Creating an Offshore Software Development Team – a practical guide.

The offshore software development model is becoming increasingly popular nowadays, especially among growth-oriented firms. In fact, by 2026, the worldwide IT outsourcing market will be worth $425.19 billion. That would imply a CAGR of 4.5% over the next five years! So much that countries like Ukraine, India, Vietnam, Brazil, and others have risen to become top offshore software development nations

However, before looking at the finest countries for outsourcing software development and hiring a specialized software development team, it’s crucial to understand what offshoring entails and why it works.

Nearshore vs Offshore Outsourcing: What is The Difference?

Outsourcing is the practice of transferring a company’s business operations to another firm, typically because the client company lacks the necessary facilities, infrastructure, or people to complete a task.

Nearshoring and offshoring are the two most common forms of outsourcing overseas. Nearshore outsourcing entails sending a project to a firm or vendor in the same or very close country. Offshoring, on the other hand, refers to shipping a project to a firm or vendor in a distinct location (very often a different continent).

Why do companies need to outsource software development?

Even in outsourcing to any of the world’s best locations for software development, each organization must still justify why it needs to outsource any of its projects. After all, no serious firms rely solely on trends to grow their business.

Global software developers shortage is the main reason most companies outsource their software development.

The demand for software developers has far outweighed the number of qualified professionals in the market for a few years now, and this trend doesn’t seem to be reversing any time soon. Organizations simply must outsource to gain access to resources that are not available and are nevertheless critical to the project’s success. It should be noted that ‘resources’ in this context include both physical infrastructure as well as human resources.

Furthermore, small and growing businesses frequently lack the financial resources to acquire and set up the facilities and equipment they require, as well as to recruit enough software developers. In this situation, outsourcing is typically preferable, especially if you can hire an offshore development team in a less expensive location.

Statista reports that the following are the top reasons why companies outsource IT services to outside vendors. Here is what the respondents said:

  • 46% were able to acquire skills from external vendors that would not otherwise be available.
  • 36% saved money.
  • 35% freed up resources to focus on the core business.
  • 29% Improved resource flexibility in usage
  • 10% Secured more skills and capabilities to innovate

*(this was the No.1 response for larger firms with 1,000 or more employees)

For more information regarding global shortage of software developers please take a look at this article: https://nxtide.com/offshore-development-center/the-global-software-developers-shortage/

What is an offshore development team?

An offshore development team is a group of software developers who are physically located in a different country than your company. Offshore development teams can be either full-time employees of your local entity or the offshore software development company (outsourcing company).

Sometimes the offshore development team expression is confused with “remote development teams” present in startup companies. Those remote developers work from different locations and are rather a group of freelancers rather than a team working together on a long-term basis.

Here is the full characteristic of an offshore development team:

  • work physically or remotely from 1 location
  • work full time in the same way as the in-house team
  • is considered as a part of the company on the long run (crucial, long-term projects – not a temporary freelancing)
 

The benefits of creating an offshore software development team

Let’s now take some of the Statista survey answers and discuss them in more detail.

Closing the skills gap

By working with an offshore software development team, companies can access a new set of skills and capabilities that may not be available in-house. Offshore teams are often experienced in a particular technology or domain that is relevant to the project, and they can bring this expertise onboard very quickly.

Additionally, offshoring can help organizations fill critical skill gaps. When the right team is hired, it can be more efficient and productive than an in-house team.

Enhancing Innovation and growth perspective

One of the main advantages of offshore development is that it can help businesses to focus on their core competencies and enhance their innovation and growth perspective. Offshore software development teams can take care of the day-to-day operations, which would otherwise consume resources and impact a company’s ability to innovate.

Hiring offshore developers allows the business to allocate its resources toward strategic initiatives that can help them to grow and compete in their respective markets.

Faster software development

People often tout the differences in the time zones of the countries involved as an argument against the offshoring model being efficient. Indeed, it can be a challenge if proper management is lacking. Otherwise, the differences in time zones present a great opportunity to accelerate a development process and improve its time to market, especially if you outsource to a vendor located in any of the top offshore software development countries.

If an offshore dedicated team maintains a considerable relationship with the on-site team, both parties can ensure round-the-clock development such that the work hours of one side would fall to the rest hours of the other and vice versa. This means, therefore, that at almost every hour during workdays, the development process is not entirely paused.

More so, meetings can be fixed at convenient overlapping hours in order to coordinate the process and ensure better integration.

Cost Optimization

This is one of the main reasons why many businesses are now embracing the concept of outsourcing to the best offshore software development nations. It’s probably a better option to outsource the development project to a team located outside of your country where costs are lower if your organization operates in a nation with a high cost of living and high personnel wages, infrastructure procurement,

In addition, by taking your software development process to professionals located offshore, you can avoid the labor costs, fees, and regulations prescribed by your government in order to optimize your budget better

Global Offshore Software Development Rates Comparison by Country

The risks of creating an offshore development team.

There are a few risks that come with setting up an offshore development team. One of the main risks is that the team may not be able to meet the expectations of the business in terms of quality or timeliness.

Additionally, cultural differences can lead to misunderstandings and conflict between team members.

