How to Work With an Offshore Team Effectively

Since the late 1980's outsourcing has been a hot trend in the industry. Companies all over the world rely on this approach to manage different areas of their businesses. With today's technologies and approaches, outsourced agencies become full fledged in-house teams, taking part in the most complex projects and activities of the clients' companies.

Here are some of the most notable statistics for the outsourcing market:

• IT jobs are the most commonly outsourced ones among the SMEs.
• By 2024 the IT outsourcing market is predicted to grow by $98 billion globally.
• About 300,000 jobs get outsourced out of the US only each year.
• More than 37% of small businesses outsource in order to improve efficiency.
• 71% of financial companies offshore some of their services.

Outsourcing comes with many benefits and some challenges at the same time. By knowing what to look for, while delegating your project to a dedicated offshore team, it is possible to mitigate risks and come out with a great product. So, in this post we'll shed some light on effective tactics and strategies of working with offshore teams.

Companies are on the constant lookout for the ways to improve their strategy, reduce costs and come up with better and more efficient solutions. In this regard, outsourcing is a great and proven way to do that, as well as develop high-quality products. Here are the top five benefits that this approach offers.

For new companies or projects with limited budgets price can become a deciding factor in determining whether or not to outsource product development. Even small in-house teams can sometimes cost business owners thousands of dollars to maintain. Recruitment costs, hardware, office rent, software licenses, salaries and taxes — these expenses can easily take up a large share in the project budget, and even burn a hole in it, if not managed properly.

By outsourcing project development to offshore agencies, companies reduce business expenses and, thus, free up resources that can be invested into the product itself. Offshore outsourcing is also a much more viable strategy compared to onshore development.

The price of software development in the US, for example, goes up to $300 per hour (for Enterprise-level products) when dealing with a domestic company, meanwhile offshore development companies from Europe offer rates that are three and even four times lower.

For new companies or projects with limited budgets price can become a deciding factor in determining whether or not to outsource product development. Even small in-house teams can sometimes cost business owners thousands of dollars to maintain. Recruitment costs, hardware, office rent, software licenses, salaries and taxes — these expenses can easily take up a large share in the project budget, and even burn a hole in it, if not managed properly.

By outsourcing project development to offshore agencies, companies reduce business expenses and, thus, free up resources that can be invested into the product itself. Offshore outsourcing is also a much more viable strategy compared to onshore development.

The price of software development in the US, for example, goes up to $300 per hour (for Enterprise-level products) when dealing with a domestic company, meanwhile offshore development companies from Europe offer rates that are three and even four times lower.

When companies outsource their projects they can concentrate on those business processes that usually fall off of their focus. With the help of offshore developers such activities as marketing strategy, branding, demand planning can be executed during project development and not rushed through once the project is done.

Offshore agencies are also much less prone to understaffing, which means you don't have to worry of employees getting sick, being late to the job or aren't showing at all. With an outsourcing company the work on the project can continue around the clock.

The saying 'shoemaker's kids have no shoes' perfectly describes the state in which lots of businesses live on a daily basis. Companies can deliver great products or services to their clients but may not have time to deal with the internal projects. As a result, great ideas end up sitting on the farthest shelves, gathering the dust.

Outsourcing projects in full or partially expands business' capacity, allowing managers to allocate internal human resources to other projects that are normally overlooked. Another advantage of outsourcing is that a company becomes immune to market fluctuations or sudden shocks.

Doesn't matter if it's an unexpected bug in the product, change in customer demand or a new competitor on board — the company will always have free in-house resources to come up with a solution to the problem.

In-house teams are limited by their local markets. This means that businesses often need to compromise when it comes to human resources or recruitment activities. For one, it's still hard to recruit skilled tech talent locally. Even with the global pandemic rolling on, the War for Talent is not going to cool down anytime soon. Top-tier tech specialists still get bombarded by dozens of emails and phone calls from recruiters.

On the other hand, if your project requires a combination of uncommon technologies or programming languages, the only way to find a professional with relevant tech expertise would be going offshore. And this is where outsourcing can come in handy.

Product development is rarely a straight line or a map where all directions are known. It is a process that often means developing a new approach, or changing the existing plan. If that happens it is important to ensure that the team can also be scaled up or reduced in order to meet new requirements.

In case, if you are doing a project with an in-house team it would be extremely hard to do any adjustments. Once the work scope changes you will end up maintaining an extra workforce that is not involved in the project anymore. Of course, you can dismiss full-time employees, but it can make things even worse, as recruitment of an in-house team for a new project will be even tougher.

With outsourcing, you are free to choose how much resources you need at every stage of project development, and once the project is complete you are not required to retain extra workforce. You can just end up working with an offshore development team, or request a small team, just to support your project.

Does outsourcing come without any cons? Of course, not. No strategy is perfect, and here are the most common challenges of offshore software development that clients come across while handing their projects to third-party vendors.

Now that we got familiar with the main benefits and challenges of outsourcing strategy, let's figure out what are the steps that a company should take to carry out the software development process in the smoothest way possible.

So, that's pretty much it. As you see, even with some risks that outsourcing may bring to the table, with the proper execution and remote dedicated software team by your side, it is still worth the effort.

If you are looking for a dependable offshore team for a startup or enterprise-level product development, look no further than Fayrix. With the extensive expertise and dozens of successfully completed projects, we can develop your project following the best offshore agile software development practices during the development process. Call, send us a message or fill up a form and our customer support representative will get back to you!