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| TL; DR Offshoring gives you access to top talent worldwide, without the geographical and cultural limits. Despite the upsides and challenges, outsourcing IT teams comes with its share of hassles. Trust gaps, communication issues, and management friction can arise, derailing the outcomes. But they’re manageable with the right setup. Clear planning, smart onboarding, regular feedback, and no micromanagement: these are your offshore team essentials. |
Offshoring is no longer a concept, but one of the biggest accelerators of the IT industry. Building new offshore teams is a widely accepted approach for businesses of all sizes to tap into a large talent pool, reduce recruitment costs, and improve efficiency.
Are you willing to scale your IT team and build an offshore team?
Read this blog to understand offshore team advantages and disadvantages, the differences between all the models, the impact of AI on offshore teams, and key strategies for building a successful offshore development center.
Let’s start with understanding the basics…
Offshoring refers to relocating business functions to another country to reduce costs and tap into global talent. It often involves hiring external teams but maintaining internal control over operations.
Unified Infotech’s experts say, “Offshoring refers to relocating internal business functions or even entire departments to companies operating in other countries. The idea is to leverage lower labor costs, favorable regulations, and geographic advantages.”
Wikipedia says, “Offshoring is the relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting.”
Offshoring gives businesses the choice of working either by renting third-party offshoring services or by building your offshore IT company.
As per Forbes, the US dominates the worldwide offshoring market, and around 66% of US-based companies opt to offshore their operations. Some of the countries benefiting from this widely are Canada, Mexico, India, Singapore, Portugal, etc.
Building offshore teams allows you to tap into a world of endless opportunities. From diverse skill sets to efficiency and cost-effectiveness, offshoring solutions allow you to broaden and strengthen your workforce.
Likely, here are the benefits you enjoy when you build offshore team
Hiring advanced skill sets for internal teams can be challenging, with regard to both budget and finding the right candidate. Ringing candidates up, taking interviews, negotiating employee benefits, and taking care of the onboarding process can drain time and effort. With offshoring, you negate all these efforts, while welcoming budget-friendly recruitment and budding talent, increasing the effectiveness of your projects.
One of the many benefits of dedicated offshore teams
The best offshoring strategies for tech companies improve operational efficiency by delegating specific tasks to locations with highly skilled professionals who can perform them more efficiently. This streamlines the process and ensures higher productivity.
What initially was a challenge now fosters innovation and adaptability. Having professionals from varied backgrounds opens the path to fresh ideas and different approaches to operations.
Not to forget, offshoring ensures your team is working 24*7. This time zone advantage increases productivity and faster turnaround times.
Pro Tip: Consider following the “Follow-the-Sun” Productivity Model. By using distributed offshore teams located around the world, you are able to maintain a constant workflow. When one team stops working, another team picks it up, allowing 24/7 work. This model increases efficiency, speeds up delivery, and reduces downtime; it feeds perfectly into our agile mode of work for 24-hour development and support.
Offshoring allows you to scale your team up or down based on your project requirements. This flexibility to scale becomes an important factor in today’s fast-paced environment.
Not to forget, offshoring also offers government support in certain countries, like India. This adds to the growth and the process of scaling software teams globally, making it an ROI-driven approach for small, mid, and large-scale businesses.
Like two sides of the coin, offshore team challenges are hard to ignore. Check these out –
Upon outsourcing to offshoring countries, the question of maintaining content quality and project delivery deadlines becomes a matter of thought. This leads to a lack of trust, making many companies hesitant to outsource their work to offshore destinations.
Language differences can result in miscommunication between the parent company and third-party vendors. Lack of proper communication drives frustration on both sides, in turn, impacting the quality of the project in question. Improving communication in the workplace is a necessity to ensure that the deadlines are met and the project is delivered smoothly with fewer to no roadblocks.
Now comes the biggest elephant in the room: project management, one of the greatest roadblocks in remote teams. The key here is to develop a strong communication channel to address issues quickly and effectively manage the project. With the right planning, project management tools, and communication, working with a third-party vendor becomes more fun than ever.
Data protection is a concern when you outsource your project to offshore countries. While most companies with offshoring services have predefined data protection standards that they use with the best intentions to keep their clients’ information confidential, it is integral for your part to have a quick look before signing the contract and sharing the credentials.
When you choose offshoring, you are losing complete control over your project. This may be due to the above-mentioned challenges related to communication, management, etc. The problems may be the byproduct of working in different countries, in different time zones.
And the list doesn’t end here…
You also have to deal with cultural differences, lack of transparency, lack of skills and expertise, geographical distances, etc.
