Offshore Software Development: A Complete Guide with Tips & Best Practices

how to Get Your Company Ready for Offshore Software Development

We already discussed where and how to find an outsourcing software development company that will be ready to help you, but is your organization ready for this type of cooperation? Let’s discuss what you can do for the smoothest workflow. 

Define Offshoring Scope

The first thing you need to decide is what you need to outsource and to what extent. It is important to analyze your organization to know its strengths, weaknesses, and needs. Sometimes, you might not need an outsourcing company or offshore software outsourcing partner at all, and hiring just a few experts via a staff augmentation arrangement will be just enough. 

As a business owner, you must have a clear understanding of whether adding particular experts to separate departments within your organization will be sufficient or whether delegating a considerable portion of your business responsibilities to an offshore development company is essential for the future growth of your organization.

So, the real question is, “How much responsibility are you willing to delegate to another offshore or outsourcing software development company?” 

While creating a software product, you have to cover:

• Software development
• Testing
• Design
• Business analysis
• Marketing needs

So, you need to decide how far you are willing to go with trusting another company in some or all of these areas.

Olexandr Boyko

Delivery Director at SPD Technology

“From our experience, one of the most common and effective approaches is when companies outsource the entire software development process offshore, including product management and marketing. This approach allows you to control the product development process more efficiently than product ownership delegation. However, on the development side, you may need business analysts and project managers to ensure that everything goes according to plan and your project vision.

We also had projects in which our teams created the entire product, while the client handled marketing activities and overall direction in line with their high-level vision. This approach is also a viable option if you find a trusted and experienced software offshore provider.”

Appoint a Product Owner

It is necessary to have a product owner for any scenario of cooperation with an outsourcing company. Even with the best team of seasoned offshore developers who can quickly begin and deliver results, it will still be wise to control the direction of your product development. Some companies, especially startups, focus so much on development speed that they lose direction. You need someone to ensure your top-notch product is created to solve real-world problems and delivered in accordance with your initial vision.

It is obvious that one of the biggest challenges with any team of outside experts is that they struggle to understand your company’s real problems and thereby offer viable solutions. It is also clear that outsiders will not have the same understanding of your internal processes as your employees. The nuances of your business context are the most difficult to capture accurately in documentation because such knowledge is often unstructured. However, with the right partner and a properly set-up communication process, this challenge is completely solvable. In fact, when you outsource all product ownership, you have to find a way to share your business vision so the product is developed the way you want it.

You could share the context and provide your offshore development team with a deeper understanding of your organization. Great product ownership and communication are a major part of delivering this understanding to its fullest. A product owner on your side can bridge the gap between the external and internal teams by being fully aware of both the business and development aspects.

The responsibilities of a product owner include, but are not limited to:

• Defining and prioritizing the product backlog
• Understanding stakeholders’ needs
• Setting product vision and strategy
• Release planning
• User story creation
• Acceptance and validation of user stories
• Measurement of product success
• Budget management

Ensure Remote Cooperation Readiness

Your company must be able to welcome an expanded team of experts and provide them with all necessary resources and communication tools without disrupting your processes. It must be digitized to the fullest extent to enable effective online communication and collaboration.

If you still have any key processes that rely on in-person meetings, physical signatures, or any other processes that cannot be digitized, your company is not ready for a software outsourcing arrangement. You need to take care of your internal processes before adding any external teams.

Companies that succeed with offshore software development typically standardize communication through platforms like Jira, Slack, and Zoom to avoid fragmented updates and unclear responsibilities.

In addition to providing your teams with all the necessary tools, your management must clear any communication roadblocks and secure your virtual board meetings. Eliminating all bottlenecks that prevent your company from effective offshoring cooperation is a benefit in itself, even if you don’t cooperate with a distributed software development partner as yet. Digital transformation will improve your processes, saving your employees’ working time and, in turn, saving you money.

Manage Access and Permissions

Your system must be able to provide different levels of permissions to different user groups.

When outsourcing or offshoring your software development, you will face situations where users need limited permissions to solve certain problems. Every system is unique. Some systems may already provide such permissions through other existing software solutions, while others may have a single administrator role designed to grant only the “all or nothing” kind of access.

It is recommended that you implement a multi-role user hierarchy with varying permissions to enable productive collaboration with your external teams. In fact, flexible access and permissions functionality is a must-have for large enterprises, while for smaller organizations, it can be an option worth considering.

Identify Dependencies

In addition to considering flexible access and varying permissions for your external teams, it is also important to identify internal dependencies within your organization that may block their operations.

An example of dependency is when two tasks, one for an in-house team and one for an outsourced team, require the same resources, and there aren’t enough resources to do both at the same time, making one task dependent on the other.

Once you identify all dependencies, you can rule out the possibility that your departments’ activities will block your external team.

Prepare Security Measures

If you have never used external help before, some parts of your infrastructure, security-wise, may be best handled by your in-house team. Therefore, your security model must be reconsidered and adjusted to support outsourcing cooperation to keep your project safe. 

In offshore IT outsourcing, data security must be treated as a top priority. Strict access protocols, encrypted communication channels, and controlled environments reduce the risk of unauthorized access to source code and sensitive business data. The most common practices for remote teams are:

• To always use a VPN.
• To work only with software that is recommended and pre-installed by your security department.

Get Your Team Ready

Although the practice of using offshore software development services is quite common, some concerns regarding job security may still arise among your in-house team members. So, when you have an in-house team but need to scale your project development by setting up a dedicated team or an ODC offshore, keep in mind that you also need to provide your internal team members with the context for hiring remote experts.

Addressing the interaction between in-house and remote teams is equally important. While your in-house team members may be protective of some technologies and approaches they are used to, your responsibility is to facilitate communication and provide the correct perspective. Ensuring both in-house and offshore teams feel valued fosters a collaborative environment, enhancing results and minimizing potential conflicts.