Managing Offshore Development Teams, How To Get It Right.
The effects of COVID-19 and Pandemic 2020 taught businesses a crucial lesson about the feasibility of having workforces in several, distributed locations. Therefore, companies are increasingly seeking development help outside of their boundaries to save money and time.
According to ReportLinker, in 2021, the market for outsourcing in IT was worth $526 billion, and by 2027, it is anticipated to reach $680 billion. The trend of tech offshoring is clearly gaining traction. Business owners and individuals alike will benefit from getting into this trend.
Although the statistics may seem lucrative, the management of offshore development teams is challenging. While many businesses succeed, many others fail. There is no structured approach. The goal here is to identify the right modality for the business and act appropriately.
No worries. In this blog, we will be covering the benefits and challenges of offshoring and the right approaches to managing an offshore development team effectively. Without further ado, let’s dive in.
What is an Off-shore team?
The offshore development team means an extended, dedicated, and integrated team that is usually located in a foreign or offshore country and gives support to an organization as required.
Usually, offshoring is carried out in countries where labor costs are significantly cheaper than those in the countries where services are obtained. Thus, the majority of businesses find this service advantageous and profitable for them. There are many outsourcing destinations in Eastern Europe and Asia that attract companies for economic reasons.
Companies like IBM, Microsoft, Amazon, and many more offshore their operations to other countries. Every day, more and more organizations set up overseas departments. The core reasons are a shortage of skills, cost-effectiveness, and, more importantly, a clear growth of the company's productivity and profit.
Are you confused about distributed teams vs remote teams? Check out our other blog on Distributed Teams vs Remote Teams: The Difference and Their Modalities
Benefits of an Off-shore Team
Hiring an offshore tech team saves a significant amount of money. It consists of utilities, equipment, infrastructure, and salaries. There is no specific amount one can save, but as claimed by the Economist, companies can save up to 30% of overall costs by hiring an offshore team.
Pool of Great Talent
With offshore tech teams, companies can select the best talents around the world. Recruiting from local talent pools can sometimes result in unsatisfactory work. There may be someone in other parts of the world who specializes in the area your business lacks. Going offshore will allow you to get the best talent and solve problems more efficiently.
No Cap, New Projects
On-shore or in-house tech companies have limitations in terms of staff and equipment. Because of this, they cannot take on big projects beyond their limits. Offshore teams, on the other hand, allow companies to break boundaries and go big. They can work on new and complex projects too. Large projects are easy to complete with a dedicated remote team.
Having an offshore team gives the company the flexibility to switch back and forth between full-time employees. Engaging them in different projects or tasks.
Control From Miles Away
Offshoring doesn't necessarily mean losing control or compromising quality. Despite the lack of physical contact, the company is still able to control the offshore team just as it does with the in-house team. Even reaching goals and objectives becomes easier by connecting teams and having them on the same page with efficient SaaS platforms.
Tips To Work With Offshore Teams
There are not one but multiple approaches to running a successful offshore development team. Once you've found the right modality for your business, you can experiment as much as you want. Nonetheless, there are some top tips that you should consider before setting up an offshore team.
- Hiring The Right People: An offshore team can only fulfill your business needs if you hire the right candidate. A team of experts who care about your vision, your product, and your project. Considering the company's needs and the skills it lacks, hire the best candidate for the job.
- Set Specific Goals: Once a company chooses the right team, setting priorities and goals comes next. It is very crucial to highlight the goal and be explicit about the possibilities. Moreover, ensure the team is aligned with the objective.
- Over-Communicate: When you are going to work with a remote team, candidates often find themselves in a dark place and feel detached. On an in-house team, everyone can easily connect. Hence, overcommunication is the key factor for offshoring. Bring your team members into the same loop and engage with them in 1-on-1 meetings. Make them comfortable and be there for them all the time.
- Improve Work Conditions: Hiring and onboarding a talent requires a significant amount of time, energy, money, and resources. In particular, in the tech industry, this process is quite lengthy. Also, it is very hard to retain competent employees. Thus, improving the working conditions is a must. Including training programs, professional development, and compensation can make the employees more motivated.
- Train Your Employees: Before offshoring, make sure you have expert project managers or employees who can maintain a remote team efficiently. That's why providing them with great training programs to learn the new technology and get better at it is necessary. Even the talented ones need training and support.
