Why Distributed Software Development Team Model?

The COVID-19 pandemic has become a game-changer for industries all over the world. All organizations are learning to work remotely, use the help of distributed software development teams, and make the best of the situation. As for the IT industry, 44% of Chief Intelligence Officers claim that they are now more likely to use outsourcing suppliers than they were just five years ago, according to Fortunly. There is no alternative other than to adapt your business fast to this remote-first reality. The real question is what model to choose for the best cooperation, and we will cover one of the most effective approaches.

Despite the economic downturn and massive firings in the IT sector, the future for web and mobile outsourcing and distributed software development teams is looking quite bright. According to Statista, the projected revenue in the IT Outsourcing sector will reach US$430.50 billion in 2023 worldwide, and $138.20 billion in Europe.

What is a distributed software development model?

This is a process of planning, designing, building, testing, and managing software with the help of two or more decentralized development teams located in entirely different physical locations. Communication platforms, web forums, source code databases, and internet-based collaboration tools allow this process to happen and deliver great results for organizations.

Illustration of how distributed software development process works

Each distributed development team must adhere to Agile development principles and continuous software development practices in order to create software efficiently and globally with other dispersed teams.

It is important to understand the difference between distributed teams and remote teams. Both are able to work from different locations. However, remote teams are working in hierarchical structures and need decisions to be made by the structure’s higher-ups. In a distributed software development environment, you share the decision-making with teams, allowing some decisions to be made locally.

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Key Benefits of Distributed Software Development Teams

Better performance

A study by MIT Sloan Management Review evaluated the performance of 80 distributed teams. The researchers found that distributed teams are able to perform better than local teams, successfully dealing with the challenges related to this collaboration model. So, when the management processes are set up effectively, you have an opportunity to improve the performance of your entire organization by using the distributed development model.


Your company will have a chance to reduce costs massively. We are talking about savings of up to $10,000 per employee for real estate, according to a study by PGi. With this approach, you can easily hire freelancers for some roles and scale up your operations despite budget limits. Additionally, you will be able to hire full-time employees offshore, using outstaffing for your key teams. You can hire experts in other countries at lower salaries but still keep the high quality of your product.

Read also: How to Hire the Dedicated Development Team

More coverage

When you have multiple distributed teams located in different regions, you can get more work done in a day. It’s not just limited to support functions; your distributed development teams can be available 24 hours a day, maintaining delivery of continuous software development services.

Risk resilience

In situations where development teams in a certain region are not able to function owing to various reasons such as the economic environment, experts leaving, problems in office buildings, or any other unforeseen circumstances, you will still have most of your organization working properly. To quote the title of a famous book by Nassim Nicholas Taleb, you will be able to make your business “Antifragile”.

Larger talent pool

Another benefit of going with distributed teams, and web & app development outsourcing in general, is the access to experts on the international market. You will not be limited by your available local talent and will be able to set up just the right team for the project.

Latest outsourcing statistics for 2021

Working with the best partners

Since you have limitless opportunities to collaborate with different experts on a global scale, this will lead to strong competition among available vendors and software developers. You will have more chances of hiring a motivated vendor that will provide you with high-quality, customer-oriented services.

Higher employee satisfaction

Your experts will be able to work flexible hours and have the choice of location. These factors lead to greater satisfaction with the working process, higher retention rates, and more productivity from each individual expert. Hence, the risk of burnout and overall stress for your teams will be significantly lower.

Challenges of Distributed Software Development Project Management


While software engineering teams haven’t been always known for their impeccable communication skills, working remotely certainly doesn’t help with this. On the surface, you may think lack of communication is a quite obvious challenge. However, over-communicating, like micromanaging, can be just as bad. It is important to strike a balance here. If you don’t, problems with communication may slow down the development process and impact negatively the quality of your product.

We, at SPD Technology, leverage a variety of modern tools and approaches to improve the performance of distributed teams. One of those tools is Metucat, a cloud-based Integrated Framework for developing, maintaining, and evolving data-centric applications. It drives and helps to control application development using visual metadata, where the architecture becomes an organic part of the system. Metucat can be configured to create applications that fit into any data platform used by your enterprise or a startup.

Metucat can be used by system architects, software developers, and business analysts. It allows distributed teams to work on different parts of a project in parallel. During the development of Poynt, one of our recent projects, Metucat improved the quality of a product and communication between team members, as well as saved up to 50% of the development time, that was spent on planning, analysis, and design.

Visibility and control

This is probably one of the most critical challenges in distributed development. From a project management standpoint, all the distributed teams must be aware of what each is doing at any moment and be constantly updated with current events. Being able to effectively provide this visibility and control over all key actions is a big challenge for managers, but this should be implemented in order to make distributed global teams truly efficient.

Keep in mind that less visibility and control may be the price you have to pay to obtain independent distributed teams that are able to make decisions on their own and operate as adults.


New experts in your organization should understand your company culture as soon as possible. It is much easier to transmit the company’s values and communication approaches when employees are in the physical office, but with any kind of remote collaboration, it is hard. What might help with this issue are having accessible documentation and talking about the company’s values, discussing how experts in the company deal with certain situations, and periodically mentioning best practices during meetings.

Understanding the regions

As with any other type of outsourcing, you should have an understanding of what is going on in the locations your development teams are operating in. Having a basic knowledge of the country’s cultural characteristics, approach to businesses, tax regulations, legal policies, and economic and political situation is crucial to prevent any problems that might occur after you start the cooperation.

