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06 Nov 2023

How to Form An External Development Team in 15 Easy Steps

Considering the ups and downs the technology sector has recently gone through, including an abrupt 2022 tech crash, businesses are constantly seeking ways to make their software development efforts more affordable while staying competitive with their results. One of the cost-saving strategies that has gained significant popularity is outsourcing software development to specialized teams, either domestically or abroad. Software outsourcing offers several advantages, such as cost savings, access to a global talent pool, and the ability to focus on your company’s core business functions. However, building an outsourced development team requires careful planning and execution - otherwise, you might end up working with remote developers who are not a good fit for your company culture or project requirements. In this article, we will explore the key steps necessary to build a successful outsourced development team and embark on your IT staff augmentation journey headed toward clear success.

First, What Is An Outsourced Development Team?

Graphic showing the statistic of 70% growth for the software outsourcing market according to Forbes.70% growth for the software outsourcing market according to Forbes.

An outsourced development team is a group of professionals hired either independently or with professional help from a third-party organization offering software outsourcing services to perform all sorts of development tasks. These could range from general software development, web development, and application development, to more specific roles like UI/UX design, QA engineering, and data analysis. Companies choose to work with outsourced development teams for several reasons. Primarily, cost savings are a significant factor, as businesses can access highly skilled professionals at lower rates, especially in offshore models. Moreover, software outsourcing also provides access to global talent and specialist knowledge that might be lacking where your company’s headquarters are located.

15 Steps To Build An Outsourced Development Team

1. Define Your Objectives

Before diving into the outsourcing process, it's essential to clearly define your objectives for the project and your new outsourced development team. What are your specific goals for outsourcing? Are you looking to reduce development costs, access specialized skills, or expedite project delivery? Perhaps your business is in dire need of al three objectives, or maybe your primary goal is simply to reduce costs as much as possible. Understanding your objectives will guide every next decision in the outsourcing process.

2. Identify Your Budget

Determine your budget for outsourcing, including ongoing costs and any upfront expenses. Consider not only the hourly rates of developers but also other expenses like project management, infrastructure, and communication tools. Keep in mind that quality often comes at a price, so avoid making decisions solely based on cost.

3. Create a Detailed Project Scope

Clearly define the scope of your project. The more detailed your project requirements are, the easier it will be to communicate them to your outsourced team. Ensure that all stakeholders are on the same page regarding project goals, timelines, and deliverables.

4. Select the Right Outsourcing Model

There are various outsourcing models to choose from, each with its own advantages and disadvantages. The choice of outsourcing model should align with your objectives, budget, and the scope of your software development projects. The primary models include:

1. Offshore: This involves outsourcing to a team located in a different country that’s located significantly far away from the base of your company’s operations. It can offer major cost savings and access to a broader, readily available talent pool.

2. Nearshore: Nearshore outsourcing involves partnering with a team in a neighboring or nearby country. It provides the same benefits as offshore outsourcing while minimizing time zone and cultural differences, still providing significant cost savings.

3. Onshore: Onshore outsourcing means partnering with a team within your own country. While it may not offer the highest cost savings, it can provide closer proximity and ease of communication while giving your company enough staff flexibility.

4. Hybrid: A hybrid model combines elements of the strategies listed above. For example, you could have a full-time in-house team working alongside a remote team made up of both nearshore and offshore developers.

5. Select a Reliable Outsourcing Partner

Choosing the right outsourcing partner is perhaps the most critical step in building an outsourced development team after you’ve decided what type of outsourcing model you’d like to commit to. Look for a partner with a proven track record, expertise in your technology stack, and a cultural fit with your organization. You can find potential staff augmentation providers through recommendations, online platforms, or by working with outsourcing advisory firms.

6. Set Up Effective Communication Channels

Effective communication is the backbone of a successful outsourced development team. Establish clear communication channels, including video conferences, project management tools, and instant messaging platforms. Ensure that both your in-house and outsourced teams can collaborate seamlessly by setting up key project management tools such as Slack, Microsoft Teams, and ClickUp.

7. Define Key Performance Indicators (KPIs)

Establish software development KPIs that work well with remote developers to measure the performance of your outsourced development team. These can include metrics like project completion time, code quality, and client satisfaction. Of course, it’s best to regularly review these KPIs to ensure that the outsourcing arrangement is meeting your expectations.

8. Develop a Comprehensive Contract

A well-structured contract is essential for protecting your interests and those of your outsourcing partner. It should outline the project scope, milestones, payment terms, intellectual property rights, confidentiality, and dispute resolution processes. Legal counsel is advised, as it will be key in drafting a solid contract - no matter if you’re hiring individual contract-to-hire developers or a fully outsourced development team with the help of a specialized provider.

9. Onboard the Outsourced Team

Once you've chosen your outsourcing partner or decided which developers to hire, it's crucial to provide thorough onboarding to help them understand your organization's culture, workflows, and project expectations. Knowing how to onboard remote developers is crucial, and the process can include access to your documentation, software repositories, and any necessary training.

10. Manage the Outsourced Team Effectively

Effective project management is key to a successful outsourced development team. Assign a project manager who can coordinate tasks, ensure deadlines are met, and facilitate communication between your in-house and outsourced development teams.

11. Monitor Progress and Quality

Regularly monitor the progress and quality of the work delivered by your outsourced team. Some of the ways to ensure top-quality results are to conduct frequent code reviews, perform regular testing, and provide honest feedback. This ongoing evaluation helps ensure that your project stays on the right track.

12. Build a Strong Relationship with your Outsourced Development Team

Cultivate a strong, collaborative relationship with your outsourced development team. Treat them as an extension of your organization rather than mere contractors. Open communication and a positive working environment can lead to better results and long-term partnerships that can help you secure major cost savings.

13. Address Any Cultural Differences

If your outsourced team is in a different country, be aware of potential cultural differences. These might be related to local holidays, popular language, and off-work communication. Respect these differences and promote cultural sensitivity among your in-house team to foster a well-balanced working relationship.

14. Address Security and Data Protection

Investing in cybersecurity and data protection is key to mitigating the risk of software vulnerabilities, especially when dealing with sensitive information or user data. Ensure that your outsourcing partner has robust security measures in place and complies with relevant data protection regulations.

15. Continuously Improve

Finally, don't consider your outsourcing arrangement as a one-time decision. Continuously assess the effectiveness of the partnership and look for opportunities to improve the process. Adapt to changing circumstances and every year’s cutting-edge technology to ensure your outsourced development team remains a valuable asset.

Ready To Build An Outsourced Development Team With Blue Coding’s Nearshore Development Services?

Building an outsourced development team can be a strategic move to enhance your software development capabilities. By following these steps, you can maximize the benefits of outsourcing while mitigating common challenges. Keep in mind that success in outsourcing requires ongoing commitment, effective communication, and a willingness to adapt to changing circumstances. With the right approach, your outsourced development team can become a powerful resource for achieving your business objectives.

Now, if you’re looking for a reliable software outsourcing partner with proven experience in the staff augmentation industry, at Blue Coding we can help you hire LATAM developers for an affordable cost. Our seasoned team of technical recruiters will ensure to find the right fit for your company and project requirements so you can start working with your own outsourced development team in just a few weeks. Contact us today to schedule your free discovery call and learn more about our nearshore development services! 

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