The key to outsourcing success is finding an offshore software development team that has enough engineering capacities and experience to help you meet your specific business problems. But how do you find the right one that has the tech and domain expertise you need, fits your budget, and which you can rely on?
To help you, we've compiled a guide on how to find, hire and successfully manage an offshore development team. It covers such aspects as what outsourcing destination to choose, how to select the best offshore development partner, what legal questions to consider, and how to work with your remote team.
Why hire an offshore development team
Setting up an in-house software development team is a challenging task. It requires a lot of time, effort and overhead costs to hire the experts you need and to manage them. That’s why so many businesses choose to focus on their core business functions and delegate software engineering to an offshore development team.
Here are just a few reasons why you will benefit from hiring offshore developers:
You can tap into best talent across the globe and are not limited by location;
Partnering with an offshore development team makes the implementation of new technologies easier as vendors usually have versatile expertise and a large pool of specialists;
Alleviated HR, administration, and infrastructure pain;
You can build your offshore development team according to your business needs and can scale it down or up whenever you need it;
You can choose different types of cooperation ( extended team, managed team, outsourced team) depending on the level of control and supervision you want to keep.
Teams of offshore dedicated developers are fully committed to your project and act as units attached to your existing onshore teams;
The benefits of such a partnership are tempting. However, you have to consider a few aspects to find, hire and establish successful cooperation with an offshore development team. So, let’s begin with choosing the most suitable outsourcing destination.
Where to find an offshore development team
Usually, businesses choose outsourcing destinations taking into account the geographical location, billing rates, cultural compatibility, and time zone difference. According to these criteria, Eastern Europe, Latin America, and Asia are known as the hottest spots to find offshore software developers.
Where to hire offshore developers: Eastern Europe
This region has a well-deserved reputation of a reliable IT outsourcing destination thanks to its growing talent pool, cost-effectiveness, and the constant growth of the IT industry.
Ukraine, Poland, Belarus, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Moldova, and Romania are the top Eastern European outsourcing destinations. The number of software developers in the region surpasses 1,051,000 experts with over 50K ICT graduates entering the market every year. The two countries with the most significant number of professional developers are Ukraine and Poland. Whereas, Ukraine has the largest number of offshore development companies in the region (1,600 ), followed by Poland ( 500+), Bulgaria (500), and Belarus (500).
Many influential sources have placed Ukraine among the top software development outsourcing locations: the PwC report, the Statista research, the A.T. Kearney research, etc. Moreover, the country was recognized by Gartner’s top 30 offshoring and outsourcing destinations in Europe. Businesses worldwide can benefit from the talent pool of more than 180, 000 software developers.
Check out the guide on how to hire a development team in Ukraine.
Where to hire offshore developers: Latin America
Brazil, Argentina, and Mexico are the best outsourcing countries by the number of professional developers in the region. However, Chile has made it to the 27th place in the HackerRank rating of the most skilled developers in the world.
Where to hire offshore developers: Asia
Asia houses almost 4M software developers. India, China, and the Philippines are the countries with the most significant number of professional developers. The numbers are 2.75M in India, 590K in China, and 190K in the Philippines.
How to find the best offshore development provider
Your business success depends on who you choose to work with. So, here are some steps which will help you to make the right decision:
Compile a long list of offshore development companies you will review in terms of their services quality, expertise, and security standards.
Take into account the reviews, references, success stories, video testimonials of the vendors you consider as potential partners. You can find this information on their websites, LinkedIn accounts, ranking platforms (Clutch, Manifest,Goodfirms, etc.);
Consider the size of the vendors and their recruitment capabilities, as mid-size and large providers are more likely to have resources you need internally than smaller companies;
Opt for the vendor that has a powerful employer brand and provide opportunities for professional growth. This way, the company will be able to find experts for the project promptly and scale up teams quickly.
Look for a company that has a solid experience in building dedicated teams that deliver software products similar to yours, preferably in your industry;
Pay attention to administrative facilities, equipment, and other infrastructure of your potential partner;
Make sure your potential outsourcing provider complies with international security standards such as ISO, PCI, HIPAA, and has an effective security policy;
Ask your potential vendor these questions to be sure that the provider is reliable.
Assess their level of communication and enthusiasm. Choose the vendor that takes effort to understand your business needs, sets up extra calls with you and sends you follow-ups. The eagerness of a vendor to clarify with you all the aspects and nuances ensures the success of your partnership in the long run.
How to sign a win-win contract with your offshore development company
So, you have chosen the vendor that suits all your requirements, and you start the negotiation process. Signing a contract is the next step to cooperation with the best offshore developers. There are, however, different types of contracts, based on three cooperation models: dedicated development team, time & material, and fixed price. You have to understand their peculiarities to choose the one you will benefit the most from.
