How To Manage Your Offshore Custom Software Development Team

How to Manage your Offshore Custom Software Development Team

February 8th, 2021   |   Updated on January 17th, 2023

Given all the digital transformation occurring today, businesses are turning towards higher levels of work independence.

In other words, large and small enterprises are more welcoming of the idea of agile work processes by hiring an offshore team. It is expensive to stay ahead of the competition.

Hiring an offshore software development team provides modern optimization for businesses to remain under the budget and scope of their project requirement by successfully outsourcing their work to remote specialists.

The IT outsourcing statistics report from 2020-2021 states that outsourcing project development has been much higher in the past year. Offshore teams are even more accepted currently due to the pandemic situation.

However, if left unchecked or unsupervised, managing an offshore software development team might just as well become the next nightmare. Managing an offshore team has a couple of high-level limitations and difficulties such as:

  • Diversification in communication and language support.
  • Higher staff turnover due to difficulty in managing specialists without an on-board member.
  • Sharing knowledge and cultivating an understanding work style.
  • Safety control and protection over data due to the lack of face-to-face communication.

There are more, but the above are a few critical commonly occurring problems with managing an offshore team.

To eradicate such issues and reap the best of benefits and avoid having to pay through your nose, we have come up with a proven step-by-step guideline on how to manage an offshore software development team.

Most CIOs and CTOs are aware of the marketing hype “Offshore teams save IT costs,” and the successful offshore dynamics required.

They quickly learn the potential benefits and risks of the same. But, often in seeking lower-cost production, in the pilot testing stage of an offshore team, CIOs realize that to manage an offshore team, they require immense support from an in-house team to achieve real budget savings.

Thus, we have segregated the steps of managing an offshore software development team effectively into four essential sections for better productivity and understanding.

Development And Implementation Of An Offshore Portfolio

This phase involves creating certain practices to help your business overcome offshore software development team challenges even before working substantially with the offshore team.

Step 1

Escalate and focus on the importance of hiring an offshore team and outsourcing the development requirements.

Step 2

Understand the learning curve involved with implementing an offshore team to foresee the emergence of risks, investment costs followed by the offshore team’s quality and values.


Step 3

Select an offshore model that best suits your business work-culture, project requirement, and scalability of your in-house team to balance risks and costs involved. There are three critical offshore models, namely:

  • Extended Team: Offshore developers hired to scale up the existing in-house team
  • Dedicated Team: Offshore specialists who are hired to accomplish a particular job task.
  • Outsourced Team: Offshore team who are involved throughout the planning till the end of project release phase.

Step 4

Ensure to create a centralized work control to consolidate management of the offshore software teams. Most likely, it is always easier to have one or more in-house project managers or a supervisory officer.

For advanced software projects, establishing a centralized control helps to successfully identify underlying issues that may prevail and present solutions that help overcome them.

Step 5

Hire an intermediate firm that serves as a consulting firm for your business and the offshore team or use the centralized command through the in-house project manager/supervisor to guide offshore culture, hosting meetings, and so on.

Step 6

Select the best offshore team based on the following important twelve key traits that make a smart, productive, and quality induced offshore team.

  • Project governance capacity
  • Business management quality
  • Domain expertise
  • Leadership capabilities
  • Program management diversity
  • Behavior management ability
  • Resource sourcing practices
  • Technology exploitation experience
  • Process improvement
  • Customer development offerings
  • Planning and contract capability
  • Organizational design culture-fit

Mitigation Of Risks Occurring With The Offshore Team

The second phase involves reducing or eradicating the risks identified with an offshore team’s management after successfully implementing an offshore portfolio.

Step 7

Consider testing the offshore team by making them work on a pilot project to understand business risks, their capacity, and limitations before offering them the chance to work with a core-project.

Step 8

Provide necessary options to the offshore team to choose convenient work practices, location of work, communication language, data security practices, and so on.

Step 9

It is very crucial at this stage to hire a legal officer/expert who will serve as subsidiary management between your business and the offshore team to ensure control and visibility on all job tasks.

Step 10

Establish a practical and essential session to communicate the offshore integration strategy to all the business stakeholders and cut down any existing risk.

Step 11

Create secure links and pathways to share information, resources, and reduce redundant business infrastructure lines that may limit the offshore team to achieve their full potential.

Step 12

Achieve consensus on the pricing model and payment methods. Post a mutual acceptance, ensure all legal documents are signed, accepted, and understood by the offshore team and the in-house supervisor/project manager.

Creation Of Influential Offshore Team-based Work Culture

Post successful mitigation of risks, the next phase involves creating a work environment that supports and encourages an offshore team’s work-fit culture.

Step 13

Establish an ideal work-control relationship ratio between in-house and offshore software developers. Reduce the work process gap by creating a quality organizational offshore-culture design.

Ensure that the control ratio is almost equal to all the parties involved but with more liaison and focus over the in-house team. They are responsible for managing the relationship with the offshore team and their requirements.

Step 14

Bring in a Capability Maturity Model (CMM) expert who can identify the offshore team’s expertise to flush out any existing ambiguity in the work process. As a result, you can get a chance to negotiate the payment models further.

Step 15

Cross-examine or replace the key personnel involved in the project who have cultural and communication barriers.

Step 16

Make a standardized rule and procedure for the offshore team to submit daily status report feasibility and periodically. Refrain from micromanaging the offshore team, which may lead to discomfort between all the parties involved.

Step 17

Consider creating real-time dashboards to synchronize workflow and verify management practices daily for constant improvement if needed. Recognize results to provide achievement rewards or benefits to the offshore team.

Step 18

Create a mutually accepted solution to lower the bottleneck identified with the time-zone differences.

Ensuring Cost-saving Simultaneously While Protecting Data And Work Quality

At this stage, the offshore team will most likely be at their potential maturity in performance-driven with result-oriented behavior.

In this phase, the following steps will help you identify more areas that can help you save cost while efficiently managing the team deployed & responsible for custom software development services.

Step 19

Calculate overall savings between your transaction cost and production cost with the offshore team and scale up/down the offshore team or the project size to receive total savings on the price.

Step 20

Create balanced key scorecard metrics to develop meaningful relationships and quality assurance with offshore technical experts, governance specialists, and in-house project managers. This will help your business stabilize the ideal ratio between the in-house manager/supervisor and the offshore team.

custom software development services.


Hiring an offshore team is highly beneficial that can provide a lot of opportunities at a low cost for any kind of business in the modern world.

Knowing how to manage them successfully is the critical trait that plays a vital role in achieving the desired result.

It is always important to keep in mind that a remote offshore developer or manager is as important as your company’s team. It is necessary for the virtual teams to feel welcomed at your company as much as the in-house team.

Author Bio –

Hardik Shah is a Tech Consultant at Simform, a leading software development company. He leads large scale mobility programs that cover platforms, solutions, governance, standardization, and best practices. Connect with him to discuss the best practices of software methodologies @hsshah_.

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