The key to outsourcing success is finding an offshore software development team that has enough engineering capacities and experience to help you meet your specific business problems. But how do you find the right one that has the tech and domain expertise you need, fits your budget, and which you can rely on?

To help you, we’ve compiled a guide on how to find, hire and successfully manage an offshore development team. It covers such aspects as what outsourcing destination to choose, how to select the best offshore development partner, what legal questions to consider, and how to work with your remote team.

WHY HIRE AN OFFSHORE DEVELOPMENT TEAM

Setting up an in-house software development team is a challenging task. It requires a lot of time, effort and overhead costs to hire the experts you need and to manage them. That’s why so many businesses choose to focus on their core business functions and delegate software engineering to an offshore development team.

Here are just a few reasons why you will benefit from hiring offshore developers:

1. You can tap into best talent across the globe and are not limited by location;
2. Partnering with an offshore development team makes the implementation of new technologies easieras vendors usually have versatile expertise and a large pool of specialists;
3. Alleviated HR, administration, and infrastructure pain;
4. You can build your offshore development team according to your business needs and can scale it down or up whenever you need it;
5. You can choose different types of cooperation ( extended team, managed team, outsourced team) depending on the level of control and supervision you want to keep.
6. Teams of offshore dedicated developers are fully committed to your project and act as units attached to your existing onshore teams;

The benefits of such a partnership are tempting. However, you have to consider a few aspects to find, hire and establish successful cooperation with an offshore development team. So, let’s begin with choosing the most suitable outsourcing destination.

WHERE TO FIND AN OFFSHORE DEVELOPMENT TEAM

Usually, businesses choose outsourcing destinations taking into account the geographical location, billing rates, cultural compatibility, and time zone difference. According to these criteria, Eastern Europe, Latin America, and Asia are known as the hottest spots to find offshore software developers.

Where to hire offshore developers: Eastern Europe

This region has a well-deserved reputation of a reliable IT outsourcing destination thanks to its growing talent pool, cost-effectiveness, and the constant growth of the IT industry.

Ukraine, Poland, Belarus, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Moldova, and Romania are the top Eastern European outsourcing destinations. The number of software developers in the region surpasses 1,051,000 experts with over 50K ICT graduates entering the market every year. The two countries with the most significant number of professional developers are Ukraine and Poland. Whereas, Ukraine has the largest number of offshore development companies in the region (1,600 ), followed by Poland ( 500+), Bulgaria (500), and Belarus (500).

Many influential sources have placed Ukraine among the top software development outsourcing locations: the PwC report, the Statista research, the A.T. Kearney research, etc. Moreover, the country was recognized by Gartner’s top 30 offshoring and outsourcing destinations in Europe. Businesses worldwide can benefit from the talent pool of more than 180, 000 software developers.

Where to hire offshore developers: Latin America

Brazil, Argentina, and Mexico are the best outsourcing countries by the number of professional developers in the region. However, Chile has made it to the 27th place in the HackerRank rating of the most skilled developers in the world.

Where to hire offshore developers: Asia

Asia houses almost 4M software developers. India, China, and the Philippines are the countries with the most significant number of professional developers. The numbers are 2.75M in India, 590K in China, and 190K in the Philippines.

HOW TO FIND THE BEST OFFSHORE DEVELOPMENT PROVIDER

Your business success depends on who you choose to work with. So, here are some steps which will help you to make the right decision:

1. Compile a long list of offshore development companies you will review in terms of their services quality, expertise, and security standards.
2. Take into account the reviews, references, success stories, video testimonials of the vendors you consider as potential partners. You can find this information on their websites, LinkedIn accounts, ranking platforms (Clutch, Manifest,Goodfirms, etc.);
3. Consider the size of the vendors and their recruitment capabilities, as mid-size and large providers are more likely to have resources you need internally than smaller companies;
4. Opt for the vendor that has a powerful employer brand and provide opportunities for professional growth. This way, the company will be able to find experts for the project promptly and scale up teams quickly.
5. Look for a company that has a solid experience in building dedicated teams that deliver software products similar to yours, preferably in your industry;
6. Pay attention to administrative facilities, equipment, and other infrastructure of your potential partner;
7. Make sure your potential outsourcing provider complies with international security standards such as ISO, PCI, HIPAA, and has an effective security policy;
8. Ask your potential vendor these questions to be sure that the provider is reliable.
9. Assess their level of communication and enthusiasm. Choose the vendor that takes effort to understand your business needs, sets up extra calls with you and sends you follow-ups. The eagerness of a vendor to clarify with you all the aspects and nuances ensures the success of your partnership in the long run.

HOW TO SIGN A WIN-WIN CONTRACT WITH YOUR OFFSHORE DEVELOPMENT COMPANY

So, you have chosen the vendor that suits all your requirements, and you start the negotiation process. Signing a contract is the next step to cooperation with the best offshore developers. There are, however, different types of contracts, based on three cooperation models: dedicated development team, time & material, and fixed price. You have to understand their peculiarities to choose the one you will benefit the most from.

Fixed price contracts are the best option for small and medium projects with clear requirements. Let’s say, you have a certain budget but not enough capacity to do it in-house. So, you fully entrust the project to the vendor that bears all the responsibility of the project’s success. This is, however, the least flexible model, as any changes in the project plan require the complex change-approval process.

