Breakdown of Hiring An Offshore Software Development Team

Offshore software development services have historically been the best option for startups and SMBs, outperforming both onshore and nearshore options. It is generally believed that the primary factor is a favorable cost structure. Hiring developers with the necessary level of technical expertise from a significantly cheaper geographical area across the globe is a primary goal of offshore outsourcing. And it accomplishes not one but two goals at once. In this piece, we'll delve deeper into the topic of enlisting an offshore team for software development.

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What is An Offshore Software Development Team?

One form of outsourcing, known as "offshore development" or "offshoring," involves working with a foreign service provider to create software. The word "offshore" refers to the fact that your specialized development staff is located in a different time zone.

Outsourcing information technology (IT) tasks, such as cybersecurity, app development, and IT infrastructure services, is popular among businesses. Offshore developers provide more services than only app development. Services including backend and frontend web development, UI/UX design, DevOps, quality assurance, and product management are also available. 

Let's look at some of the main attractions of outsourcing software development to an offshore team so you can see why it would be a good fit for you. 

Benefits and Drawbacks of Hiring An Offshore Software Development Team

Benefits

Cost-effective services

The primary reason why various businesses are hiring an offshore development company is that the services of an offshore development team are cost-effective. Hiring full-time in-house IT experts can be expensive, especially for developed countries like the US, the UK, Australia, etc. The cost can double up when businesses have multiple projects.

The employee’s payroll includes their basic salary, taxes, incentives, extra benefits, equipment expenses, electricity consumption, and daily employee amenities. Thus, hiring an offshore development team will save a high cost as well there is zero recruitment cost.

The cost will be depending on the number of offshore teams. Thus, you have the liberty to choose how many team members you need to work on your project. You can even hire different offshore developers from other countries, depending on your project.

Access to specialized software developers talents

With the advanced technologies developed frequently, the demand for specialized developers increased. It takes a lot of time to find and recruit the right candidate to deliver the exact requirement.

Hiring an offshore software development team leverages you to have access to specialized software development talents at your fingertips.

Different countries’ offshore development companies have vast talents of software developers experts, which will help you develop any software needed in business. They know the exact requirement; hence it saves your time to explain them.

Enables to stay focus on core business function

Some software development techniques such as mobile app development, UX/UI designs, blockchain technology, website, etc., need more focus, and it is a time-consuming process.

While focusing on software development, constant team supervision can distract from core business functions. When business owners choose to outsource an offshore development team, it helps to divert the attention and focus more on business.

The offshore development company has a team of experts and supervisors to look after them. The synchronized work helps the business to achieve its target.

Exposure to advanced technology in economical budget

For small businesses, it is pretty challenging to get access to the latest trending technologies on a budget. It is crucial to follow the trend to attract the right audience with the fast-paced tech-savvy generations around.

Hiring an offshore software development team leverages the company with superior technology and allows them to keep up with new software skills economically.

For instance, the Manchester finance company hired Seoul’s offshore development company to develop a blockchain technology fintech app. Because South Korea was the first country to adopt 5G technology, they have access to the fastest technology. Therefore, they deliver high-quality structured apps.

Reducing liabilities and making more room for new opportunities

With a new business launch or planning to expand the business, it comes with a huge responsibility. Sometimes you need to give up some business opportunities because you have a lot on your plate and are afraid of being unable to deliver the project on time.

When working with an in-house team, they are responsible for everything right from developing and looking after a timely upgrade of the website, mobile applications, social media posts, editing photos and videos, and much more. More members you recruit will boost the budget.

Outsourcing an offshore development company helps you work on the budget, reduce the liabilities in the business, allow you to take more significant projects, and your in-house team can help you with daily tasks such as social media promotions.

Different time zones help work done faster

Different time zones are one of the highest contributing factors in working with offshore software development companies. Western countries outsource their developers from eastern countries because they have almost a 10–12 hours time difference.

While the offshore development company in the Eastern countries started working, the Western company was done for the day. Thus the next day, when the Western country company starts the day at the office, the majority of the work will be done.

The overlap time is incredibly beneficial to both companies. For instance, there is an urgent mobile app software development upgrade that needs to be done for the US company, and they outsource the work to the Indian company. By the next working day, the upgrade will be ready.

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Enhanced service quality and guaranteed fewer errors

The offshore development team has a dedicated team that works on a particular project instead of working on multiple projects. Thus, it enhanced the service quality and guaranteed fewer errors.

For instance, a blockchain technology developer will work on blockchain applications only, and UX/UI developers will deliver the projects related to graphics. Every team member’s roles are well-defined; therefore, it is much easier to finish the project on time and hit the ground running.

Working with dedicated team members improves the overall development cycle and ensures high-quality product results.

Predictable cost

Hiring offshore developers helps cut down the business expenses and ensures that the cost is predictable, so there is no surprise in the budget.

The agreement between the hiring and offshore development companies defines the project’s cost, terms of engagement, timeframe for submission, and other possible expenses before starting the project.

