, which is estimated to generate a revenue of $413.7 billion by the end of 2022.
Outsourcing is a tried-and-tested strategy used by businesses to access global talent, streamline their operations, and enable entrepreneurs to concentrate on their core business objectives.
Startups may create a high-quality MVP while saving money and time by working with an offshore development team.
According to a 2020 Deloitte study, organizations choose to outsource their development projects for financial reasons 70% of the time. Reduction in cost has been considered a key, but not the primary factor in tech businesses’ decisions to employ offshore software development companies, according to the same studies from years past.
Additionally, it frees up the firm from worrying about staffing by allowing businesses to experiment, develop new features, and work through their backlog of immediate and future tasks.
Although outsourcing has many advantages, including cost-effectiveness and high-quality service, managing overseas development teams is a real issue.
So, in order to assist you to be ready for the experience of IT outsourcing, we will explore the ins and outs of effectively managing offshore development teams remotely and analyze the best practices for managing offshore resources.
What is an Offshore Team? Its Challenges & Benefits
A set number of experts that work for you remotely is typically considered an offshore team. These individuals can be found anywhere, and all communication is carried out via phone conversations, video conferencing, Email, and many more.
To leverage the best talent in the technical world, remote teams are formed that work on common goals. Such a scenario has a lot of benefits, however, has a few challenges as well.
Challenges and their effective solutions:
When working with an overseas workforce, there can be some hiccups, however, with the use of technology and the right team structures, these can easily be resolved. The following are a few of the most common challenges and the ways to resolve them:
- Different time zones: Coordinating with a team working in different time zones might sound challenging. But, this can easily be overcome with the use of the latest collaboration tools like chat tools, shared spaces, email, video conferencing at overlapping working hours, and many more.
- Delays in delivery: Unless the team, although working from different locations, is not working cohesively, there is bound to be delays in delivery. But, this stands true for the teams working at the same location as well. Working on agile technology is the best way to overcome this challenge. Aside, you can also use management software like Jira or Asana.
- Security and privacy: The data is critical and should be handled while keeping all the parameters of confidentiality intact. Getting the right agreements and nondisclosures, this challenge can be taken care of.
By adopting various business security strategies, one can easily overcome the challenges. However, the benefits overweigh the challenges faced while managing the offshore teams. The figure above demonstrates the common benefits of working with an offshore team.
- Faster onboarding – Rather than hiring the complete team, it is easier to hire an offshore software development company.
- Enhanced potential for innovation – You get to work with the best talent around the world who can contribute with different innovative ideas to manage the project for completing it successfully within specified timelines.
- Cost-effective – Offshore talent from various regions can be hired at much lower hourly rates/salaries. You are guaranteed to save some money with this strategy. For instance, offshore developers in the US and Western Europe often charge $60 to $200 per hour, whereas Central European developers typically charge around $50.
- Scalability – Getting an offshore developer/team provides you the flexibility of paying on a project basis. The resources can be hired only for the required time period whenever you plan to scale your project. While you are in the scaling up phase, technically your team (offshore and onshore) is working round the clock.
Tips/Best Practices to Manage an Offshore Development Team
There are a lot of benefits and some challenges, that can be overcome smartly, in managing the offshore team. A few basics are – transparency, proactive communication, good team bonding, ownership, and effective problem-solving. Keeping all of these in mind, here are the top tips on how to manage an offshore team effectively to achieve the best outcomes.
1. Look for the right talent
Focus on fully comprehending the requirements of your business, your product, and the technical infrastructure. It’s crucial to be able to translate project needs into technology. Finding the right talent will be simpler if management is in agreement from the start about the skills required.
Additionally, keep in mind that you now have a global talent pool at your disposal. Make sure you’re concentrating on the required skill sets.
2. Describe the priorities and goals in detail
Setting specific demands and criteria is crucial, much like finding the ideal offshore team. Prioritization is one of the most crucial skills. Make sure to have a set of priorities in mind and to be as explicit about your requirements as possible during the entire process. You can significantly reduce the amount of time spent afterward by defining expectations upfront.
3. Make clear communication
You have no trouble informing your coworkers about the status of the job in progress or the present scenario when your entire workforce works in the same office. However, if you work with a virtual offshore team, you must rely entirely on various forms of communication. Teams now have access to a variety of technologies to facilitate effective and smooth everyday communication. Three of them are particularly well-liked: Zoom, Skype, and Slack.
With effective communication, you can stay on top of everyday developments and events, as well as solve problems as they arise and make appropriate adjustments to the task. Everyone in the team will understand their value and how much depends on them.
4. Concentrate on improving working conditions
Every company has encountered the problem of talent gaps at some point in its operations. And managing a development team that is continuously changing size makes this problem much more obvious because you waste a lot of time, money, and resources on the onboarding and orientation of new hires.
Because of this, businesses today understand how challenging it is to attract and how crucial it is to retain talented and competent employees. You can create a competent offshore development team by enhancing the working conditions and offering them possibilities for professional development, training, and fair compensation.
Make your business appealing to new, skilled hires and work to foster the kind of good communication that is essential for successful cooperation between the teams.
5. Allow enough training time
Even the most talented programmers require some time to learn the technologies and products. Due to inadequate time and/or training, management abandons offshore teams all too frequently. A development crew that is better trained will be more effective.
6. Get to know the people
Even if communicating with your team is getting simpler, it’s still crucial to comprehend and be aware of the human element. If you don’t consider the human aspect, cultural hurdles and different time zones can frequently be challenging to overcome. To improve your leadership, use patience and make an effort to get to know the members of your team.
