How to Outsource Development Team with Ease and Manage It Effectively?

Over the past decade, IT outsourcing has proven to be a strategic choice for businesses seeking to accelerate software development, shorten time-to-market, cut costs, and fill skill gaps. In fact, Clutch reveals that 90% of small businesses turn to outsourcing business tasks to foster growth and reduce wage expenses by 70% to 90% in top outsourcing hubs like Vietnam and the Philippines.

However, to fully realize these advantages, it’s important to have clear guidelines to effectively outsource development team. Failing to do so can result in project delays, increased costs, and underperforming products.

So, how can companies choose and manage an outsourced development team for maximized success?

Keep reading to find out!

What is an Outsourced Development Team?

An outsourced development team refers to a group of skilled professionals from an external company brought on board to handle specific software projects. These teams typically include software developers, product owners, project managers, business analysts, and other specialists.

The team members may operate from various locations globally, providing access to a diverse set of skills and knowledge that may not be readily available within the organization. By leveraging this approach, companies can tap into a broader talent pool that accommodates a wide range of IT outsourcing trends and speed up project timelines without the financial burden of hiring full-time staff.

How to Find the Best Outsourced Development Team?

With countless IT outsourcing companies available, it can be challenging to identify the right partner and narrow down their options.

Follow this step-by-step guide below to outsource a full-stack development team successfully.

Step 1. Clearly define the projects for outsourcing

The first step to take is to articulate the scope and objectives of the projects intended for outsourcing.

This includes specifying the technologies involved, the required level of expertise, anticipated outcomes, and timelines.

A well-defined project scope allows for effective communication of the company’s needs to potential software development outsourcing partners, thereby fostering alignment from the outset and minimizing the risk of misunderstandings or scope creep during development.

Check out project specification template curated for stakeholders.

Step 2. Decide on the relationship-based type of outsourcing model

Secondly, organizations need to choose their preferred relationship-based outsourcing model from the three primary options: staff augmentation, dedicated team model, or project-based model.

• Staff augmentation model augments the current team with additional skilled professionals for specific tasks or phases of a development project – suitable for both short- and long-term engagements.
• Dedicated team model features specialized teams that work exclusively on the software development project, integrating seamlessly with the internal team – ideal for complex, long-term projects.
• Project-based model involves an external team managing all stages of software development, from conception to deployment and maintenance – working best for those with a clear product vision but limited workforce resources.

For more insights into selecting the right model, refer to our blog on IT outsourcing models: Types and tips to choose the best one.

Step 3. Determine the budget

Budget plays an important role in determining the quality, expertise, and outcomes of IT projects outsourcing.

As a result, here, organizations need to first consider the scope and complexity of their software development project. Then, they need to research market rates for similar software outsourcing services to gain a realistic understanding of costs. Following that, stakeholders should account for hidden expenses such as software licenses and training for the dedicated team.

The costs associated with each outsourcing model should also be taken into account. For example, when opting for staff augmentation, companies need to factor in the expenses of integrating external personnel into existing workflows and any potential management overhead.

Step 4. Choose the geographical outsourcing strategy

The choice of where to outsource significantly impacts the success and cost of software development. Organizations can take into account three geographical outsourcing strategies:

• Offshore software development refers to partnering with a company situated in a different country, even on the opposite side of the globe, such as Vietnam. Depending on the chosen location, offshore outsourcing can be highly cost-effective while providing access to a global talent pool.
• Onshore entails outsourcing software development projects to providers within the same country. While this ensures maximum cultural and legal alignment, it typically comes at a higher cost.
• Nearshore software outsourcing means outsourcing to nearby countries, offering a balance between cost savings and enhanced collaboration due to geographical proximity and similar time zones.