Higher demands for decision-making

So, since you are going with the distributed development approach, your organization is getting decentralized, and you need to delegate the decision-making to teams. Therefore the level of responsibility for experts is increasing. Your distributed teams must be able to make the key decisions on their own, but not all teams are capable of doing so.

How to Set Up an Agile Distributed Software Development Team: Best Practices

How Agile development process looks like

Hiring approach

Before building Agile distributed teams, you need to decide on which hiring approach you will take. The first option is to start hiring as an employer and set up a virtual office when required. When that is not enough, you can ask the outsourcing partners to help you with hiring challenges.

Based on our experience at SPD Technology, we also recommend you consider setting up a local office, an Offshore Development Center (ODC), in a foreign country. One of our partners had a goal of expanding into a new region and opened a local office with a couple of employees who would embark on hiring activities for the new distributed teams. The experts from the central office would visit the local office periodically. They watched the ODC successfully grow into a separate branch of the organization thanks to the local hiring process.

Cross-functional teams

It is impossible to recommend a distributed Agile team structure that would fit any possible situation. However, there is another important thing to consider. When you can, try to build cross-functional and not functional teams. An example of a functional team is when you gather Front-End developers who would only be capable of handling specific functions. A cross-functional team is a goal-oriented team that is assembled in order to deal with a specific part of the project, with experts that are able to cover different areas.

The composition of your cross-functional team may look like this:

  • Front-End and Back-End developers
  • Project Manager and Team Lead
  • Designers
  • Quality Assurance experts (Manual or Automation)

When setting up workflows between certain roles, always keep in mind achieving open communication among all employees in your organization.

The cross-functionality of teams not only allows them to be goal oriented but also allows them to take ownership and make more decisions independently, which are distinctive characteristics of the distributed development approach in the first place.

Project management

In any scenario, make sure you have skilled Project Managers, ideally one for each distributed Agile team, that would set up proper Scrum processes. Since visibility and control are among the biggest challenges, you need people that would lead your teams from a project or even product management perspective. The role of Scrum Master is usually taken by the Project Manager, Team Lead, Business Analyst, or any other team member.


Whatever the circumstances, always try to include your entire team in planning the activities of this particular team. According to a Scrum process, everyone should be able to share thoughts on features, deadlines, scope, plans, etc. Often it is quite hard, and the Project Manager takes over the planning. However, if you can ensure maximum involvement of your team members, it will be a smart move.

Your team members’ opinions will provide you with realistic time estimates on tasks and expert feedback on the direction of your project. What’s more, thanks to this openness, your employees will be informed and motivated, aware and ready for the next steps.

Planning or grooming sessions should be conducted according to the Scrum process at each of the sprints.

Human resource management

We have already mentioned that every team needs a Project Manager, but from a human resource perspective, you also need someone to handle people management. Let’s say you have a few dedicated development teams in Ukraine. Make sure that you also hire someone from this region to work with these experts.

If you have a functional HR department in your company, it will be good practice to set up its interaction with your distributed development teams, to give your employees additional attention.

Risk management

In order to reduce any risks, you need to prepare the infrastructure of your organization for remote work. All security-related aspects must be covered, including multiple levels of permissions, the latest security tools that are fully online ready, using VPN, and sometimes even providing employees with devices running on pre-installed software. Last but not least, don’t forget to always sign the NDA!

Cost management

Before hiring outsourced experts, start by analyzing rates and the economic environment in the region you are interested in. The next thing you should think about is whether your company is ready for remote collaboration. You can face major hidden expenses if your infrastructure is not ready to integrate a distributed team. When the level of salaries suits your company, and it’s ready to embrace offshore development, the final thing you should think about is rent for office spaces.

Project monitoring and control

To improve the visibility of your project, use the best office suites and bug trackers for your development process. Speaking of suites, cloud software combines dozens of applications for reporting and communication, such as Okta and Google Workspace.

If you want more visibility and control, you can add to your core office roles such as Chief Technical Officer, System Architect, and Director of Product Management. These experts would monitor and help distributed teams with all technology-related aspects of the development, and also oversee technological consistency in decisions.

Best practices for getting the best distributed development team

Outsource Your Distributed Development: Our Experience

We, at SPD Technology, have 15+ years of experience in distributed software development, collaborating with other teams across the globe. In fact, almost every major client of ours requires collaboration with existing teams, and we know how to do this effectively.

Whatever your software development needs may be, we are ready to leverage our experience from 80+ completed projects for businesses of all sizes and deliver a tailor-made solution that will ensure success in your particular case. We are actively monitoring the situation in the IT market and hiring new experts from all over the world to match the expectations of our clients.

Our experts delivered remote custom software development services, distributed systems integration, and unification solutions, eCommerce app development, mobile app development, web development services, as well as other services for innovative companies. If you need any help with managing and assembling distributed teams or if you have any questions on this topic, feel free to book a consultation!


How can companies overcome communication challenges in distributed software development?

It is possible to deal with most of the challenges by having a clear communication plan, using collaboration tools, having clear documentation, and following Agile methodology.

Are there specific project management tools, suited for distributed software development?

Yes, there are several specific project management tools, including Jira, Asana, Slack, Microsoft Teams, Confluence, Trello, and GitHub.

How do successful companies manage to maintain work-life balance in distributed teams?

There are several powerful strategies and approaches, including clear communication of expectations, flexible schedules, wellness programs, and regular feedback.

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