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Outsourcing Software Development in 2021

Nisha Gopinath Menon
June 13, 2021

Offshore software development entices companies with their exciting cost savings potential and faster turnarounds. Outsourcing has seen both successful and unsuccessful projects. Even so, a lot of companies hesitate to take the leap and outsource because of the stigma attached to it. Today, even with the rising awareness of the cons of outsourcing, there are an increasing number of firms who choose to outsource the development and maintaining of their software. This blog doesn’t go into the merits and demerits of outsourcing and whether or not a company should decide to invest in it. Instead, it aims to guide firms who have already implemented or is thinking about implementing offshore development. Additionally, if you’re not working with an experienced and talented offshore team, offshore development will fail, plain and simple no matter what practices you try to employ. Then again, this point holds true even if the inexperienced team you’re working with is onshore. Here's the service provider perspective.

1. A clear process

Communication problems are one of the most frequently cited issues in outsourcing. Now, communication is a broad term. Begin by taking a closer look at specific causes of these communication problems, and you’ll find threads which lead back to a clear idea of what to improve. Is it the difficulty handling the extra documentation needed to transfer project requirements? Is it the time zone differences? Or the lack of frequent interactions which you normally have with colleagues?

Begin by improving the process. Start with a tightly scheduled cycle of daily and weekly meetings. In the Agile software methodology, daily standups are by default organized. Not all software firms use Agile, still by ensuring all the team members meet for 15 minutes every day and for about an hour every week, things start to move a lot faster. The people who are attending, the timings and the agenda should be noted down in a clear process description. If the meetings become a routine and the process is followed in a structured way, you have laid down a stable foundation for the outsourcing engagement to streamline communication. Communication problems will begin to solve itself since people have a daily chance to discuss and align behavior. Teams start finding their solutions, without management having to spend days on training and problem-solving sessions.

Most often than not, everything is written on paper, and people try to understand each other through the written medium, whereas, in spoken word, unclarities get cleared more efficiently and much faster. So, organize a one-hour session at the beginning of a project where teams can discuss the requirements.

2. A reliable project management tool

An online project management tool is essential. For software development teams, this tool should come with distinct sections for reporting bugs, tasks, and questions. Again, build a routine around this tool. It starts with writing clear guidelines on how to use the online system, if three people use the same system differently, you’ll end up having communication problems again. Furthermore, ensure all communication happens through the online tool.

3. Clear guidelines on developing requirements

Writing clear requirement documents can prove to be a hurdle. Teams spend hours writing the documentation only to find out the next day the external team has three pages of questions. The problem is there is no standard for developing specifications. Establish a single format and both the authors and the readers will understand requirements better.

4. Share your business context

Often we don’t provide a business domain understanding or share our expectations with the entire team. Your onsite team members have the privilege of interacting with business users. Hence, the domain knowledge must be transferred by your onsite team to offshore team members. Then the entire team is on the same page.

5. Onshore technical team lead

Keep an onshore team lead whose only job is work with the offshore team. Companies assume someone can manage offshore development whenever they find time between their other responsibilities. This will prove to be a recipe for disaster. The team leads responsibilities are to establish coding standards, and practices, review code, help solve difficult technical challenges, help give technical direction, and help train and mentor the offshore team. This is a full-time job, no different from a team lead working with an onshore team.

6. Stick to highly skilled, small teams

Try to go to smaller, experienced firms rather than large firms with multiple layers of management, with a higher chance of miscommunication and unnecessary overhead. A six to seven team of skilled offshore developers will be more efficient than a larger team of average developers.

7. Challenge your offshore developers

Skilled, experienced developers enjoy being challenged even if they're offshore ones. You may have ideas for designs in your head, but give the offshore team a chance, and you'll be surprised at how many ideas they come up with. This is when you know you have a good offshore team. Also, offshore developers will feel a sense of ownership and want to stay on your project and contribute more if they feel like they are helping with the critical technical problems faced by the organization.


All offshore projects don’t fail, just as keeping projects onshore won’t magically solve all your problems. Project breakdowns occur due to various factors like poor process development, incomplete requirements gathering, or an underinvestment in vendor management. Developing software with your team sitting half a world away, working in different time zones is very challenging. We understand the practices mentioned above won’t solve all your problems and moreover, not all the practices will be feasible to implement in every firm.

 Outsourcing is still going strong and additionally, most experienced corporations express satisfaction with their offshore relationships, and the majority of IT outsourcing contracts are revived after expiration. Nevertheless, not all companies have what it takes to make use of the international job market. Money will still be the deciding factor for most firms.
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Nisha Gopinath Menon