Fixed price contracts are the best option for small and medium projects with clear requirements. Let’s say, you have a certain budget but not enough capacity to do it in-house. So, you fully entrust the project to the vendor that bears all the responsibility of the project's success. This is, however, the least flexible model, as any changes in the project plan require the complex change-approval process.
In a case with a dedicated development team model, you hire offshore developers entirely focused on the project. You can either take part in team management or entrust it to the vendor. This model is highly flexible and leads to the most viable results.
T&M model is usually used when a client needs an expert on a project temporarily. For instance, if you need the expertise of a DevOps engineer on demand, it doesn't make sense to allocate these specialists full-time, because it will lead to unnecessary expenses. So it is more effective to pay these experts only for the work done.
No matter which type of contract you choose, there are some vital aspects to heed on to avoid risks:
Defined strict deadlines for issuing an invoice and invoice payment and the outlined consequences for missing payments;
Liability clauses which define clear limits of responsibility for both parties;
Warranty clauses which guarantee the certain quality of provided services;
Notice periods - time frames associated with the project kick-off as well as scaling up and scaling down a team. Vague notice periods or their absence can affect project execution and delivery
Data protection rules, namely the deidentification, reidentification, and anonymization of data;
Client’s ownership of the code, when it is delivered and paid for;
Agreeing on the law of which country will be governing if the contract is international.
Now, we are moving towards the next step - how to establish successful cooperation with your offshore development team.
How to partner with an offshore development team
Successful knowledge sharing
Don’t underestimate the importance of knowledge transfer. Unshared knowledge costs money, especially when we are talking about IT outsourcing projects. Knowledge loss could result in lots of organizational waste when the whole process gets reworked from scratch.
There are two types of knowledge transfer flows: from a client to a vendor, or from a previous vendor to a new vendor. No matter which case is yours - the knowledge transfer plan stays the same. It all starts with a demo and the investigation and ends with setting up the environments, taking over business-as-usual, and the first successful release.
The successful knowledge transfer in IT outsourcing is about people, processes, and a product. The vendor has to understand what the product does, how it operates, and what people are responsible for specific tasks, to deliver on the client’s expectations. So, choose the vendor that has a robust knowledge transfer plan. It will make the entire journey smooth and safe.
Building effective communication
The more effective your communication with your offshore developers is - the more successful your collaboration will be. But to avoid misunderstandings and unmet expectations from both sides, be ready to create an effective working environment.
There are some ground rules which are vital for fruitful cooperation with offshore developers. The unification of coding practices within the team, establishing channels of communication, promoting knowledge transfer among developers are some of them.
Here are key tools that will help you to communicate with your offshore development team efficiently.
To learn more about ways to streamline communication with your remote development team - check out the article.
Working with an offshore development team: Success stories
There are many large tech companies and enterprises that have successfully hired offshore developers, shaped strategic partnerships with them and benefited from the cooperation. Here are a few examples:
Lebara is a global telecom that has shaped a long-term partnership with N-iX. Our software engineers have helped Lebara with software development, quality assurance, database administration, application and infrastructure support, and more. We set up an offshore development center for Lebara (100 + experts) and worked on such products as LebaraPlay, MyLebara, LebaraMoney, Bluepipe, and others.
Currencycloud is a global payment platform that enables companies to send and receive cross-border payments all around the world. The company started an ongoing partnership with N-iX in 2013. Our development team has worked on migration to microservices, enhancing the functionality of the platform, including APIs, core banking and payment services, customer-facing features, and more.
Fluke Corporation is a world leader in the manufacturing industry and a global producer of electronic equipment. N-iX offshore development team has been working with the company on developing enterprise automation solutions. The products are used by such leading companies as Honda North America, Toyota UK, Volkswagen, and many others.
These are just several instances of global businesses that have decided to hire offshore software developers and enjoyed the results.
A lot of businesses hire offshore developers to fill the skill gap, boost their capabilities and bring their products to market faster. Despite a thorny way of finding the offshore development team, it is worth the struggle.
However, there are some crucial aspects you have to pay attention to know that a particular vendor is a reliable partner.
Step one: choose the outsourcing destination which is culturally and (or) geographically close to your country;
Step two: research the companies in the chosen region, regarding their track record, expertise, and security issues;
Step three: sign a contract that will cover all of the possible issues and nuances of the future collaboration: financial side, the quality of the services, etc.;
Step four: establish effective communication with your offshore software development team and share all the needed information with them to make sure that you are on the same page;
Step five: scale a team up or down, according to your business needs;
Step six: deliver a reliable and secure product in cooperation with your offshore developers.
If you have any questions on how to find and build a successful offshore development team, please drop us a line. We'll be happy to help you.