Outsourcing is increasingly becoming popular globally. The phenomenon has been particularly significant over the last few years. Several factors have contributed to this, but put simply, outsourcing is a more cost-effective means of hiring qualified talent to work on your development project.
While outsourcing is fast becoming popular, it can be quite difficult to navigate. In this guide, I will help you understand the modalities and navigate the process of hiring and working with an offshore team.
What is offshore development?
Traditionally, a business with IT and software development needs would set up an IT department in their firm or source for a software developer within their city or country. Offshore development is a departure from this model. It entails hiring developers from a foreign country to manage your software development project/needs. The difference between outsourcing and hiring local developers is you will be working from different locations.
Pros of offshore software development
The growing popularity of offshore development is attributable to the benefits attached to it. Here are some of the top pros of offshore development.
1. It is relatively inexpensive.
For businesses, the money factor is always at the forefront. Offshore software development is cheaper compared to hiring local talent. The cost factor is perhaps one of the key attributes that have led to the increased popularity of outsourcing over the years. You also may be able to save on taxes if the country the developer is based in offers tax incentives.
2. Your company gets access to specialized skills.
Offshore developers have specialized skills and knowledge. It, therefore, becomes easy to hire and work with a developer who is acquainted with the skills you need for your project. You also get a chance to experiment with the latest technologies in the market that will help you stay ahead of the competition.
3. It's easy to scale up or down.
With the evolving nature of businesses, there might be a need for scaling up and hiring more IT skills or scaling down. With offshore teams, it is easier to scale your workforce, depending on your capacity needs.
Cons of offshore software development
While there are many benefits to outsourcing, there are drawbacks.
1. There may be communication challenges.
One of the main drawbacks of offshore development is communication difficulties resulting from different time zones, language and telecom infrastructure. If not handled carefully, poor communication can doom your software development project. It is, therefore, critical to have a clear communication strategy. Before the commencement of the project, define the medium and frequency of communication between you and the development team.
2. You might experience difficulties in coordinating the offshore team.
This is closely related to the communication challenge. Outsourcing often presents a challenge regarding coordinating the team, especially when the team fails to communicate effectively or meet deadlines. Further, you won’t be able to actively monitor the conduct of the project as you would when physically present. Every coordination of a remote team is solely anchored on the communication strategy you employ.
3. There is a high risk of fraud.
There is always a risk of falling for fraudulent developers, especially if you fail to conduct proper due diligence. Before you hire an offshore developer, do thorough due diligence to filter out fraudulent developers and only vet those that are reputable and trustworthy.
4. There are legal concerns.
Working with a developer in a different country may raise legal concerns, given the differences in laws, policies and regulations. Outsourcing exposes you to the risk of a data breach and your intellectual property being stolen. To mitigate this, you should hire a legal advisor to guide you through the contracting process for assured protection.
5. There may be a lack of customer focus.
Despite getting expert skills, one of the main limitations of software outsourcing is that vendors may not direct all their focus toward your project, especially given they are likely to be handling multiple assignments. Even when the focus is on your project, the geographical limitations can limit the developer's ability to engage with the users and customers to get their perspective.
This can be mitigated by making your goals and objectives clear to the developer. You should actively involve the end users in developing your concept before the commencement of the development process. Additionally, choosing a team with a proven track record comes with more assurance of success for your digital transformation journey.
Get it right with offshore software development
While outsourcing software development can be a challenge, especially for small businesses who are exploring the option for the first time, there are proven ways you can adopt to ensure a successful outsourcing experience. Here is how to go about outsourcing.
Know what you want.
Outsourcing should be an objective and well-informed decision. The first step toward establishing a successful outsourcing endeavor is defining your goals. Be clear about what you want to achieve and how the project links with your visions. Keep it simple for your offshore developers to understand.
With the goal in sight, list all of the key elements that would facilitate attaining the set goal. This includes defining the key skills you need in a developer to execute the task.
Analyze the resource implications of your project.
Knowing what you want, plan for the resources needed for the project, particularly the time and budget. Plan a reasonable budget that is within your financial abilities and the price range for a project of a similar scale as yours. Many businesses that are seeking cheap software development services often ending up in the trap of a fraudulent developer or with a product that does not meet the business's needs. Always keep in mind that you are looking for competitively priced services, not cheap services.
Conduct rigorous research.
Compile a list of the top prospective offshore software developers that you think are best suited to handle your project. From your list, you can narrow it down by talking with the companies about how they can help address your needs while meeting the budget and requirements. Some of the critical considerations when narrowing down include:
Competitive rates: Again, look for developers offering competitive rates. Cheap quotes always come with a compromise on quality, which will affect you in the long run.
Good reputation: Look for developers with a good reputation. You can judge a developer’s reputation from reviews and testimonials from previous clients. Other than these, examine their portfolio vigorously to decide whether the quality of their work matches the standards you hope to attain.
Suitability: Do they have the knowledge, skills and experience to handle your project? A strong portfolio is soundproof of capabilities.
It is also important to be aware of and conduct rigorous research on the hidden costs that come with outsourcing: exchange rates; communication tools, especially if a translator needs to be hired; remote testing; tax obligations; and contracting services. When drafting your budget, consider – and include – these additional costs. Sometimes they may drive up the development costs compared to what you might spend to hire local talent.
Get it right with the contract.
Once you have settled on a particular company or developer, enter into a contract. The contract should be elaborate and clear on the goals of the project; the deadlines; the payment criteria, including tax compliance, privacy, and protection of intellectual property; the dispute resolution strategy, enforcement options for breach of contract; and cause for termination.
If it is your first time outsourcing, it is best first to test the team's responsiveness, communication and level of efficiency in delivery with a short contract. Upon proving their competence, you can then enter into a longer and perhaps more comprehensive contractual engagement.
Managing an offshore development team is predicated on your ability to analyze every critical element of the project right, but most importantly, communicating effectively. It is therefore vital for businesses looking to outsource software development to set the groundwork by conducting rigorous research, budget planning, and figuring out modalities of communication before committing to an offshore vendor.