Building a Dedicated Offshore Team: How to Ensure Success

Introducing offshore teams into product development environments is a challenging initiative. Remote locations, skills outsourcing, and cultural fit are some challenges that a technology leader faces when integrating offshore resources. In addition, language barriers and time zone differences can complicate the relationship between the dedicated offshore team and the project stakeholders.

However, when offshore resources get appropriately introduced and managed, these teams can reduce a product's development costs and improve its time to market. On the company level, hiring an offshore development team can help get a competitive advantage and use internal resources more wisely to earn a greater return on investment in the long run.

Below are guidelines that will help product and technology leaders integrate dedicated offshore teams into the development process and avoid common pitfalls. We aligned our guidelines with the Gartner's tech trends for 2023.

Understanding Offshore Team Outsourcing 

In simple terms, offshore outsourcing defines contracting a function to an external IT vendor that provides its remote resources cheaper than local counterparts.

For example, an eCommerce company outsources a web development function to a dedicated offshore team located in a low-cost country with affordable hourly rates. Additionally, the offshore team could dedicate its unique expertise to a specific functional area, such as providing MEAN- or Python-based development services.

The reason for IT offshore outsourcing often comes from a lack of in-house resources in any of the four areas: project management, software development, quality assurance, and system administration. When the project leader needs more dedicated internal resources to complete a project on time, offshore resources are an obvious solution.

Delivery Models: Offshore, Nearshore, and Onshore

Depending on the delivery model, you can decide between onshore, nearshore, and offshore outsourcing.

• Onshore outsourcing is the traditional model, where resources are close to the project team. The onshore team's members will visit corporate headquarters consistently, such as weekly or daily, to meet with the project leaders and their colleagues.
• In nearshore outsourcing, resources are located in a low-cost country close to the project team's home location. For example, if the project team is in the United States, the nearshore team may be in Canada or Mexico.
• Finally, offshore outsourcing can take the form of an entirely remote team. Offshore team outsourcing typically benefits companies with a distributed workforce model that want to reduce the cost of developing products.

A Challenging Relationship

In any offshore relationship, technology leaders should always ensure that the remote dedicated team is part of the company's core values. This means that both parties clearly understand their goals, what the project will accomplish in reality, and how to work together as a collaborate team.

In our experience, you will almost fail to benefit from team outsourcing unless you stick rigorously to the following steps:

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• Perform the initial selection with an offshore vendor.
• Define deliverables and expectations at the beginning of the project.
• Ensuring the delivery with periodic review of progress.
• Put measures in place to ensure that critical milestones are met and that the project remains on time and within budget.

A challenging relationship between the project and offshore teams arises due to a mutual lack of understanding. Teams that need help communicating with each other often need assistance properly collaborating with their offshore team. This situation can happen because remote resources are separate from the core team or because of a language or cultural barrier between the project team and the offshore team.

Because of these challenges, remote resources require clear communication channels between the teams. Further, when communicating with remote resources, it is essential to understand their unique way of working and what they think is best.

For example, a team leader may ask the offshore team to do something differently. Even if this is not necessarily true, offshore resources could interpret this as a request to change their standard way of working. This situation could lead to a dysfunctional relationship between the two teams and increase costs and schedule delays.

Ensuring Successful Offshore Development

The solution lies in understanding remote team communication first, then removing the language or cultural barriers that may interfere with a successful relationship.

While a remote team is not a part of the core project team, you should never treat it as an optional component. Otherwise, there would be no incentive for development speed or quality.

It is critical for offshore team management to understand the project's long-term goals. If the dedicated offshore resources are part of a strategic plan, then it is worth the incremental cost to achieve that goal.

From a project leader's point of view, estimate costs and benefits on a case-by-case basis. For example, if the remote team increases the product's value and ROI, it is worth its incremental cost.

Communication and training are essential to a successful offshore relationship. Here are a few suggestions in this regard:

• Interpersonal communication: leaders must communicate project details at regular, high-frequency meetings with the dedicated offshore team. This situation will allow team members to collaborate more effectively in remote environments. Also, team members will get a chance to ask questions and clarify requirements.
• Trust and rapport: building a strong, trusting relationship between the core team and the remote team members will maintain communication. The offshore team is the project's biggest ally; without their contribution, there is no way to build a successful product. So pay them fairly, treat them with respect, and provide them with the tools they need to do the job.
• Cross-cultural understanding: offshore and onsite team members should also be trained in cultural awareness and sensitivity. Cultural differences can cause misunderstandings, leading to a dysfunctional relationship between the onshore and offshore teams.
• Flexibility: Understanding the offshore team's unique way of working is essential. Sometimes, this will mean working non-standard hours or providing additional incentives to the remote unit.
• Training should be based on each project's unique needs: in some cases, training the remote team is essential to increase communication between the two groups. In other cases, preparing the remote unit is optional. The decision depends on the unique requirements of your particular project.

Common Pitfalls to Avoid

While dedicated offshore teams can be a successful outsourcing strategy, some common pitfalls can cause even the best leader to fail. The most prevalent problem is a lack of coordination between onshore and offshore teams.

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Here are a couple of typical pitfalls to avoid when entering offshoring arrangements:

• Mismatch in expectation. You, as a leader, need to ensure that the product's timing, scope, and quality align with the expectations set for the dedicated offshore team. If there are gaps, then communication and cooperation between the teams will break down.
• Managing cultural gaps. With the increased globalization, project leaders must understand the importance of cultural awareness. Some cultural differences will lead to frustrating situations like miscommunication and misunderstanding. Managers must communicate their values and avoid underestimating cultural differences.
• Underestimating transition. Outsourcing is a critical component of the development process. Transferring knowledge and skills from the core project team to the dedicated offshore team takes time. If you, as a leader, need to pay more attention to the transition time, it can result in months of false starts and wasted time and money.
• Lack of process. Having clear and defined processes is essential when managing a dedicated offshore team. Clear communication will make it easier to identify problems in the transition process and map out an action plan to address them.
• Cybersecurity must be a high priority. As with any business, information security must be of utmost importance. No matter where the offshore team members live, they must have access to a secure working environment. In addition, there should be procedures to ensure that these facilities are adequately maintained and prevent security breaches.

Wrapping Up

The offshore dedicated team model is not a decision to be made lightly or without thought. Developing an outsourcing strategy and selecting the right development team requires a lot of planning and research.

Here are some takeaways for you to remember:

• Project management is a critical component of the offshore team. When a dedicated offshore team is part of the development process, the project leader must be able to manage their staff and the remote team members.
• Be flexible and prepare for potential pitfalls when hiring a dedicated offshore team. The team may be your only chance to meet your product's release deadline. So don't underestimate their importance.
• Be prepared to manage a small dedicated team because you will probably have to hire or outsource additional developers later. The initial dedicated team must be large enough to meet the product's needs, but as time passes, it will probably become clear that there is a need for additional resources.
• Be prepared to be frustrated by frequent interruptions. In addition, you will probably have to deal with many new team members and people who need training. This situation requires your patience in addition to strong leadership skills.
• Remember that you, as the project leader, are responsible for the outsourcing arrangement. Be the leader, make all the decisions, and ensure a successful product.