Here are a few useful resources to help businesses make a well-informed decision:

• Nearshore vs Offshore Software Outsourcing: Which is Better?
• Top Offshore Software Development Company Review in 2023
• Offshore Software Development Rates By Country
• Essential Guide For Offshore Development Center Setup
• Vietnam Offshore Development Center – A Full Guide To Success

Step 5. Start searching for potential outsourced development teams

Now is the time to actively search for outsourced development teams that deliver the specific software development services desired.

Below are 3 common methods for finding an outsourced development team:

• Personal referrals: Consulting the professional network about partners they have successfully collaborated with can be an excellent starting point. This approach often gives the most unbiased and reliable insights.
• Online directories: Directory listing of software outsourcing solutions can be a great help in finding top agencies in their respective fields. Clutch, DesignRush, G2, The Manifest, and GoodFirms are notable platforms for compiling an initial list of potential partners.
• Google Search: Both paid and organic search results on Google can bring businesses useful insights as long as relevant keywords are entered.

Step 6. Review their portfolios and domain expertise

The next phase is assessing potential outsourced development teams. 

Evaluating past work and portfolios plays a significant role in this process since it gives a tangible demonstration of their capabilities and a clearer understanding of what they can deliver.

4 key aspects to focus on are as follows:

• Range of projects: A diverse portfolio reflects versatility and adaptability. It suggests that the team has navigated various challenges and can likely manage the complexities of the project. However, if the portfolio lacks focus and is overly broad, it may indicate a lack of specialization.
• Industry experience: Consider whether the team has worked in the desired sector before. Prior experience in the same industry means they already understand the specific challenges and needs of the business niche. This can translate to more customized and effective solutions.
• Quality of work: Pay close attention to the quality of their output. Is their code well-structured and efficient? Is the software free of bugs? High-quality work is a strong indication of technical expertise and a commitment to delivering excellence.
• Similar projects: Most importantly, look for completed projects similar to what organizations need. A proven track record of handling similar work suggests they are well-equipped to meet requirements.

It’s worth noting that software outsourcing companies may sometimes be restricted from sharing details of previous projects due to non-disclosure agreements. Nevertheless, they should be able to provide a general overview of their past work, the development processes employed, and the benefits realized by clients.

Step 7. Check their testimonials and references

Client testimonials and references serve as invaluable resources when evaluating prospective partners. They offer firsthand accounts of what it’s like to collaborate with the team, revealing insights that a portfolio may not convey.

When evaluating testimonials, take into account key aspects such as the team’s strengths and weaknesses, their ability to meet deadlines and commitments, adherence to budgets, and the overall satisfaction level of their clients.

If necessary, don’t hesitate to contact previous clients for detailed references regarding specific projects, the team’s management approach, and any setbacks they faced.

Step 8. Assess their communication skills

Effective communication is fundamental to the success of any outsourcing partnership.

3 essential factors to consider when assessing an external team’s communication abilities are:

• Language proficiency: The outsourcing software development company must possess strong relevant language skills.
• Feedback reception: The team should be open to listening and making necessary adjustments based on your input.
• Communication tools and channels: Consider the team’s preferred communication methods and platforms. It’s perfect if their tools are compatible with those of your organization.

Step 9. Evaluate project management capabilities

Checking the project management capabilities of an outsourced development team can give companies insight into how well they can plan, execute, and deliver projects.

Here’s what to review:

• Methodologies: Does the team follow a structured project management methodology such as Agile, Scrum, and Waterfall?
• Progress tracking: How do they monitor the project’s progress? Do they use tools like Jira, Trello, or Asana?
• Project documentation: Do they document the projects well, from project requirements and plans to meeting notes and issues?
• Change management: Do they have a structured change management process? Are they able to adapt to changes without any disruptions?
• Delivery: Do they deliver projects in a timely and consistent manner as promised?

Step 10. Consider their cultural fit

Cultural fit is often an overlooked yet vital component of a successful outsourcing relationship, which encompasses shared values, work ethics, and attitudes.

To have a good understanding of the outsourced development team’s cultural fit, look into their work ethics, values, and approach to work.