Managing an offshore development team can also be challenging, and a lack of communication can lead to problems such as missed deadlines and poor quality work.
Creating an offshore software development team can be a great way for businesses to access new skills and capabilities, reduce costs, and improve efficiency. By choosing the right location for your team and ensuring good communication, you can maximize the benefits of offshoring.

How to create a quality offshore development team?

Now that we have seen some of the benefits of offshore development, it is important to discuss how to create a quality team.

First and foremost, companies should take the time to properly assess their needs and define the project requirements. Without a clear understanding of what is needed, it will be difficult to find the right provider and build a successful relationship with them.

Once the requirements are understood, businesses can begin to source providers and evaluate their options. It is important to select a vendor that has experience in delivering projects similar to what is required, and who has a good reputation within the industry.

It is also important to ensure that the cultural fit is good between both parties. Offshore development teams should feel like an extension of the in-house team and should be able to work seamlessly together. Regular communication is key to a successful relationship, and both teams should be committed to meeting regularly to discuss progress and updates.

Finally, it is important to have a good management structure in place to oversee the project and ensure that it is on track. The manager should be able to effectively manage the team and resolve any issues that may arise.

Creating an offshore development team can be a daunting task, but if done correctly, it can be a great way to improve efficiency and save money. By understanding the benefits and taking into consideration the tips mentioned above, businesses can set themselves up for success.

The best countries to create an offshore development team.

There are many cost-effective offshore development locations around the globe to hire offshore developers. However, some of them might be too risky or have some issues with western work standards. The best way to look for quality and stability first. Next, we must analyze the country’s talent pool potential and IP security level. The last criterion should be the price. Here is our rank:

Poland

10/10

Ukraine

9/10

Mexico

8.5/10

Romania

8.5/10

Vietnam

8/10

Malaysia

7.7/10

Brazil

7.3/10

Philippines

6.9/10

What to look for when building an offshore development team with the local vendor?

Assuming you have decided that outsourcing software development is the right move for your company, what are the key factors you need to look for when choosing a vendor?

Reputation: This is critical. The offshore software development market is saturated and there are countless fly-by-night operators. Do your due diligence and check reviews (both online and offline).

Experience: It’s important to work with a vendor that has experience in your specific domain area. If you’re in the eCommerce space, for instance, it would make no sense to work with a firm that specializes in healthcare software development.

Cultural fit: This is another critical factor. Offshore development teams should feel like an extension of your in-house team. They should be able to work seamlessly together and share the same values.

Communication: This is key to a successful relationship. Both sides need to be committed to meeting regularly (ideally, daily) to discuss progress and updates.

Management: A good manager is a key to ensuring that the project stays on track. The manager should be able to effectively manage the team and resolve any issues that may arise

Build-Operate-Transfer option.

There are a number of different ways that companies can set up their offshore / nearshore development office in Poland. One option is the Build-Operate-Transfer (BOT) model. Under this model, the local software development company (partner) sets up and operates the offshore / nearshore development office for a period of time (usually 3-5 years), after which it transfers ownership of the office to the client. This BOT model has a number of advantages you can read in this article.

Looking for a solid nearshore software development company?

Opening a Nearshore Software Development Office in Poland can be a great opportunity for businesses looking to outsource their software development projects. By partnering with a reliable and experienced nearshore development company, you can get access to a team of skilled software developers who can help you deliver high-quality projects on time and within budget.

Looking for a Nearshore Development Office in Poland? Contact us now! We are a reliable and experienced nearshore development company with offices in Krakow, Warsaw, Katowice and more.

About Us:
NxTide is a specialized company focusing on building local, Software Development Teams or larger Software Development Centers in major cities in Poland. We take care of all recruitment and quality control processes making it faster and more cost-effective for you. Here is some more information about our expertise: – Over 7 years experience in creating a variety of software development teams – Over 60 teams and 300 engineers successfully hired and deployed – Several dedicated HR and IT Project Management Teams acting on your behalf.

Please take a closer look at a dedicated and flexible offer we have prepared based on market needs:
1) Software Development Teams: dedicated to clients looking to expand their software development teams or create small remote teams from scratch.
2)
Offshore Development Center: dedicated to larger and permanent projects. We’ve implemented the innovative Build Operate Transfer model to make the whole process faster, more efficient, and transparent.
3) Nearshore Software Development Office: dedicated to larger and permanent projects within the same region and continent.

Create a Nearshore Software Development Office with NxTide

Over our 7-year company activity we have helped many US and EU companies to successfully build Software Development Teams and Software Development Centers in a variety of locations in Poland.
Interested? – Let’s discuss your case on a call.
Marcin Dziedzic, CEO of Pragmatic Coders and NxTide.

Kraków

Over 0,8M population, 13% of total IT Engineers supply

nearshore software development team

Warsaw

Over 1,8M population, 24% of total IT Engineers supply

Wrocław

Over 0,7M population, 12% of total IT Engineers supply

Katowice

Over 1,8M population, 9% of total IT Engineers supply

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Łódź

Over 0,7M population, 7% of total IT Engineers supply

Gdańsk

Over 0,6M population, 6% of total IT Engineers supply

Bydgoszcz

Over 0,5M population, 4% of total IT Engineers supply

IT Outsourcing, Offshoring & Nearshoring in Poland

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