Essential Steps to Choose the Right Offshore Software Development Team

What’s in common between Dell and Elastic? You can hardly come up with an answer unless you know that they both rely on remote teams.

Dell announced about their decision to create Connected Workplace, a remote work program, and give 50% of the workload to remote teams by 2020. Elastic, a company building software that allows using data in real time and at scale, is running a completely distributed team that extends across 37 countries.

Collaboration with offshore software development companies is also getting the new normal. By integrating outsourcing into every day workflow, businesses benefit from cutting costs, proficient manpower in place, shifting focus onto mission-critical tasks, and the new ways of generating profit.

Alibaba, Basecamp, WhatsApp are among the many who took advantage of the offshore software development outsourcing. In his book, the Alibaba founder Jack Ma told how he achieved success and why outsourcing to the remote development team played a big part in that.

Here’s the statistical evidence that software development outsourcing keeps increasing its market share. In 2018, Gartner released their annual report saying that the global IT spending would total $3.8 trillion in 2019, showing a 3,2% rise compared to 2018.

 

Global IT spending forecast figures

 

As the stats show, IT services are still the major spending in 2019 including offshore software development outsourcing. This is how Gartner commented on the trend in their press release:

“An expected global slowdown in economic prosperity, paired with internal pressures to cut spending, is driving organizations to optimize enterprise external spend for business services such as consulting. In a recent Gartner study, 46 percent of organizations indicated that IT services and supplier consolidation was in their top three most-effective cost-optimization approaches.”

source: https://www.gartner.com

 

Even though teaming up with a dedicated development team is a reliable strategy for numerous businesses, it is still considered to be a risky endeavor by others. 

Thus, German-based companies tend to search for the software development teams inside their homeland rather than give their projects away to outsourcing companies. But as long as the DACH region experiences a shortage of skillful developers, outsourcing turns to be the best solution so far. 

This article is to help you find the right people to work remotely and build a smooth collaboration process with them. So, let’s roll.

 

The Offshore Software Development Company to Rely On

 

Selecting an offshore software development company reminds of an employee hiring process. You search for the candidate’s social profiles, ask for a portfolio, appoint a personal meeting to take a closer look at his personality and test hard skills. 

But picking up reliable dedicated developers is a greater undertaking. You should be picky and accurate, since your company further progress may largely depend on the manpower you are going to hire. 

Here are the points for you to consider when choosing a dedicated development team:

A Comprehensive Request for Proposal (RFP)

A thoroughly planned RFP helps to be on the same page from the early stages of communication. It sets out project details, goals to be achieved, a range of services and deliverables, technical requirements, timeline, and main selection criteria for the software development partner. 

While developing product requirements, you should clearly describe both categories – functional (what a software system should do) and non-functional (how a software system should do it right). 

Before writing the RFP document, you should know what you need and how it relates to your business strategy. Here’s how the whole process of pre- and post-RFP planning usually looks like:

 

Standard stages for the RFP development

source: https://www.smartsheet.com

 

Once the RFP document is ready, it’s vital to determine who will be responsible for reviewing the submissions of the software development vendors, selecting them, and monitoring the entire product implementation process.

Basic Criteria in Selecting Dedicated Developers

Having a comprehensive RFP in place simplifies the selection of the dedicated developers a great deal. Basically, the criteria that guide your choice may embrace:

  • Communication
  • Company size and experience
  • Pricing policy and rates flexibility
  • References from other businesses
  • Technical expertise and agility
  • Culture fit and English proficiency
  • Geographical proximity and ability to easily get to the vendor’s location
  • Knowledge-sharing practices
  • Employer brand and an employee retention rate

Interestingly, the selection factors in 2017 referred mostly to technical and financial reliability of the IT service provider. You may also want to include them into your list, so here’s the chart developed by Statista:

Basic selection factors in selecting IT service vendor

 source: https://www.statista.com

 

Asking for References and Recommendations

For a great many software development providers receiving positive feedback means everything, since the word of mouth gets new clients on board. 

Prior to scheduling an individual meeting, it always makes sense to check their website, industries covered, customers, and testimonials. The web section featuring use cases or success stories also requires attention, as it explains how a particular product was developed and what obstacles a dedicated development team had to overcome. 

Some extra information on a company’s key competencies can be provided by the international review rating like Clutch.

Checking an IT Services Vendor Portfolio

Examine the experience of the vendor and dedicated developers. It is extremely crucial to hire a mature team that can create a comprehensive knowledge base, accurately check and report errors, produce a maintainable code, implement secure development, write consistent software requirements specification, and keep their hard skills sharp. 

An efficient vendor should be able to understand your business needs, align them with technical capacities, suggest a communication plan, build a clear roadmap, etc. Most importantly, your tech partner should know well your business niche and offer solutions that can fit in your brand, customers, and goals. 

Discovery Phase and Technical Solutions Offered

Many times, development of the custom software from scratch may be the best option for your business. A legacy code base puts extra obstacles in the path, taking more time, effort and budget to fix bugs and rewrite code. 

Alternatively, an offshore software development company can suggest utilizing an out-of-the-box solution by adjusting it to your business needs. To make this happen, mature dedicated development teams insist on running a discovery phase. It gives enough time to both a customer and an IT service provider to understand what is actually required and how to put it into life.

Effective Budget Model in Place

There’s no universally approved price model. Pricing depends on a wide range of factors like a project scope, its overall complexity, integrations, migrations, and the current state of where things are. It impacts on the development stages and the choice of the dedicated developers to be involved into the project. 

Put differently, you should understand what your budget limits are and search for the provider that can guarantee staying within the set budget (provided that all the initially discussed conditions remain unchanged).

There’s a common myth that fixed price projects can be a good way out. However, it’s not an ultimate solution. Static budget may give you more control over the project, but it may significantly restrict the whole development process. Your project requirements as well as business goals may change over time, while it may take time for a dedicated software development team to craft the solution that would better correspond to your upgraded business roadmap. 

That being said, flexible budgets and project scopes often turn to be the best fit. 

Developing a Clear Communication Plan 

Many times, outsourced projects fail because of the inconsistency in communication. IT service provider often retains software developers by offering flexible working hours and a remote work opportunity. While keeping software developers in comfort, these tactics may lead to the discrepancy in interaction between team members. 

 

Why outsourced projects tend to fail

source: https://smallbizclub.com

 

What’s the best solution? Develop a communication plan. For the sake of smooth cooperation, it should cover these points:

  • scope of work to be implemented (clearly described in the SLA agreement), performance KPIs, methods of progress monitoring
  • clearly prescribed roles and responsibilities including decision-makers
  • team interaction stages and syncups frequency 
  • a list of tools/software to ensure progress tracking and transparency in communication
  • how sensitive information should be communicated across the team
  • successes and failures registry 

Here’s a communication plan template you may want to use:

 

Communication plan with an IT service provider

 

Risks Mitigation in Dedicated Developers Management

Given that team mates may change over time, secure data transfer presents one of the biggest challenges.

 

Key obstacles in outsourced projects management

source: https://hackernoon.com

 

To ensure high data security, determine the data to be accessed by the dedicated team, where it will be stored (within the facilities of your IT services provider, internally, or both), how the access to the data will be granted and how it will be exchanged across the team.

In such a way, you’ll be able to develop a data loss prevention plan. To make sure your potential software development partner complies with the data security standards, suggest conducting a risk assessment procedure and regular due diligence check-ups. The security policies should also be clearly described in a Service Level Agreement with all the risks assigned to either of the parties.

Find out how we at astarios maintain a secure service provision all the way through the software development process!

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