Check out these differences between outsourcing and an offshore development team.
The first line that differentiates outsourcing and offshoring is the nature of work adhered to. While outsourcing appoints specific tasks or functions to a third-party or external vendor, offshoring moves the entire operations or process to a different location altogether.
Outsourcing gives your vendor the complete freedom to run your business functions; however, there is complete communication between them and you.
Offshoring gives complete control over your operations, while you oversee your people, infrastructure, and processes to maintain smoother operations.
Offshore outsourcing is cost-effective for short-term projects, allowing you to save on labor costs. However, onshore outsourcing might not be a viable option if cost savings are what you’re looking for.
Offshoring is perfect for cutting down labor costs and other expenses, such as utilities, office leases, etc., for long-term projects as well.
Upon outsourcing, your agents taking care of your projects are not your employees, meaning you do not have to take care of their salaries, leaves, etc., and the entire process is taken care of by your outsourcing services provider.
But, when it comes to an offshoring services provider, you basically hire people or teams provided by your agent working from different locations.
Other parameters include time zone differences, cultural differences, technological investments, long- or short-term investment, etc.
Need more insights?
AI redefines how offshore teams operate, ensuring efficiency, scalability, and agility, and the outsourcing, offshoring, or nearshoring differences. Automating repetitive tasks through AI allows teams to focus on tasks of more importance and of greater value. This makes way for innovation and productivity.
Certain tools like chatbots, predictive analytics, and project management platforms to improve collaboration, reduce operational costs, and improve communication across different time zones.
But not to ignore, AI demands upskilling and reskilling to remain competitive. Additionally, cultural alignment, data security, and regulatory compliance should also be looked into carefully.
AI impact on offshore teams transforms the way distributed and offshore teams work, communicate, and deliver, by bringing efficiency, insight, and predictability mainly through automation. AI delivers real productivity, transparency, and decision support across time zones from hiring to delivery.
AI tools for offshore collaboration include:
Offshore team development requires meticulous planning to ensure better collaboration and seamless delivery of projects. Here are the offshore development best practices that you should follow.
The first step in remote team management best practices is to define your objectives. Have a clear understanding of what you want, identify the skill set your project would require, and the culture you are ready to provide. Also, consider how your offshore team will fit into your business and drive success.
Check your work schedules to choose the perfect location for your offshoring teams. This also helps in proper offshore development budgeting and planning and ensuring cost savings, which is one of the primary goals of offshoring, nearshoring, and onshoring.
Communication is the key to building a successful offshore team. Ensuring communication is clear and to the point will avoid misunderstandings and make messages easily comprehensible. Avoid jargon and keep your information straightforward.
Using tools like Jira, Microsoft Teams, and Confluence can be proven effective in maintaining seamless communication.
Practices like video conferencing can be a great strategy on how to manage remote developers and maintaining a healthy bond between team members. It’s good that your team should know who you are, not just through a photo or avatar, so that you can develop a meaningful and effective working relationship.
Videos are so much better because they allow you to see some expressions of the moods and feelings of your offshore team. While you should be happy that they’re satisfied and doing good work, if they’re not, you can find out why via regular calls and hopefully fix that.
Remember: Schedule calls beforehand to ensure that the team is aware and joins at the same time. This ensures that every member of the team is on the same page and gets the information required at the same time.
Better collaboration is equal to maximized productivity. Fostering a collaborative environment requires teamwork, unified goals, building team spirit, and having a feedback mechanism.
Regardless of the location, make sure that your team is unified, understands the company’s goals, and aligns itself with the project’s objectives. Encourage teamwork so that people can work together toward a common goal.
Also, consider Cultural intelligence (CQ), an essential skill for successful offshoring, enabling teams to navigate cross-cultural dynamics with empathy and effectiveness. When working with offshore developers or partners across time zones and cultures, high CQ helps build trust, reduce miscommunication, and foster collaboration.
Teams with strong cultural intelligence adapt faster, respect local work styles, and create a more inclusive and productive global work environment—making it a strategic asset for businesses scaling through offshore models.
How much you spend and what you spend on play an integral role in driving a successful offshoring approach. Invest in the right tools and channels to ensure that the process becomes smoother.
When offshoring, the first step is to ensure that your data is secured and compliant. Depending on the industry your business belongs to, you will have different rules and regulations to comply with. Being compliant allows you to avoid regulatory disputes.
Quality requires training and support. If you want your offshore dedicated team
Monitor performance and manage expectations to make sure that the project is on track. You can harness the power of project management software to monitor and evaluate tasks, track bugs, and measure developer performance. Some of the common tools for monitoring include GitHub Insights, Jira, and Trello.