- Agile Team Meeting: Teams that work in different time zones should hold a daily standup or a quick 15-minute agile meeting. In the meeting, the team should address the daily goal, share core plans, address problems, and set targets and agendas. Making agile meetings a regular habit will sync the team and boost productivity.
Challenges Of An Off-Shore Team
If you are a business owner looking to build an offshore team, then we suggest first defining your offshore team management strategy. Offshoring has a lot to offer, like cost-effectiveness, high-quality tech service, efficiency, resourcefulness, and more. But without a proper management strategy, you’ll find it difficult to operate. Your business will be at a loss instead of a profit.
Let's take a look at some of the common challenges associated with offshoring if you have not prepared for it.
The first challenge that an overseas team faces is cultural differences. People from different countries have cultural distinctions. Some cultures, for example, encourage respect and courtesy while offering criticism, but others encourage an upfront and assertive approach. This cultural disparity creates conflict and breaks down teamwork.
Lack Of Trust, Transparency, And Control
Trust and openness are the foundations of offshore. When companies collaborate with a remote team, they worry about the project outline, deliverables, deadlines, and confidential information security. This is why achieving a clear picture of quality, communication, and control is a reasonable challenge.
Most off-shore teams fail due to poor communication. Time zone differences often cause confusion and incorrect assumptions for geographically dispersed teams. This leads to mistakes and delays in project delivery, and sometimes impacts the project budget. Many companies lack proper communication channels, protocols, or time sheets to keep everyone on the same page.
Hiring offshore developers can also raise legal contract issues. It is common for businesses to experience difficulties with jurisdiction, record keeping, security standards, data confidentiality, and insolvency provisions. As the company discloses confidential information and pays a substantial sum, legal outsourcing contracts are necessary. But the challenge is too difficult for many companies to overcome.
Most of the time offshore teams fail due to bad project management. One of the main causes is that there is a lack of communication, a delay in resolving problems, and unclear goals and objectives for the project.
Sometimes there is no proper planning, and inexperienced project managers fail to advance the team since they don't comprehend the complexities of working abroad.
How Ban Base Can Help You Manage An Offshore Development Team
For offshore team building and coordination, Ban Base can offer you best practices if you want to experience it firsthand. Over the years, by trial and error, we acquired the pieces of a successful offshoring strategy. so that you can skip the guesswork and get the full potential of an offshore tech development team.
Pre-vetted Talent Pool: In order to remove the hiring barrier, we have vetted highly talented Bangladeshi developers. All these candidates take extensive virtual comprehensive tests and are ranked according to their scores (not tested, silver, gold, platinum). They are efficient at English speaking and are experts in coding and problem-solving.
So that, you can hire the right fit for your company. We have over 1000+ expert candidates waiting for your project.
Highly Equipped Office Facilities: We have introduced an OSTDO (offshore tech development office) model where developers have the option to work together under one roof. Getting access to all work facilities and equipment, as well as face-to-face time with peers when required.
Local Contracting: As you have already read about the challenge of legal contracting problems with overseas teams. Ban Base handles your payroll, legal, admin, contracting, and HR for your offshore teams. You pay locally, sign a local contract, and that’s it. No extra hassle for you.
Project Management: Offshoring success is determined by the efficiency of your project management. Thus, we provide qualified, experienced project managers who will supervise your offshore teams and be accountable for your project's success. They will guarantee that your project's budget, deliverables, and deadline are met on time through effective communication and problem-solving.
Communications and Cultural Fit: All our developers have good English communication skills and are trained and tested on interpersonal skills to adapt to European culture. Also, we use effective SaaS platforms and agile management principles to ensure smooth communication. So, you never find your team unaligned.
Cost: Most companies are price-biased about offshoring that it is costly. Here, we break the stigma. We provide a quality developer team at an unbeatable market price. Offshoring doesn’t need to be expensive. Hire expert developers at reasonable prices with Ban Base.
Flexible Contracting Options: Hire for a short term or for a long term. Add one or more resources to your internal team or set up your entire team from scratch. You can customize your contract according to your project needs. If you need any special support, you can directly contact us. We'll help you resolve any problems that arise.
Offshoring is a blessing in this modern post-pandemic era. It gives the company flexibility to achieve a high level of effectiveness and profit.
You should, however, first consider the challenges and how to solve them since the process requires extensive monitoring, project workflow, and communication.
Fret not, if you find overcoming these challenges quite difficult and need support, hit us up. With us, you choose the team and project, and the rest we take care of. So that you can fully focus on fulfilling your objectives and goals.