You can also hire the team on monthly or quarterly payroll. It helps the accounts department to have more visibility and scale business output. Thus, even though there is a change in the cost of development in the middle of the project, it won’t affect the company budget unless the difference is vast.

Additionally, major offshore development companies have fixed-cost packages depending upon the software products you outsource the task to them, including the scheduled maintenance. Thus, every cost is fixed, and no invoice surprises.

Increased work efficiency

The other benefit of outsourcing an offshore development team is to minimize the load on in-house employees. Having expert engineers on board with a unique set of skills makes the process easy and improves business productivity.

The development team is assigned to a particular task, and their experience brings the best possible innovations. You have the liberty to set the task to a different offshore development company and choose the best work that met your satisfaction.

Scaling the business better

Hiring an offshore development team is considered one of the best strategies for scaling the business and low-risk growth. In case of slow pace in the industry, you can work remotely and spare the thought of firing employees.

In the current IT sector, the average lifespan of technology is 3 – 4 years, which needs any business to develop an agile team that can quickly adapt to the new skills. While having an offshore team, you can easily be assigned the work to the team which can handle it all.

Whether it is mobile app development or website or a software upgrade, additional designs needed in software, you get a team with good insight and innovation, saving you time from hiring a team by yourself.

India is one of the countries other than South East Nations and Latin America, where it is becoming popular for offshoring teams hired by the USA, Canada, Germany, etc., due to the attractive IT policies, experienced developers, and flexibility.

Drawbacks

Different Mindset

Because of the cultural gap, you may find yourself in awkward circumstances. Having this knowledge will allow you to properly plan and develop your project in accordance with the criteria.

Gender issues, religious beliefs, cultural practices, tradition, and so on are all possible sources of discord. Consists of the mindset and work ethic as well. Established businesses, especially those with a global presence, may not hold much significance for you. However, you can avoid this potential issue by looking at their previous work and talking to people who have worked with them before.

Data Security

It's possible that outsourcing to other countries can help businesses reach their objectives. If you must communicate sensitive information, however, you should establish a legally binding agreement with your business partner. If you need a security document as a reference, you can look at our NDA (Non-Disclosure Agreement), Security Protocols, and other security documents.

However, obstacles may appear that we did not expect. You may sign legal security documents, but hackers still pose a risk to sensitive information. 

Conflicts in Culture and Language

Having to work with experts from other nations inevitably presents challenges, such as language and cultural barriers. This disagreement has the potential to cause major misunderstanding and misalignment of business objectives between the parties involved.

When compared to cultural differences, language difficulties are easier to overcome. Since English is spoken all across the world, you should prioritize finding suppliers and employees that are fluent in the language. Even if they don't speak it as well as a native speaker, they can still follow directions and complete assignments with minimal problems. 

However, cultural disparities are more challenging to overcome. To close this gap, you should look for alternative methods. It can help things go more smoothly if you start by picking a location that shares many of your cultural values and introduce essential cultural norms early on in the onboarding process.

Problems with Vendor Management

In theory, this shouldn't be an issue, but in practice, especially when coordinating with several service providers, it often becomes one. Since you can't see them or communicate with them directly, the challenge may increase. 

If you don't have a strategy in place for managing your vendors, everything will develop into a chaotic disaster. Therefore, it is important to have a reliable method for tracking progress and evaluating output as part of your project management toolkit. Managing your vendors is a must if you're going to outsource software development.

How to Hire The Best Offshore Software Development Team?

Look through the 6 following steps for hiring a suitable offshore team:

Step 1: Establish the Needs of Your Project 

Working together with the offshore team is all about making a great final result. That can be done by giving the development team a detailed rundown of your intended outcomes, milestones, and technical requirements. Some advice is as follows:

1. Set specific objectives:

Create objectives that describe the time frame, the issue, and the resources required to finish the project. You can prevent misunderstandings and achieve your goals with this method. 

2. Make a record of the technical details:

If you want your outsourced team to be able to create the precise app you need, you'll need to provide them with a thorough description of your product's category, features, design, and functionality. Think of it as a written record of your desired outcomes, product vision, and expected deliveries. 

We recommend that you divide the overall job into manageable chunks with firm due dates. As a result, you'll have an easier time keeping track of the project's development and a better shot at completing it on time and within budget.

You should also outline the technologies that will be used in your eventual product. Finding the right developer requires first identifying the frameworks and technologies that will be used. 

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3. Determine costs and timelines:

After deciding on the scope of your project, you should estimate how long it will take and how much money you will need. You may then better allocate resources and establish reasonable goals as a result. 

4. Assemble pertinent data:

Gather all data that may be relevant to your research, such as:

• Models of design;

• Comparison to rivals; 

• One's own particular tastes.

In the absence of sufficient information, you may wish to initiate a product discovery phase with a prospective vendor.