When considering and establishing an offshore development team, keep in mind that every team will have unique problems. Offshore development is possible if you understand your product and know how to prioritize, communicate, and understand your team.
7. Employ agile principles
The offshore agile development approach is widely accepted as a successful development team management technique. This technique offers a transparent framework that encourages iterative and incremental approaches and adjusts appropriately at any level of market situation or feedback. Quality and efficiency are given top priority in the agile methodology. Employ this technique in conjunction with your team management system to boost the output of your offshore team.
With the tips listed above, getting started with the right team in place, even if working remotely, will be simpler. While having the right team is important, setting the right parameters for the project at the beginning is equally important, such as:
- Tracking the development progress – Slight miss on oversight of the project progress may lead to huge expenses from a delivery perspective. When working with an offshore team, the agreement and billing terms should be linked with deliverables and should be clearly laid out. Having software to get oversight on the project progress and hours spent will be a good idea. This will also help in eliminating reworks or rebuilds.
- Tools to be used and the required permissions to use these tools – It is vital to ensure the right permissions of access to the tools to get complete oversight of the project. Also, it is best to set the expectations of work deliveries, whether you want them to work separately and upload the final work or they will be required to log in to your backend data system.
- Protocols and processes – As stated above, deploying agile technology is best to manage the project. Having said that, it cannot work on its own. Aligning the right permissions, security checks, and internal protocols is critical. Having a proper approval process works well in this scenario.
- Security – Getting the agreements signed will ensure the security of the project. Providing written documents on the processes will ensure transparency and accountability. Managing the team will automatically be streamlined.
- Schedules – To manage the project, and ensure a seamlessly coordinated team, it is important for the project manager to schedule the meeting in a manner that the time zone difference is taken into consideration. Strategically planned workflow between the geographically spread team will prove to be your strength in managing an offshore team effectively.
How to Maximize the Productivity of the Offshore Teams
Effective collaboration is the key to the successful management of the offshore team. Collaboration of what or who? When a work strategy is designed to execute the project, multiple teams play important roles. And, as we have been talking about teams working from different locations, failure in collaboration among these teams will bring failure to the project.
One can overcome this challenge by providing the required access and transparent environment by facilitating them with the right collaborative platforms. Let us explore some of the tools and processes that facilitate communication in real-time. These tools also facilitate the combining of job material and status reporting in one place.
Email is the basic communication tool. There are other ways too, but for some requirements, only the email works well. For example, getting the required approvals and processing documentation. It should be used only when required. For security purposes, the company email addresses must be provided to all the team members working on development projects.
The commonly used chat tools are Skype, Google Meet, Slack, and Zoom which are easy to use and transparent. Easier communication through these chat tools not only helps in easier communication for faster project deliveries but for building team relationships and promoting better teamwork.
Project management tools like Jira, Trello, and Asana Jira put all your project material in one place. Read-time status, workflow dependencies, and statuses, all are made available to all the team members all the time which does not leave any gap for misses in deadlines. Project managers can oversee the project progress even when not present physically with the team.
With the use of the above-mentioned tech stacks, collaboration becomes easier. The team members too feel valued and related, strengthening the team bond which in turn leads to effective management of the offshore teams.
How can Appinventiv be your partner in success?
Appinventiv is an offshore software development company with specialists operating from several time zones. We have been assisting a number of business owners and brands from various industries such as Ikea, KFC, Dominos, Adidas, in realizing their ambitions to build digital solutions.
We offer a wide range of software development services, such as software consulting, enterprise software development, custom software development, and software integration. We can help you with your software development needs while keeping the stress of managing a software development team offshore as minimal as possible. To guarantee the same, we take the following approaches :
- Use an agile methodology that divides the project into phases. Delivering small phases ensures timely delivery and opportunities to tweak the requirements on the go.
- Daily SCRUMS streamlines the planning of tasks such that QA testing can be taken care of simultaneously.
- Weekly meeting with clients enables smooth communication by keeping the client posted on the progress of the project.
Offshore development is a difficult and multifaceted process that is not always efficient, especially if the development team is situated on the other side of the world. To achieve maximum effectiveness and remarkable success on your project, it is in a company’s best interest to be aware of the potential dangers, benefits, and drawbacks of offshore development, as well as the strategies you can use to mitigate those risks.
Q. How to manage an offshore development team?
A. Here are some tips to manage software development teams.
- Look for the right talent.
- Describe the priorities and goals in detail.
- Make clear communication
- Concentrate on improving working conditions.
- Allow enough training time.
- Get to know the people.
- Employ agile principles.
Q. How to hire an offshore development team?
A. Follow the below mentioned steps to hire an offshore development team:
- Clearly define your requirements.
- Adopt a systematic interviewing procedure.
- Perform rigorous technical tests.
- Aim for cultural affinities
- Establish a quick hiring process
- Make prospective candidates want to join you.
Q. What are offshore software development services?
A. Offshore software development services are those services that are provided by a team located in another country or region. A company establishes a new office in another nation, termed an “offshore development center,” and hires a specialized software development team. Just like your local team, they are permanent personnel, but they are headquartered overseas.
Q. What is offshore team management?
A. Offshore team management is similar to managing on-site teams. It includes various activities that bind a team together by bringing the team members closer to achieving the set targets.
Q. How to work with team members who are offshore?
A. Working with development teams that are spread across multiple time zones is made easier with daily stand-ups, which are brief 15-minute meetings. The purpose of daily stand-ups is to share daily goals, set agendas, and talk about issues. Such routine meetings might be a straightforward but efficient approach to working with offshore teams.