The IT outsourcing market was valued at $ 526.6 billion in 2021, and it is expected to reach $ 682.3 billion by 2027, registering a CAGR of 4.13% during the 5-year period from 2022 to 2027.
It is no surprise as more and more companies have become interested in requesting development services overseas in recent years.
After entering the international market, the offshore software providers now present various prospective opportunities to the established companies in the US and Europe.
Offshore development services are generally performed in countries where labor cost is much lower than in the country where the services are received, which is extremely convenient for business owners and profitable for outsourcing IT organizations.
If you have decided to outsource your software development, the first thing to do is to define your main remote team management tactics. Despite all the amazing benefits of outsourcing like cost-effectiveness, speed, and top-notch service quality, it is really challenging to manage an offshore development team located miles away from you.
So, in this article, we will teach you how to manage an offshore development team effectively and analyze the best practices for managing offshore resources.
The Importance of Outsourcing Software Development
Outsourcing has become a promising alternative for companies that have already experienced a talent shortage and now want to enhance their business performance.
According to McKinsey, over 87% of organizations either already encountered or expect to face this issue in a few years. For the offshore team of professional developers, it is just a perfect time for offering their services to various companies.
Benefits of Working With Offshore Development Teams
Both sides will get the benefits: for the offshore development teams, it is a new ground for work, and for the companies — a more cost-effective method for getting talented employees.
Outsourcing software development gives you plenty of flexibility starting with the technical skills you want to obtain for your project, ending with the budget for a specialist and your collaboration length.
3. Access to a Wide Range of Skills
Outsourcing gives you unique access to a wide tech talent pool so you can choose professionals with different levels of expertise and different technical backgrounds according to your business needs.
4. Quick Start of the Development Process
You don’t have to waste time searching, recruiting, and training the relevant professionals. Outsourcing enables you to select from different specialists offered by your IT partner so you can start the development process right after signing the contract.
Challenges of Collaboration with Offshore Software Development Teams
However, there are still some points to consider before starting to cooperate with the offshore development team. Thus, you will be able to get ready for the various challenges while managing offshore development teams and find the best solutions for any issue.
- Time-zone differences. If the development team is located really far away, you can fail in its management;
- Language barrier. Without establishing the right communication, it will be extremely difficult to create an effective workflow between you and an offshore development team.
- Cultural differences. Asian developers have their own cultural peculiarities that you will have to deal with. If it’s an option, opt for Eastern European software development.
- Poor communication. If main requirements, project details, and daily tasks are not communicated effectively, chances are that the end result won’t be as you expect.
- Remoteness. Not all companies know all the pitfalls of managing offshore development teams located overseas. It creates plenty of challenges so coming up with a management strategy is obligatory before considering outsourcing.
Effective Tips for Managing Offshore Development Teams
So, what are the main ways for enhancing the workflow and improving the communication with your offshore development team? Here are some effective tips for you on how to manage an offshore development team:
#1 Develop a Clear Product Vision and Explain the End Goal
If you want to get quality results and smooth collaboration between your organization and an outsourcing team, it’s not enough to just assign the task and expect it to be done. Managing remote software development team requires much more involvement and effort. The primary thing to do is to share the general picture of your product and clearly explain your end goal.
The developers need to understand what your company is all about, what is your main vision, mission, and values, what product you want to create, and what user problems to solve with the final application or software.
Once they are aligned with all the important details, software engineers will be able to make more well-informed decisions during the work process and ensure the desired progress and quality.
# 2 Build Detailed Product Documentation
Another important thing that is required in order to make your offshore team management as effective as possible, is creating detailed and informative product documentation. It’s obligatory if you want to create a modern top-notch quality product. It will help software developers to stay aligned with all the requirements, prevent code failure, and will also help you avoid a potential technical debt.
# 3 Set Accurate Deliverables and Milestones
The deliverables and project milestones are the solid basis for your success with offshore development teams. Before the work even begins, you have to invest your time and effort into the research and planning phase.
Defining key performance indicators, milestones and deliverables will help you track the progress and evaluate the project’s success.
# 4 Consider the Key Project Knowledge
The employee onboarding process is one of the main aspects which every company should certainly pay attention to, as it can considerably influence the working performance of your new staff.
