There is an increasing trend of companies that provide offshore team management services to carry out tech jobs. On the surface, this may seem like just another thrill-seeking adventure but the real benefit lies in the cost savings. Counterintuitive as it may sound, a software developer in the USA earns an average annual salary of $157,590, whereas the same individual would earn $43,284 in Ukraine.
Software services have been consuming almost every business and we have been receiving questions on how to create software and how to start a software company without running bankrupt.
The benefit of the offshore approach includes more options for companies to pick from around the world and these teams can be very inexpensive to hire out, but It will be difficult for your teams to collaborate, set up meetings, or communicate.
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What is Offshore Software Development and why Companies Ought to Outsource their IT Services?
Offshore software development is the process of outsourcing development tasks like web development, app development etc to a third-party software company with developer(s) located in their office.
Cost Saving
The first and obvious benefit of outsourcing is the cost benefit that comes with the process. As earlier indicated, salaries in most western countries marginally differ with the rest of the world. This means that a software development company operating in the US can accomplish the same amount of work and pay a fraction of the amount they would have initially paid.
Enhances Efficiency
Countries like Ukraine produce some of the best tech graduates in the world. By outsourcing from such a country, you expect to attract a workforce with years of experience to deliver even the most complex projects. This improves the efficiency of a company with the ripple effects spreading across all the departments.
Allow Companies to Focus on Core Areas
Another benefit of staff augmentation is that it offloads some burden allowing the business to focus on R&D, brand growth, etc while someone else does the legwork for them.
Saves IT Infrastructural Costs
Outsourcing your IT services eliminates the costs that would have otherwise gone to into IT staffing and procurement of IT infrastructure. Instead, the vendor is in charge of business processes hence required to invest in the same.
Faster T-A-T
IT out staffing also helps you actualize your ideas given that most vendors also allow you to hire dedicated developers to solely focus on your project.
How to Successfully Evaluate an Offshore Solution?
Define Clear Objectives
Defining a clear objective with measurable goals is the beginning of a successful offshore strategy. Your objectives clearly lay out why you need an offshore program, the model to use, the projects to outsource, your business values, and give practical working parameters within which the vendor operates. Most importantly, the objectives serve as a measuring yardstick on how successful or unsuccessful the strategy you use is. The measurable goals are functional metrics which you can assess the progress, indicate when you can take corrective action, and predict the future performance.
Choose Complementary Outsourcing Company
The second and most important thing is to choose a company that complements your business model. It’s not uncommon to find vendors bringing a predefined model to rush the preliminary stages. This is because they are in business and would love to see the dotted lines signed ASAP. Resist the urge to sign the contract before the vendor is fully immersed in the high-level objectives you present as it will be the focal point within which you conduct an evaluation.
Objectively Measure Progress
Once you have the right match, ensure you measure progress progressively. While at it, always keep in mind that your project requirements originate from the potential users. List all the requirements and add yours too. Additionally, insist that the off-shore team ensure you have constant access to the software.
Be Proactive By Taking Corrective Actions Early
“I wish I knew” is a word that doesn’t exist in the outsourcing world dictionary. You don’t want to discover a problem after all the deliverables have been handed over to you. Ensure that the outsourcer documents and hands over traceability the design specifics and compare them against your objectives.
Last but not least, ensure that the outsourcer furnishes you with test and implementation evidence. To ensure nothing seeps through the crack, seek third party reviews on all these aspects. The least you want is to start reviewing documents and taking corrective actions once the project is completed as its time consuming and costly.
Common Pitfalls when Outsourcing
Intellectual Property and IP Theft
Just like any other employment method, outsourcing also faces certain risk levels worth looking at. One of the potential risks that outsourcers face is intellectual property theft.
The possibility of your code being developed offshore being sold to your competitors clearly exists.
Before outsourcing, always do your homework and establish how intellectual property cases are handled. Often, many countries have inadequate Laws governing such transgressions. Needless to say, your local legislation may not yield results outside your country.
Hedging Against Security and Geopolitical Risks when Outsourcing
Before proceeding further, it doesn’t mean that all the outsourcing companies are bad. There are legitimate and professional businesses out there who take their clients seriously. When we talk about hedging, it depends on the level of trust you have developed. So don’t start harassing your vendor once you come across this yet you have a long work relationship.
Sign Confidentiality Agreements.
This is one of the most overlooked but equally important things most companies ignore when outsourcing. Before the vendor starts working on your project, ensure they sign a NDA. Additionally, hire a good lawyer to develop a comprehensive written agreement stating all the scope and work specifics. In the agreement, include a clause stating who owns what. This is because a pirated code could throw your company a murky IP lawsuit!
Limit your Outsourcing to Specific Tasks
Once you discover the massive saving in terms of software development cost, you could be tempted to outsource everything. Always tread carefully and resist the urge of outsourcing your proprietary products. It’s safer to retain your core technologies close to home.
Alternatively, you can choose to instill a strict control over the software or proprietary documents by hosting the server at home and occasionally accessing the software. As an added bonus, have contingencies in place to detect theft and watermark your products to the extent you can trace their source in a snap.
You can choose to hire dedicated developers to handle your projects full-time. This way, you not only avoid unnecessary friction but create a working nurture synergy.
Last but certainly not the least, conduct thorough background checks on the companies you are dealing with. What’s their financial capability? How is their employee retention rate? And so on and so forth.
How to Deal with Displaced Workers
The daily pace of working and managing offshore software developers is inevitably complex. This is because you have to juggle between different time zones, tasks, and individuals. However, to prevent issues cropping up, here is how you can manage remote teams.
Establish Succinct Job Descriptions
Always ensure that everyone knows what they are supposed to be doing at what time both at the team and individual level. This way you will avoid overlapping workflow.
Establish Management Controls
To ensure you get what you are paying for, establish controls in terms of timelines, projects summary sheets, and Gantt-Charts. On top of helping your team stay organized, it also helps them understand the progress and what comes next.
Standardize Communication Tools
When you are working with a person residing a continent away, the least you can do is to have a standard communication channel, or else you are screwed! If you settle on Skype, then it better be. Additionally, communicate regularly to review the progress and discuss the future set of goals and objectives.
Lastly, make it a habit of following up every meeting with a written document.
Designate Team Leaders.
If your offshore team is clustered in a specific location, pick one of them to oversee the minute everyday operations. You can also try and inculcate your team values with the leader who then does the same to those under him.
Final Thoughts
Whether stateside or offshore, good workers engage and motivate the employers towards achieving the overall company vision. However, despite the risks, the cost benefits of outsourcing cannot be silenced. Just like onshore developers, the quality of work from offshore developers entirely depends on the individuals, their experience, and their willingness to push their imaginary borders.
If your company chooses to take the offshore route, you can increase the odds of success by staying clear of a risky situation by constantly monitoring the progress and quality of the work. With some of the safety mechanisms we have stated, your firm will surely benefit from offshore practices irrespective of the underlying risks.
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