Offshore Software Development Guide

A brief history of offshore outsourcing

The craze of outsourcing has been in the social market since 1989. And from that time, it has become an integral part of business management on a global scale.

  • Multisourcing
  • Crowdsourcing
  • Strategic alliances
  • Strategic outsourcing
  • Call centers, customer-facing departments, including marketing and sales services
  • IT infrastructure
  • Application development
  • Engineering support
  • Product design
  • Research and development
  • QA and analytics

What is offshore software development?

Offshore development is the process of developing software products or software solutions through another software organization or freelance software developers across the sea.

  1. Freelance developers: Sometimes the hiring cost of the whole company could go out of the budget especially if you need a certain number of developers for your project at that time the alternate option is to hire individual professionals from overseas to do your software project in your budget.

Why do you need offshore software development?

With the growing digital era, the need for establishing a modernized work environment in the organization has increased, however, for enterprises, the software department becomes one of the trickiest parts especially for non-tech firms.

  • Onshore: In this approach, your enterprise could outsource your business from the same country as yours benefiting the same geographical region for both of you.
  • Nearshore: Nearshore is another form of offshore outsourcing the difference is in nearshore outsourcing the enterprise outsources from a nearby country. (i.e. for the USA the nearby outsourcing countries could be Argentina or Mexico)

5 reasons why offshore is the Chosen One for the business world.

1. Cost-effective:

With the growing market, the businesses are constantly seeking different ways on how to gain a stable source of revenue while at the same time sustain their day-to-day operations to stay competitive or even survive.

developing a project
developing a project
Image Source: Economist
  • Increase productivity
  • Provides more job opportunities
  • Prioritize revenue-generating tasks

2. Focus On Core Business:

The main reason for a product being in the longest run in the market is because of delivering a successful software product that satisfies all the market demands.

3. The Talent:

Offshoring is not only cost-effective but also best for fetching the best talent from the pool. It means you can harness the talent that you can’t find in your local area.

Image source:
  • Development
  • Design
  • Customer service
  • Animation
  • Marketing, etc

4. Keeps Your Business Competitive

The competition in businesses at a global level has increased in this digital world, as with time innovation has become a vital factor in the success of a company.

5. Quality

Offshoring brings valuable results to your company. And one of the most preferable reasons is the quality of the project. The talent and skill that you could get through the global workforce.

How to build an offshore software development team?

Launching a new software development project is always stressful as we all want it to be a success among other projects. However, to ace the race you need to rely on a strong core and that is your software development team.

1) Define Your Team Type

The first step to build a team is to determine the type of team you want for your project, which helps you to create one as the outline of the team will be in your mind.

  1. Specialists: This type of team consists of highly skilled professionals in a certain field or domain. And having specialists on board with your benefits to address a specific matter with their years of experience, knowledge, and expertise, means more efficient and productive work. Also, the downside of this team could be the lack of communication, as it is not a strong suit of this kind of software development team.
  2. Hybrid team: The last one and most preferable is a hybrid. It is a mixture of the above mentioned two teams. The hybrid approach is the combination of the best from the two worlds, where the highly skilled professionals can focus on functional parts, and generalists can take upon the task of communication and cooperation inside the team.

2) Team Size

Now that you are through the type of team that will be best for you then we will jump to the second part, which is the size of your team.

  • Budget
  • Time frame
  • Available resources

3) Assign Certain Roles in Prior:

After reading the name you might wonder, isn’t the role of each member in the team will be pretty clear? As you would need software developers, various types of designers, project executors, etc.

  • Software Architect
  • Experience Designers
  • QA or Tester
  • Business Analyst

4) Communication:

Communication is one of the essential keys for the success of the software development project. If there is a slight chance of miscommunication among the offshore team members or between the team and your enterprise, then the risk of project failure is much higher.

  • Daily standups
  • Weekly meetings
  • Face-to-face meetings
  • Or video conferences

Tips to Manage Offshore Development Team Effectively

Now you have finally built the team, let’s start the task of maintaining that team effectively. Follow these tips to maintain your team effectively. Let’s dive in!

(A) Define Your Goals:

First thing first, if you assign a project to an offshore team without giving them the insight of the goal then it might land you in trouble.

(B) Create a Product Roadmap

Project Development RoadMap
Project Development RoadMap
Image source: Roadmunk

© Frequent Communication with Simple Language

With an in-house team, the communication is quite easy and frequently, you can speak with them face-to-face, whenever you require.

  • Microsoft Teams/Office 365
  • Cisco WebEx
  • Zoom
  • Trello
  • G-Suite

(D) Understand Your Offshore Team’s Perspective

This pointer is for all types of team projects. To comprehend their perspective, first, know who you’re working with for the project.

(E) Conduct Regular Demos

Providing the demo means demonstrating the standard result of the teamwork, which you will get at the end of each iteration.

(F) Invest in collaboration tools

Project management Tools
Project management Tools

What engagement development model should you follow?

An engagement model is a system, method, or plan that determines the foundation of collaboration between the client and the software development company.

  • Record
  • Cost of app development
  • Reputation

(i) Fixed Price:

The fixed price engagement model is the standard procedure in software development. It’s the same as its name — you will have a fixed price before the project development, and you won’t need to pay more than that.

  • Transparency between you and the offshore team
  • Comprehensive specifications
  • Easy to manage
  • Need more time for pre-preparation
  • You can’t make big changes anytime

(ii) Time & Material:

Time and material engagement models cost you as per the time and efforts the development team applies to the app development. As a client, you will pay for the materials and the hours consumed by the team members over the project.

  • Cost-effective
  • It has fewer low risks
  • Easy to modify requirements
  • Need to be involved through the project
  • No fixed delivery date

(iii) Dedicated Team:

The dedicated team engagement model is one of the best choices if you want a long-term collaboration for your big project that needs the development of a complex product from scratch.

  • Access to offshore experts
  • Real-time check
  • Overall control on resources
  • Possibility of disagreement
  • Need to spend more time

What are the risks you will face during offshoring and how to mitigate them?

Offshore is not only for the small enterprise but also the biggest companies seek for them.

1. Hidden Cost

The risk with offshore outsourcing is not about outsourcing — it usually includes several cases where offshoring clients get astonished by abrupt and extra fees that were never discussed beforehand during the legal agreement. That’s why most utmost offshoring companies prefer fixed rates.

2. Poor data/IP Security

There is a chance that a company or business’ data or IP might not be secured as per standard, and lack of security will result in data loss or leaks. There are a few incidents that occur to steal data, which ultimately become the downside of your business.

  1. To element this threat the second step is to seal the deal with a non-disclosure agreement with that said company or individual to secure your intellectual property.

3. Lack of Proper Work Distribution

If you think that offshoring means multitasker employees, then you are wrong, it is about recruiting diverse employees and assigning the task to those employees, who are efficient in their job. However, while a poor distribution task the progress of the project may be impeded.

4. Poor Communication

One of the biggest flaws of offshoring is the communication barrier, as your project will be outsourced in another country where their primary language is different. Although the most preferred language in offshore companies is English, however, the lack of proficiency might dent the communication between them and the offshoring company.

5. Quality Problems

The main reason to opt to offshore for businesses is because of the lower labor costs, which means they could hire more than one employee at the same price as for the one. However, with the low cost, the quality might not be top-notch in the cases of offshoring. This might happen because of inexperienced employees, lack of team management, inability to comprehend the requirements, and so on.

Final Thoughts:

So, any business-oriented personality needs to stay updated with the freshest tech trends to comprehend the market quickly. The world of IT is a big ground field, and there is no surprise to find new talents every other day.

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