No other labor market segment boasts such an impressive statistical growth as outsourcing & outstaffing. And that’s not because most of us are working from home these days.
In 2022, 54% of all companies used third parties to provide support and customer care services. At the moment, there are over 59 million freelance workers in the US alone, and this number only continues to grow. At the same time, despite millions of US-based freelancers, 300k more jobs are outsourced annually, primarily for economic reasons. Almost 93% of all organizations around the world have tried or are currently outsourcing for at least one project.
Outsourcing is especially widespread in the IT industry: from development and QA to UI/UX, PPC, and SEO campaigns — everything gets outsourced. The reasons why companies choose to outsource software development vary. Reasons range from cost-saving and tax optimization to more intricate things like headhunting for unique talents in geographically distant localities.
Most of the reasons behind outsourcing and outstaffing in IT are efficiency-related though. These include saving time through parallel development of multiple projects, solving problems with an accumulated backlog, managing complex projects across several time zones, and so on.
Managing offshore development is very different from traditional modes of project management, and it’s not because of cultural differences, time zone gaps, or language misunderstandings. Hiring and supervising an offshore development team would have come with its own set of truly unique challenges.
Thus, methods for successfully raising efficiency in offshore team management are very different from what you would find in a standard business management textbook.
Coordination is the key to managing offshore teams. For this very reason, Agile methodology has become the worldwide standard among developers and project managers. Following Agile principles delivers flexibility while leaving the door open for continuous improvement.
What is an Agile development team?
Truth be told, Agile has become an overused buzzword. Though this does not mean that anyone can easily come up with a precise definition.
Let’s use Atlassian’s definition as a globally acknowledged software leader: “Agile is an approach to project management and software development that helps teams deliver value to their customers faster and with fewer headaches… Agile teams deliver work in small but consumable increments. Requirements, plans, and results are evaluated continuously.”
Continuous delivery and constantly changing requirements belong to the 12 key principles of Agile.
In other words, agile is a framework under which ongoing delivery of a project is based on self-organization principles and change-adjusted management of a system of small tasks.
Just as any other management novelty, introducing Agile would require a step-by-step approach. If you are already involved in outsourcing and offshore development, we recommend following the logic below.
Agile Offshore Best Practices:
1. Always start with your vision statement
Your team can be in five different countries at the same time but must still be on the same page. Scope of Work (SOW) is the key here. SOW outlines the key objectives and the overall timeline of your project along with the reporting agenda.
Once SOW is defined, the overall project gets split into parts. Each part is then divided into smaller tasks.
Each task is initially assigned its own priority weight. However, this priority status is subject to change, depending on the feedback from internal stakeholders or changes in the external environment.
The entire SOW must be presented and explained to the whole team as early as possible.
2. Build a roadmap
As multiple tasks under the same SOW would be performed in parallel, having a common timeline is a vitally necessary prerequisite for any complex project.
If you are having trouble visualizing the timeline, there are many online tools to help you compile a roadmap. Monday and Asana are probably the most popular examples of roadmap planning software (note that most of these tools have free trial options, so you can test a few and decide).
It is important to note here that the goal of building a single roadmap for your entire team is NOT to impose deadlines. The priority here is to provide a clear view of the overall concept of your project.
Deadlines, in fact, should be relatively easy to extend. Keep in mind that this is Agile — flexibility and changes on the go are the cornerstones of the entire operation.
3. Do not cut costs on management tools
When working with an offshore team, you are sure to save on renting an office. These unspent funds should be invested in collaboration software. It could be a good idea to start with something as simple as Zoom: having free plans in Zoom means you can’t record meetings, and these meetings would be limited to 40 minutes. Having a few paid plans would save your team from many misunderstandings and confusion.
Trello or Jira, Confluence or GitHub, Slack or Microsoft Teams — this is all very much to your benefit. The budget differences are not that dramatic in this segment of online tools. You can simply ask your offshore team to vote on their preferences.
4. Regular syncs with the customer
Constant communication is the major difference between Agile projects and traditional ones. Team communication with the end customer should be part of the daily routine. The development process must start with a detailed customer interview.
Testing should always be recorded and then delivered to the customer. Every single feature, even the most insignificant, should have customer feedback of its own.
PM or other team members should step in as an intermediary if you anticipate any misunderstandings in this communication due to language barriers or cultural differences. In exceptional cases, hiring an interpreter for just an hour can save you dozens of hours of development time (and no, this is not a sign that your offshore team is unprofessional).
Even if you follow Agile offshore best practices very thoroughly, there might still be challenges on your way to sustainable and flexible offshore team management. Some of these challenges are actually quite widespread, and there are ways to prevent (avoid) them, at least partially.