By providing all the project knowledge to your team extension members, you will be able to organize the processes more effectively and get the work done much better.
Furthermore, you can create a database for each project, and share it with your software developers. Thus, it becomes much easier for the development team to get started with the new project and run it effectively.
#5 Establish Clear Communication
Needless to say, communication with your offshore team is also critical for performance. However, the language barrier can sometimes make it difficult to present the tasks for your workers, especially for those who aren’t fluent in your native language.
For this purpose, use the specific software targeted at providing clear communication between the company members, like Outlook emails, Skype, or Zoom. That’s a quick and effective way to communicate with your developers and seek clarity where the verbal communication wasn’t clear.
It’s paramount to match your schedules and have regular calls to make sure that everything goes as planned and there are no bottlenecks for your offshore team.
The communication between you has to be as transparent as possible so don’t forget to provide instant and clear feedback to prevent any potential misunderstandings. As a result, you can easily track the progress and always point out the critical issues to the offshore software development team.
Additionally, it is a great option to regularly arrange the meetings for Q&A sessions during the project completion. This tip can greatly improve the workflow performance, so the project will be done much faster and better.
#6 Focus on the Working Conditions Improving
The skill gaps issue is the one every company has experienced at least once in their practices. And this issue becomes even more clear when you manage a team that gets constantly reshaped, as you lose a lot of time, resources, and investments on the employees’ onboarding and orientation.
That is why companies have now realized how difficult it is to find and how important it is to retain qualified and talented workers.
By improving the working conditions, and providing them with professional growth, training opportunities, and fair compensation, you will be able to prepare a professional offshore development team.
Make your company attractive for the new talented employees, and try to build trustful, loyal and healthy communication between the teams, which is a must for a successful partnership.
#7 Use the Defined Tools for Work
The common problem of the offshore development team is that remote software developers can’t understand the project’s core idea and solutions. One of the main reasons it appears — is the inconsistent development environment across the teams.
As a result, you can get the poor quality of software, late detection of bugs, and a list of core integration issues.
To resolve this problem, it is critical for all remote developers to use the defined tools for software development, control, and improvement.
This will help you to make sure all the essential processes are done according to the project plan, and greatly help you to manage an offshore development team effectively.
# 8 Motivate Your Team
Managing offshore development teams and maintaining the good productivity level of remote employees ain’t easy. The last but very important advice is always to motivate your offshore development teams.
Both the in-house workforce and externally hired specialists need the same level of encouragement to achieve top-notch results. It’s even more critical if we are talking about long-term projects.
Choose your own motivation strategy. Whether it’s investing more money on business trips to meet your newly hired staff to add more personal touch, individual video calls with each team member to have strategic sessions, organizing an informal corporate event to let them simply have fun after work, or any other motivation technique that works for your company — go for it and you will have result-driven employees who will work effectively in the long run.
What Are the Hidden Costs for an Offshore Development Team?
For sure, managing a remote team of developers implies huge investments in working resources, time, and costs.
Nevertheless, it is still much more cost-effective to hire offshore developers, as you will get the same, or even better quality of services with paying less money, that is why companies have already been using this model in their workflow.
The additional expenses you should keep in mind usually include
- the onboarding and orientation processes;
- procurement of equipment;
- company database creating;
- offshore workflow organization and management;
- workshops organizing and knowledge sharing, etc.
Though the costs may depend on the company’s specific targets and working processes, more and more companies find these methods really effective for managing offshore development teams.
Having mastered the offshore working processes once, your company will be able to hire talented workers from different parts of the world.
Furthermore, by enhancing the internal workflow processes of your company and the offshore teams, you will significantly increase the quality of the projects done and take your company to the next level of development.
All in all, offshore team implementation now has become a useful and profitable method for companies to perform their tasks effectively.
However, there are still some points to consider before hiring the offshore development team as it implies planning and managing the communication, workflow, project targets, knowledge, etc.
But having created a dedicated development team, the companies can actually get a lot of benefits for their development and ROI improvement.
We know how important and challenging remote employee management may be. That's why we shared our practices on how to manage an offshore development team. Our professional team at Intellectsoft, empower various companies and their workforces with innovative solutions and modern approaches.
So, if you and your organization are looking for an offshore development team, talk to our experts and find out more about the topic and how your business can get the full advantage of collaborating with an offshore team!