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Outsourcing Challenges Part 2: Offshore Software Development Team Structure

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Outsourced software development allows organizations to execute software development projects while reducing overall costs. Depending on the project or organization, different types of outsourced teams exist to help execute specific software development functions. Сhoosing correct software development team structure will help you ensure costly mistakes or miscommunication is avoided in the long-term.

In the first edition of our Outsourcing challenges blog series, we covered the essential aspects which combined make up a methodology for hiring a top-performing software development team. Missed it? You are welcome to check it out:

Offshore Outsourcing Challenges Part 1: How to Hire an Effective Team

In this blog we'll take a deeper dive into the topic of the offshore software development team composition. Read on for some tips and best practices for structuring your team.

What is an offshore development team?

An offshore development team is a smart choice for businesses looking to reduce in-house development costs, streamline operations, and flexibly scale development needs. Taking full advantage of the knowledge and experience of an outsourced team allows organizations to boost their development capabilities, meet challenging deadlines more cost-effectively and even reduce resourcing costs by up to 50%. Read our blog post analysing offshore vs nearshore outsourcing to help you pick a seamless collaborative model.

GSA’s 2020 Outsourcing Report identified four key benefits of hiring an outsourced development team: significantly reduced IT costs, higher operational efficiency, flexible scalability, and access to developers with domain expertise or highly-specialized skills. Taken together, an outsourced development team makes it possible to build world-class solutions that faster, cheaper, and more capable.

Organizations that take advantage of outsourced development tend to use of one of three engagement models:

  • Outstaffing. The outstaffing software development team structure includes additional staff members or “smart teams” to assist with development. This model may include staff argumentation, which adds an additional dedicated team to a full development center.
  • Product development. A fully-outsourced software development team structure, the product development model is a fixed-bid development project based on set requirements. Addressing the development of a specific application, solution, or a full Product Development Services 2.0 (PDS 2.0) project, the product development model fulfills a client’s particular need and delivers a custom solution.
  • Research and development. Focused on innovation, an outsourced R&D model determines the plausibility of investment in emerging technologies in comparison to the current state of the technology market. Typically including a technical feasibility study and proof-of-concept development, the outsourced R&D software development team structure aims to reduce technological uncertainty and guarantee clients have full confidence in their investment in an innovative technology solution.
Engagement models breakdown
outsourcing engagement models

How to best organise a software team?

What is an optimal combination of team members in a software development team? Outsourced development teams are structured to meet the company's particular needs. Optimal team composition is the one that allows to successfully deliver even the most complex project requirements within your timeframe and budget. You can come across these definitions of team structures:

  • Generalist teams, which contain a broad range of expertise and typically carry out end-to-end project development.
  • Specialist teams, which focus on projects that require a particular subject matter or technology expertise.
  • Hybrid teams, which contain a mix of generalists and specialists.

Your engineering team can be comprised of front-end developers, back-end developers, full-stack developers, mobile developers, desktop developers, data engineers, DevOps engineers, software architects, information developers (technical writers), support engineers, manual test engineers, automation test engineers, product designers, business analysts, scrum masters, etc. If you are looking to ramp up development capacity a generalist model may make sense, while disruptive changes could opt for a specialist team that can implement the latest technology innovations.

How to best organize a software team that supports several projects?

The answer depends on the complexity and specifics of the project. Often one manager can be enough to oversee several small projects. In contrast, a large-scale software project will most likely require a dedicated project manager to ensure everything goes smoothly and your requirements are delivered on time, on budget, and on value.

Here's an example of an offshore outsourcing software development team structure
software development team structure

What are some best practices for composing an offshore software development team?

Outsourced software development teams can fail when specific objectives, practices, and communication methods are not established. Here are some key aspects of assembling a successful outsourced development team:

  • Execute an extensive vendor selection process. Determining the best vendor for your offshore software development team should be a comprehensive process. Without taking the proper time to evaluate the services and key differences between service providers, an organization can establish a long-term relationship with a provider that does not meet its needs.
  • Define specific objectives and build a roadmap for execution. Whether a company seeks better scalability, faster time-to-market, or additional resources to execute a specific project, an organization must understand the purpose behind selecting an outsourced development partner. Determining key reasons for outsourcing will set up an external software development team for success, making it possible to accurately assess project progress and ensure business objectives are achieved.
  • Determine responsibility distribution and ownership. Based on the specific engagement model, outsourced development teams can take full control of a project or leave its responsibility in-house. No matter the case, stakeholders must be able to communicate, accept deliverables, and make key decisions.
  • Establish goals and manage risks. Prior to the start of development, determine each of the vendor’s necessary objectives to ensure proper planning. Identifying potential risks, budgeting for contingencies, and vetting a vendor’s security controls can prevent future problems from arising throughout the development process.
  • Set up a proper communications process. Companies and vendors may have different communication preferences. Whether a business is hands-off or wants to be deeply involved in decision-making, define a communication plan detailing all of the necessary meetings, demos, and reports.

For nearly three decades, ELEKS has been a trusted software partner for Fortune 500 companies, large enterprises, and startups. Providing a wide range of outsourced software development services, ELEKS’ custom software development model ensures successful outcomes from innovation to maintenance.

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