In other words, determine if they demonstrate a strong commitment to quality, punctuality, and professionalism. It’s also necessary to check whether their core values, such as integrity and innovation, align with those of organizations. Additionally, review their working style—whether they favor a structured or flexible approach—since a compatible work dynamic can lead to smoother interactions and increased efficiency.

Pro Tip: To gather all the necessary information for selecting the best outsource dedicated software development teams, check out our 12 questions to ask before hiring a software development company.

With the right team in place, businesses are already halfway to success! The remaining task is to effectively manage this outsourced development team. So, here’s a handy checklist to help them navigate this phase smoothly.

8 Tips to Manage an Outsourced Development Team Effectively

• Align the outsourced team with product visions and timelines

Clearly communicate product vision, goals, and timeline to the dedicated outsource web development team.

Regular meetings and detailed briefs help align everyone with the project’s objectives, leading to a more cohesive development process and a successful end product.

• Guarantee intellectual property and quality control with NDAs and SLAs

Protect intellectual property (IP) and guarantee quality control by implementing non-disclosure agreements (NDAs) and service level agreements (SLAs).

NDAs safeguard confidential information, while SLAs establish clear standards for quality and timelines, holding the team accountable.

• Establish clear communication channels

Set up dedicated communication channels, such as email, project management tools, and video conferencing platforms.

Recommended tools for remote work are Trello, Slack, and Zoom.

• Set up a leadership hierarchy and point of contact

Designate a leadership hierarchy within the outsourced team, including a primary point of contact.

This structure clarifies decision-making responsibilities and streamlines communication, making it easier to address issues or changes efficiently.

• Treat outsourced software developers as part of the team

Integrating the outsourced team into the company’s culture and internal processes through regular meetings, company updates, and other team activities helps cultivate a stronger sense of unity and commitment to the project’s success.

• Define and track KPIs

Set specific KPIs to assess the outsourced team’s performance, such as code quality, bug count, deadline adherence, and budget compliance.

• Conduct visits and face-to-face meetings

In addition to regular video calls, organize periodic on-site visits or face-to-face meetings to confirm that the outsourcing team meets project standards.

Direct interactions build trust and allow you to observe their working methods firsthand, guaranteeing compliance to established processes and quality benchmarks.

• Address any cultural differences

Acknowledge and respect cultural differences, especially in offshore outsourcing setups.

Training or awareness sessions can help bridge cultural gaps, improve communication, and enhance overall team cohesion.

Why Build an Outsourced Development Team with LTS Group?

Working with the right outsourcing development company can significantly bolster organizations’ tech capabilities. LTS Group stands out as a top-tier software outsourcing provider, offering a wealth of skilled talent across various domains, including software development, software testing, and many other digital BPO services.

Here’s why selecting LTS Group for outsourced development needs is the smartest choice:

Flexible outsourcing models

We offer a variety of flexible outsourcing software development models, from dedicated teams and staff augmentation to project-based and time-and-material options. This adaptability allows businesses to find the perfect fit for their project requirements and budget.

Comprehensive service offerings

We provide an extensive array of software development outsourcing services. Whether it’s web & mobile app development, software maintenance, or web & mobile app testing, LTS experts have it all.

Broad technology expertise

We leverage the best technologies to deliver exceptional results:

• Web development: HIBERNATE, Java, PHP, AngularJS, .NET, and more
• Mobile development: Flutter, React Native, Xamarin, etc.
• Database management: MySQL, Oracle DB, SQL Server, etc.
• Cloud infrastructure: Microsoft Azure, AWS, Amazon EC2, etc.
• Automation testing: Perfecto Mobile, Soap UI, TestComplete, etc.
• Management tools: Jira, Backlog, HP Quality Center, etc.

Client-centric approach

With over 8 years of experience collaborating with 60+ global businesses, LTS Group understands the nuances of development outsourcing. We’re committed to continuous improvement, actively seeking client feedback through detailed surveys post-project. Such dedication helps us consistently meet and exceed clients’ expectations.

