The IT industry has become incredibly saturated with tech companies mushrooming like never before. In fact, industry experts suggest that there will be over a million software companies in the world within the next 10 years. Unsurprisingly, however, almost 50% of these businesses are tightly-packed into Western Europe and American cities. Competition is always high, the cost of building a well-rounded development team is constantly climbing, and the talent pool is getting smaller by the day.
And thus, offshore software development services have risen as a solution for Western businesses who are looking to get ahead in the crowded and expensive marketplace.
First of all – what is offshore software development?
Offshore software development is when an organisation opens a new office a.k.a. a new development centre in another country, usually an emerging tech nation. Developers are hired, who become permanent employees of the business, just like the local team, except that they’re located elsewhere.
For instance, IT giants like Microsoft, Apple, and Google have established their R&D centres in India, in Bangalore, the Silicon Valley of Asia. The lower costs, access to talent, and the ability to scale quickly allows them to increase their software output and improve their technical expertise, without any disadvantages.
Can offshoring work for your business?
Typically, offshore software development is leveraged by service-based companies with the non-technical core business. These are businesses that are experts in their industry but are unable to keep up with the ever-changing technology.
Because their expertise in software is not really up to the mark, their technology is not cutting edge and requires a lot of developers to build and maintain over the long term. With local engineers costing an arm and a leg, offshoring is a solution where they can hire developers full time and at a fraction of the cost. The development teams they build can also be used to implement new ideas at a later stage.
In other cases, a company may already have a local development team but are unable to scale up. They want to increase the value of their business but are struggling to. Since new developers are expensive and hard to find, a dedicated remote team offshore might be an ideal solution.
What are the benefits of building offshore software teams?
Access to an engineering talent pool
The main reason why hiring engineers in Western countries is so expensive is that their skills are incredibly in demand. There aren’t enough talented developers to fill the growing job openings.
Even though colleges in the West are pushing IT courses, there’s still going to be a delay before those graduates are experts in the industry. And that’s exactly why today, the emphasis is no longer about cost, it’s about availability. And hence, companies are looking to build offshore teams in countries like India.
India produces 1.5 million engineering graduates every year. Thanks to the high level of training and extensive English language training, these engineers roll out of university ready to work.
Say you establish a development team in Bangalore, along with your in-house team at home in Paris. When you compare the salaries, the salary of the average developer in Bangalore is comfortably 3-4 times cheaper than in Paris. That means that the total cost of doing business in Bangalore, including premises, administrative staff, legal work, payroll, developer salaries, etc., typically comes in at 50% the cost of your at-home developers’ salaries.
The ability to focus on your core business
If you partner with an offshore company that specialises in building offshore teams, all tasks such as administration, insurance, payroll, recruitment, etc., are all taken care of by them. This gives you enough time to focus on your core business, close successful deals, and grow your business.
Does building offshore teams mean partnering with a software development company?
Simply put, these are two fundamentally different approaches to scaling your team. Outsourcing means to engage with third-party vendors on temporary contracts to deliver your software. These vendors typically hire developers on an ad-hoc basis for one-off projects.
But these developers do not work only for your business: they cater to many different clients and work simultaneously on many different projects. And because the main driver here is always the cost, companies tend to push hard for the lowest price that they can get. The result is usually way below your expectations since the developers have no investment in your business, and hence, no real incentive to perform well.
How can you manage offshore teams?
- Share your greater goals for the company with your offshore team
The first step, before you start working with your offshore team, is to explain the more significant goals of your business to them. This is an opportunity to formally introduce the objectives and needs of your business and define where you see your company in the next few years.
Many times, companies treat their offshore counterparts only as an execution partner who builds software for them. However, establishing a connection with your offshore team is crucial. The more they know about your organisation, what software products and solutions you want to build, and why, the more invested they’re going to become in your company.
- Bridge the culture gap
When working with a local team and an offshore team in another country, you’re bound to experience cultural differences. To avoid the cultural differences that come with working with teams across the globe, fostering a unified sense of belonging across your teams is crucial.5
Remind your teams that they are all working towards common goals and missions and if the project is a success, then it reflects on their efforts. It is your responsibility to make your offshore team feel appreciated and recognized – to make every single person who is contributing to your project feel included, and as a part of your greater vision.
Visit your remote team at least once or twice a year and conduct conference calls where both your teams can engage in friendly conversations!
- Communicate effectively
Effective communication is key, especially when collaborating with a team that is not physically present in your office. It is critical to foster an environment in which effective communication becomes the most important goal, without which your development project can derail. Some communication channels that you can use include:
E-mails: you can share official communication, schedules, and project meeting notes via emails.
Instant messaging: Instant messaging tools such as Slack, Whatsapp Web, and Skype can be used for quick clarifications, status updates, and queries.
Productivity tools: Project management tools like JIRA, Asana, and Basecamp help you keep a track of the tasks of your offshore team.
At the end of the day, the challenge is not about working with a remote team but about having the patience and persistence to sustain a skilled team over the long-term