The demand for hiring a dedicated offshore team is rising continuously. By 2021, the IT outsourcing market is estimated to reach $413.7 billion, a drastic increase from the $66.52 recorded in 2019.
Globally, there is an unprecedented adoption of outsourcing for IT projects, including software development. Many companies, particularly SMEs, are massively pushing this, and many business leaders are already improving their knowledge on how to hire offshore development team.
This article will unveil all the secrets of successful hiring a development team overseas for your Start-up. Let us assist you to start offshore development with a great strategy!
Offshore Development Models
There are two main offshore software development models. They are Project-based outsourcing and Offshore development center (ODC). Understanding how to successfully outsource software development begins with identifying which model is perfect for your project.
- Project-based model: when a client hires overseas startup developer for a short-term, one-off project. The purpose is geared towards swift delivery and the payment rate is usually fixed.
- Offshore development center (ODC): Many companies that lack in-house software developers usually hire remote specialists to fill the skills gap. This is called offshore dedicated development team. The period can be short-term or long-term. While the agency supplies the developers, the client company hires a project manager or lead engineer/developer to oversee the process.
Difference between Project-Based Model & Offshore Development
Type of projects:
- Clear requirements and the roadmap.
- Lean start-up: Ideas for MVP (Minimum Viable Product).
- Full package for proposal, design, and development.
- Define specific demo milestones and final delivery.
- Free consultation for business analytics.
Offshore development center
Type of projects:
- Long-term and continuous project.
- There may be many changes in requirements.
- Dedicated dev team works full-time for your business
- Ready to support in different time zones.
- Cost is only 30% of your local cost.
- Trial 1-2 weeks free of charge.
Why does your Start-up need an offshore development team?
The points below are the reasons why many companies are turning to distant locations to find offshore development team for their software needs.
1. Cost reduction
When you outsource, you don’t have to pay for overhead costs like payroll, office rent, vacations, insurance benefits, recruitment fees, etc.
Instead, you can divert that entire fund towards the creation of an MVP. Not only that but also the rates of developers in the offshore countries are lower than that of the US and Western Europe due to the lower cost of living.
Hiring offshore dedicated development team from Asia can be twice or even three times cheaper.
2. Save time and increase productivity
Hiring an offshore development team can save costs, speed up the development process, and increase overall productivity.
Time is a crucial factor here as startups are born in a cut-throat competition setting. With a dedicated development team in place, you don’t have to invest time in project management routines or other HR activities like employee retention. All of it will be taken care of by the vendor company. You also save time on training new employees as every outsourced employee already possesses the required skills. This helps you to focus only on your work as everything else is already taken care of.
As for the different time zones, while you are sleeping or traveling, the team still supports your end-users.
It will be complicated with an in-house team to scale your team or change the technology stack conforming to the project stage and scope. However, such changes are widespread for startup environments, so flexibility is crucial here.
With offshoring, it is easy to add or remove developers from the team. You may not even need the whole team ready from the start of the project. Instead, you can bring in the professionals necessary at each stage of the process. Flexibility is an important factor in business success, and not less, software development.
4. Get access to a larger pool of talents
IT outsourcing gives you access to a larger pool of talents than you would find onsite. It isn’t easy to find developers of good quality in countries like the US and Western Europe. It’s because the tech giants have already employed the best lot of developers where they receive benefits, enormous packages, attractive perks, job security, and a sense of comfort.
Whereas working in a startup implies risks. However, offshore countries in Asia and Eastern Europe are full of skilled developers that would gladly join your startup.
Offshore development center checklist for start-ups
To hire offshore development team for your startup successfully, make sure you follow this checklist to identify the signs of a perfect offshore team for your startup.
1. Define your Needs and Goals
This is an obvious step, but many don’t take it as seriously as they should. What kind of application do you want to build? What type of developers would you need? What skills must they have? What infrastructure does the project require? What’s the expected time to market? What are the benchmarks for quality? How will you test the product? What’s your proposed budget? How are you planning for contingencies?
These and many more are questions that must be answered before setting out in search of developers. Your list of needs and goals must be as exhaustive as possible, comprising every conceivable aspect of the project. Also, you must set priorities. Every decision made at this point must give you a clearer picture of how you want the project/product to turn out. That informs how to hire offshore software developers.
2. Define your Budget to Hire offshore team
Of course, you can’t hire a developer if their payment rates do not match your budget. When negotiating the project’s cost, ensure that the offshore development company outlines the services and infrastructure covered by the total costs and those that are not. Companies outsource one major reason to take advantage of superior infrastructure in the agency that the client lack.
Therefore, the total price must include the cost of using the company’s infrastructure too. Beware that while you shouldn’t go for the cheapest agency, expensiveness does not equal quality too. The amount that an agency is requesting must match the services they provide and the value they deliver.
3. Define where to Hire Offshore Development Team
Asia and certain countries in Europe are the most popular destinations for offshore software development. Asia is more popular, and their developers charge less.
Some of the countries you may consider outsourcing include India, China, The Philippines, Vietnam, Mexico, etc.
Location is important because of cultural compatibility, which may affect communication. Many developers in the popular outsourcing locations don’t or barely speak English. This does not make them less qualified, but consider how the communication gap might affect the project.
4. Reach Out to Preferred overseas startup developer
Once you have determined what your project would be like, how to outsource it, and which location you want to outsource to, it is time to identify the remote vendors you think would fit your project. If it is an agency, visit their website to find a portfolio of past projects they have handled. For individual freelancers, request their resumes and personal portfolios too.
>> Factors you must consider include the following:
What skills do the developers possess? And what is their level of expertise? Though ‘software developer’ is often used as a generic term, there are different kinds of developers, including web developer, mobile app developer, frontend or backend developer, Full Stack developer, DevOps developer, etc. Ensure that the skills of your vendor match the requirements of your project.
Experience says a lot about one’s problem-solving ability. The more experienced a developer is, the more varied the software problems they have faced, giving them an edge over someone who is merely skilled but not experienced. That is why people go for senior developers. If you are hiring an agency, you shouldn’t focus on the age of the agency alone. Do due diligence to know if the members of their team are skilled and experienced.
Find out the developers’ our team’s proven track record by looking up their portfolio, rankings in websites like Clutch, or checking their LinkedIn profile to check out their previous clients. It is not a stretch if you reach out to past clients to confirm who they say they are. You must also seek to understand their approach to work, communication skills, relationship with clients, attention to detail, time management, etc. You won’t get honest information regarding this without talking to past clients.
The underlying factor of all these considerations is compatibility, which, in essence, means is the agency right for you? Therefore, even after finding out all the other points, you must also consider the agency’s value system. What principles do they hold important? And how do they align with your organization’s?
>> Once you have these details and have selected your preferred Offshore Development Company, it is time to contact them for an interview.
Offshore Development Center Services In Vietnam
In recent years, Vietnam has been the ideal destination for you to find offshore development team. It has competitive labor costs compared to other countries, a large pool of IT talents with foreign language proficiency, and open policies regarding foreign companies of the government.
- Ho Chi Minh City in Top Outsourcing Cities in 8 consecutive years (Tholons, 2009-2016)
- Vietnam is ranked 1 in pioneering location and cost environment (Cushman & Wakefield business process outsourcing and shaped service location index, 2016-2017)
- Top 10 countries with the most engineering graduates (Forbes, 2015)
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