Proven track record

Our competitive pricing, effective communication, and extensive experience in a wide range of development projects empower businesses of all sizes to thrive. Check out our portfolio for more details.

Don’t miss out on the opportunity to partner with a team that values reliability, expertise, and innovation. Contact us today to explore how we can elevate your development projects!

When is the Right Time to Hire Outsource Software Development Team?

A software development outsourcing company can greatly benefit an organization in many different scenarios:

• Filling skill gaps: When there’s a need to fill internal skills or expertise deficiencies without the delays of traditional hiring processes, outsourced teams come in handy to offer the necessary capabilities swiftly.
• Reducing costs: Companies seeking to lower expenses tied to salaries, benefits, and training that come with growing in-house teams often find outsourcing to be a budget-friendly alternative.
• Meeting urgent deadlines: When software projects face urgent timelines, extra manpower may be needed. An outsourced team can provide the required resources to ensure timely delivery.
• Focusing on core functions: When technical tasks begin to overwhelm the internal team, outsourcing allows them to concentrate on core business functions, boosting overall productivity.
• Upgrading MVP development: For businesses with a minimum viable product that requires new features or software testing, an augmented team can bring specialized technical skills and fresh perspectives, which are integral to successful implementation.
• Entering new markets with local expertise: Embarking on a new market often necessitates localized knowledge to adapt products to meet regional demands. An outsourced development team steps in to provide valuable insights into local market trends.

FAQs about Outsourcing Development Team

What is an outsourced development team?

An outsourced development team comprises skilled professionals from a software development company who are hired to execute and oversee software projects, often beyond the primary geographic and operational boundaries of the hiring firm.

Should I outsource software development or handle it in-house? 

The decision to outsource software development team or rely on an in-house team depends on numerous factors, such as budget limitations, project complexity, and resource availability.

If a company’s existing development team lacks the expertise for additional projects, outsourcing can offer access to a global talent pool and specialized skills that expedite development.

On the other hand, smaller projects requiring intensive oversight might benefit from the closer integration that an in-house team provides.

How much does outsourcing developers cost?

The costs of outsourcing software developers can fluctuate based on the geographical location of outsourced team members, project complexity, required expertise level, etc.

Generally, outsourcing to regions with lower living costs—such as Asia, Eastern Europe, and Latin America—can yield substantial savings compared to hiring in-house teams in Western countries.

For example, while hiring a software developer in the U.S. can range from $62 to $209 per hour, a software developer in Southeast Asia typically costs between $18 and $71 per hour. In fact, companies in developed countries may save between 30% and 70% by outsourcing to developing nations like Vietnam.

What to look for in outsourced development teams?

When evaluating potential partners providing outsource custom software development services, businesses should prioritize technical expertise, a strong portfolio, positive client testimonials, effective communication, solid project management practices, and cultural compatibility. Additionally, it’s essential to consider their security measures and capacity to scale as project demands evolve.

Final Thoughts about Outsourcing Development Team

Outsourcing software development services has become the new norm. By collaborating with the right outsourced development team, organizations can tap into a global talent pool, reduce costs, speed up time-to-market, etc.

To select the right partner, clearly define the outsourcing project, choose the appropriate software outsourcing model, establish a budget, decide on the geographical strategy, and evaluate potential teams by reviewing their portfolios, expertise, testimonials, communication skills, and cultural fit.

As for tips to effectively manage outsourced teams, make sure they grasp product visions and timelines, secure intellectual property and quality control with NDAs and SLAs, establish clear communication channels, set up a leadership hierarchy, treat them as internal staff, define KPIs, organize visits, and address cultural differences.

Ready to outsource development team with ease? LTS Group is here to help. Contact us for a free consultation.

Website: https://ltsgroup.tech/

Tel: (+84) 96-238-7474

Linkedin: https://www.linkedin.com/company/lts-group-vietnam/