Common challenges in managing an agile offshore software development company
1. Scheduling across several time zones
If your teammates are based in South East Asia, Europe, or US/Canada, scheduling mandatory online meetings can be a real problem. Make sure everyone has easy access to each other’s calendars. It is also good to have a joint list of national/bank holidays for every country involved. The same applies to joint calendar vacations and days off.
If your product (service) is already live on the market and requires permanent support, it is most advisable to have support reps in at least two time zones that do not overlap. Thus, you would guarantee your very first customers can get help whenever they need it.
2. Security and compliance challenges
Do not assume that if you’ve hired IT people, they cannot become victims of phishing attacks or other scams. They may still receive an email from a “fake boss account”, or get caught in a rush and come up with a password as easy as 1234.
Besides, many offshore developers choose to work in a workcation mode, often using unsecured WiFi networks somewhere at a beach hotel or in a village cafe. Your early developments can be easily compromised.
Basic security training must be organized at least every six months. If you don’t have an in-house compliance officer — hire a freelance consultant for two or three hours once in a while. Investing in security is never a waste.
3. No common vision
If your agile development team is scattered across several countries, that does not mean it cannot have a corporate culture feel. For one, everyone should be on the same page regarding your mission, vision, and values.
Do not disregard the onboarding process. Even for very temporarily hired freelancers or purely technical contractors who won’t be anywhere around your frontend, design, content, or customer reach out.
Precise understanding of the product’s value and mission strengthens employee engagement and boosts efficiency.
4. Communication misunderstandings
Having a clearly written code of conduct is probably the most efficient way to avoid language confusion and intercultural misunderstanding between remote workplaces.
This Code does not have to be a 50-page long legal manual. It can be as short as 10-12 plain statements, like: “All chat communication is in English only”, or “If you go on vacation, indicate the final day of your vacation in your status”, or “Move tasks to Done on the same day as they are completed”.
These tiny things may seem insignificant, but in the long run, they become tremendous contributors to higher overall productivity. Besides, the Code will help you prevent many potential interpersonal misunderstandings.
5. Lacking a standard playbook
It is a widespread problem of many large organizations and remote teams when people from two different teams/projects are talking about the same thing, but calling it something different.
Having a common vocabulary and consistency across all processes is highly important. Your playbook can be a simple Google Doc, a Wiki project, or it can be documented in Confluence.
Make sure everyone knows where to look up your glossary of terms.
6. Uncertain hierarchy of responsibilities
Offshore development teams need hierarchy too. Of course, it doesn’t have to be as rigid as a corporate one. But a hierarchy must be present and well documented. Ideally, it also needs to be visualized. Every member of your agile development team should be aware of which responsibility center is specifically accountable for.
Note that having an internal hierarchy in your team does not mean that communications have to be hierarchical. A team member should still be able to reach out to any other team member, across the teams, and disregard any hierarchies.
7. Mismatch between expectations
As mentioned above, Agile offshore development is based on ongoing changes and continuous delivery. As changes become regular, teams’ expectations regarding each other’s performance also change. Make sure all sides are on the same page in terms of expectations.
The internal client should always start their conversation about change with clear instructions and a detailed explanation of the necessity of change and its targets.
Milestone meetings must always be recorded, with the minutes carefully taken and a follow-up summary emailed to all the invited team members.
So, in-house or offshore?
Obviously, both modes have their advantages and bottlenecks.
If delegating is a psychological pain for you, and you are more into helicopter management — feel no shame for it and simply go for in-house development in its entirety.
However, you need to be prepared to embrace more of the daily routine and more recurring costs at the same time. Which, unfortunately, does not always mean higher productivity and more work done.
Managing several geographically distant teams might be a real challenge, especially now, when international travel is very much restricted. But it also comes with a range of unique benefits:
- Thanks to time zone differences, work on the same project can go on 24/7
- International exchange of experiences and best practices may lead to much more creative solutions and higher efficiency in decision-making
- International presence, if positioned wisely, may become a significant reputational gain
Agile is what makes offshore software development almost invincible. Increased flexibility and continuous improvement under Agile means you can manage multiple complex projects in parallel, without making any sacrifices in terms of human or tech resources.
On the manager’s side, Agile delivers much higher project predictability and reduced risks of project failure.
On the customer’s side, Agile means more open communication with the executors and transparency throughout the entire timeline of a project.
Finally, Agile delivers multiple benefits for developers themselves, both organizational and psychological. Agile offshore development means higher adaptability of work-in-progress to sudden changes and other externalities. Agile provides complete transparency and clear accountability for each process, no matter how small. On the human side, Agile contributes to stronger team spirit, fair work/life balance, and much lower professional burnout among developers.