Recognize and praise exceptional performance. Recognition comes in many ways; formal awards, bonuses, and public acknowledgments are all methods of recognizing accomplishments. Positive reinforcement motivates team members and continues to encourage them to perform at a high level.
Micromanaging can be the pest that ruins your garden.
Team management and micromanagement have a thin line of difference and should be addressed cautiously. Let your team work independently and only flag them when necessary.
Always remember, you are running a business, not a Montessori, and you are managing employees, not toddlers, who need to be monitored at every move and step.
Always remember, they are not just a small ‘offshore team’; instead, they are your team, working for your goal. Thus, they deserve respect, appreciation, and a better environment to work in. Never establish an ‘us versus them’ environment, as it can bring their confidence, innovation, and morale down.
Pro Tip: Consider micro-agreements for autonomy – small, flexible decisions made by offshore teams within guardrails. This creates trust and removes bottlenecks while maintaining control.
Shadow onboarding is a proactive approach in which offshore team members rotate through active project teams to be onboarded at some future date. Team members can learn workflows, tools, and communication dynamics in real time, as if they were part of the current team. Learning this way allows them to form a long-term understanding without having to engage in immediate local responsibilities or decisions.
An outcome of shadow onboarding is that a member can rapidly ramp up a team during expansion, onboard friction can be reduced, and a pipeline of talent is developed.
For companies accelerating growth with numerous distributed teams, shadow onboarding can not only increase an ongoing project team’s productivity, but also reduce reliance on certain critical resources and provide culture and expectations with future job hires from day one.
“The important thing about outsourcing or global sourcing is that it becomes a very powerful tool to leverage talent, improve productivity, and reduce work cycles.” – Azim Premji, Chairman, Wipro Limited.
As the concepts of outsourcing, offshoring, or nearshoring evolve, we ensure the best solutions for our esteemed clients. Our team of developers ensures productivity, innovation, and enhanced collaboration, so that your goal is met with limited roadblocks.
Once you partner with us, we will –
When adhering to offshore team development best practices, you are investing in improving the future workforce best placed to innovate and grow in a globalised world.
Pro Tip: You can combine our staff augmentation services with offshoring to scale efficiently. Augmenting your in-house team with offshore experts will lead to cost savings, flexible project scaling, and round-the-clock productivity. And all this will be done without compromising quality or control. This hybrid approach bridges the gap between local leadership and global talent, and offers agility and faster delivery in a competitive environment.
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Building scalable offshore teams that grow with your business is more than just being cost-effective; it’s about being strategic, thinking about cultural similarities, and fostering continual collaboration.
As your business scales, you’ll rely on additional, integrated offshore teams that offer you wide talent pools and improved agility. Creating a foundation for growth includes being clear about communication, onboarding and training employees, and sharing the overall vision of your business among all sites.
Establishing trust, accountability, and relationships based on good leadership will help you transcend continued geographic and cultural distance.
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Think about issues such as talent availability, time zone overlap, language fluency, culture fit, infrastructure, political stability, and cost. Research top regions (like Eastern Europe, South Asia, Latin America, etc.) and align them with your particular technical and operational needs.
Use SMART goals, clearly defined roles, and align team objectives with outcomes that impact business. Leverage project management tools, weekly check-ins, and KPIs to measure progress. Document intended expectations to ensure expectations are consistently reviewed to prevent misalignment.
Set clear communication channels, use collaboration tools (such as Slack or Microsoft Teams), and necessitate regular video conferences. Fostering transparency, developing overlapping working hours, and being aware of your culture and respecting each other is crucial.
Prioritize onboarding, provide sufficient documentation, and build accountability. Encourage feedback, celebrate successes, and support lifelong learning. Use agile thinking to ensure continual progress and adapt efficiently.
Potential pitfalls include vague requirements, time zone chasms, poor communication, and lack of oversight. You can avoid them by providing clarity on goals, using strong tools, hiring experienced project managers, and developing strong relationships with your offshore team.
Focus on streamlining the onboarding process, developing repeatable processes, and building team culture. Utilize performance metrics to guide you in your growth, find a trustworthy partner to outsource work to that can help you scale, and in your planning, consider the infrastructure and leadership you’ll need to scale.
Financial benefits, recognition programs, development opportunities, and a collaborative work culture are some of the key strategies that motivate offshore teams to give their best, increasing productivity and job satisfaction.
Best practices include meeting your offshoring team at least once a week. Regular interactions keep everyone aligned with the project goals. It also ensures that issues are addressed proactively, and the team upholds a sense of unity.
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