Following these guidelines will speed up the process of locating an appropriate offshore development partner for your project and set you up for successful recruiting and product development from the outset. If you and your remote team members are on the same page about your end goal, you'll be less likely to run into problems in the future.  

Step 2: Search and Shortlist Offshore Software Development Teams

If you already know what you want to do and how to make it, you may focus on finding businesses that specialize in those areas. Think about things like location, hourly rates, team expertise, and company portfolio. 

Look into the work portfolio of possible collaborators to see if they have experience with projects like yours. Check out what prior customers have said. Consider the company's core principles and business culture as additional variables in facilitating effective communication and operations. 

At this point, you will whittle down your options and create a shortlist of the most suitable international software development firms.

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Step 3: Compare the Best Offshore Software Development Companies 

The following criteria should be used to evaluate the companies who made the cut:

• Technical Skills: Find out how proficient they are with cutting-edge tools and technologies, and how well they can use their technical expertise. 

• Time Zone Difference: Coordination of work schedules is essential. Make sure your operating hours coincide with those of the offshore developers.

• Language Compatibility: Having a common language with your offshore development team will undoubtedly boost efficiency. 

• Costs: Each possible business might be asked to provide you with an estimate based on your specifications and complete a trial run of the work. By comparing the bids of the shortlisted firms, you can determine which offers the best value.

Doing so will give you a comprehensive understanding of the processes, attitudes, and results of the offshore teams' work and solutions.  

Have them go through a technical interview so you can weed out the unqualified. Either have them take a brief test that won't take longer than 4 hours, or have them take an online coding assessment test. The greatest programmers can be identified by testing their knowledge of various programming languages, tools, and frameworks.

Step 4: Conduct Interviews

Non-technical factors should be considered alongside technical ones when assessing a possible offshore software development team. This entails their interpersonal, decision-making, and linguistic proficiency. You can learn more about the team's work style and whether or not they are a good fit for your project by conducting interviews that are not technical in nature.

Challenge the interviewees' ability to communicate difficult ideas by having them clarify them in layman's terms. Consider how quickly they answer your questions and how attentive they are to your problems.

Step 5: Choose the Cooperative Approach

Using an appropriate collaboration model will be crucial in the achievement of your partnership goals. These days, the following are the most often used models in the technology industry:

Fixed Price: 

This methodology works well for short-term initiatives with clear goals and objectives. You're putting your faith in the service provider's ability to get the job done, so they should get full control. There is a mutually agreed upon total price for finishing the project. It reduces financial risks but comes at the cost of adaptability due to the lengthy approval processes required for any modifications. 

A Dedicated Development Team:

The dedicated development team model is the way to go if your project is going to take a long time and will require constant innovation and adaptation. Hiring a group of engineers to focus only on your project from its inception through its completion is another viable alternative. A single monthly wage covers everyone's responsibilities. 

Time and Material (T&M) Model:

With this adaptable pricing scheme, you only pay for the time and materials that were actually used on your project. This method encourages you to participate throughout the development process, making it a good fit for projects that are prone to change or require incremental enhancements. In addition, it lets you modify standards on the fly.

The table below compares three aforementioned approaches:

Different cooperation models for offshore software development each have their advantages and can be tailored to meet the specific requirements of a given project. Informed decision making and productive collaboration in software development are now possible.

Step 6: Let's Get This Project Started!

Signing a contract that guarantees both parties' protection and understanding is an important first step in laying a solid groundwork. As you near the end of the process of employing an offshore staff, take this time to lock down working conditions, resolve legal concerns, and deepen confidence and transparency with your partner. 

A well-written contract is a must for every productive partnership. Make sure it explicitly states the following essentials:

• Hourly rates and timeframe estimates;

• Payment details;

• Product ownership; 

• Warranties;

• Legal compliance.

Involving an offshore software development team means giving them access to potentially proprietary data and insights about your business operations. Therefore, it is crucial to sign a Non-disclosure Agreement (NDA) to protect your intellectual property and stop the spread of sensitive information. Your offshore development team can get to work once these steps have been taken care of.

How Much Does it Cost to Hire Offshore Developers?

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When deciding on a country for offshore development, many aspects must be taken into account. But let's be honest: companies choose offshore outsourcing to cut expenses, therefore prices usually determine where the work is done. 

Less economically developed regions, such as LATAM, Asia, and Eastern Europe, typically have slower growth rates and more experts than more economically developed regions, such as the United States, Western Europe, Australia, and others. Let's compare the hourly wages in North America to those in those countries to see how they stack up. 

Source: Accelerance 2022 Global Software Outsourcing Trends and Rates Guide

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Conclusion

Today, any company that wants to grow and prosper should seriously consider teaming up with an offshore software development firm for their software development projects.

Whether you choose to build your own internal team of developers or work with an offshore firm, there will always be drawbacks. However, utilizing the services of an offshore software development company will allow you to save money, boost output, and expand your firm. You can rest assured that your project will be using cutting-edge technology thanks to their extensive experience, knowledge, and focus in this area.

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