In a case with a dedicated development team model, you hire offshore developers entirely focused on the project. You can either take part in team management or entrust it to the vendor. This model is highly flexible and leads to the most viable results.

T&M model is usually used when a client needs an expert on a project temporarily. For instance, if you need the expertise of a DevOps engineer on demand, it doesn’t make sense to allocate these specialists full-time, because it will lead to unnecessary expenses. So it is more effective to pay these experts only for the work done.

No matter which type of contract you choose, there are some vital aspects to heed on to avoid risks:

1. Defined strict deadlines for issuing an invoice and invoice payment and the outlined consequences for missing payments;
2. Liability clauses which define clear limits of responsibility for both parties;
3. Warranty clauses which guarantee the certain quality of provided services;
4. Notice periods – time frames associated with the project kick-off as well as scaling up and scaling down a team. Vague notice periods or their absence can affect project execution and delivery
5. Data protection rules, namely the deidentification, reidentification, and anonymization of data;
6. Client’s ownership of the code, when it is delivered and paid for;
7. Agreeing on the law of which country will be governing if the contract is international.

Now, we are moving towards the next step – how to establish successful cooperation with your offshore development team.

HOW TO PARTNER WITH AN OFFSHORE DEVELOPMENT TEAM

Successful knowledge sharing

Don’t underestimate the importance of knowledge transfer. Unshared knowledge costs money, especially when we are talking about IT outsourcing projects. Knowledge loss could result in lots of organizational waste when the whole process gets reworked from scratch.

There are two types of knowledge transfer flows: from a client to a vendor, or from a previous vendor to a new vendor. No matter which case is yours – the knowledge transfer plan stays the same. It all starts with a demo and the investigation and ends with setting up the environments, taking over business-as-usual, and the first successful release.

The successful knowledge transfer in IT outsourcing is about people, processes, and a product. The vendor has to understand what the product does, how it operates, and what people are responsible for specific tasks, to deliver on the client’s expectations. So, choose the vendor that has a robust knowledge transfer plan. It will make the entire journey smooth and safe.

Building effective communication

The more effective your communication with your offshore developers is – the more successful your collaboration will be. But to avoid misunderstandings and unmet expectations from both sides, be ready to create an effective working environment.

There are some ground rules which are vital for fruitful cooperation with offshore developers. The unification of coding practices within the team, establishing channels of communication, promoting knowledge transfer among developers are some of them.

Here are key tools that will help you to communicate with your offshore development team efficiently.

WORKING WITH AN OFFSHORE DEVELOPMENT TEAM: SUCCESS STORIES

There are many large tech companies and enterprises that have successfully hired offshore developers, shaped strategic partnerships with them and benefited from the cooperation. Here are a few examples:

1.Lebara

Lebara is a global telecom that has shaped a long-term partnership with N-iX. Our software engineers have helped Lebara with software development, quality assurance, database administration, application and infrastructure support, and more. We set up an offshore development center for Lebara (100 + experts) and worked on such products as LebaraPlay, MyLebara, LebaraMoney, Bluepipe, and others.

2. Currencycloud

Currencycloud is a global payment platform that enables companies to send and receive cross-border payments all around the world. The company started an ongoing partnership with N-iX in 2013. Our development team has worked on migration to microservices, enhancing the functionality of the platform, including APIs, core banking and payment services, customer-facing features, and more.

3. Fluke

Fluke Corporation is a world leader in the manufacturing industry and a global producer of electronic equipment. N-iX offshore development team has been working with the company on developing enterprise automation solutions. The products are used by such leading companies as Honda North America, Toyota UK, Volkswagen, and many others.

These are just several instances of global businesses that have decided to hire offshore software developers and enjoyed the results.

WRAP-UP

A lot of businesses hire offshore developers to fill the skill gap, boost their capabilities and bring their products to market faster. Despite a thorny way of finding the offshore development team, it is worth the struggle.

However, there are some crucial aspects you have to pay attention to know that a particular vendor is a reliable partner.

Step one: choose the outsourcing destination which is culturally and (or) geographically close to your country;

Step two: research the companies in the chosen region, regarding their track record, expertise, and security issues;

Step three: sign a contract that will cover all of the possible issues and nuances of the future collaboration: financial side, the quality of the services, etc.;

Step four: establish effective communication with your offshore software development team and share all the needed information with them  to make sure that you are on the same page;

Step five: scale a team up or down, according to your business needs;

Step six: deliver a reliable and secure product in cooperation with your offshore developers.

If you have any questions on how to find and build a successful offshore development team, please drop us a line. We’ll be happy to help you.

Ukraine is celebrated for the second-largest engineering talent pool in Eastern Europe (192,100 IT professionals in 2019). And while some companies struggle to scale their team in-house and onshore, others decide to opt for team augmentation in Ukraine. Does it mean that it offers easier recruitment and a more attractive value-for-money ratio? Let’s take a look at the facts:

• Ukraine (2.9) has better financial attractiveness than India (2.82), China (1.88), Poland (2.05), according to the 2019 Kearney Global Services Location Index.
• Ukraine is home to 1600 + IT outsourcing companies. It takes the lead in Eastern Europe, followed by Poland (500+), Bulgaria (500) and Belarus (500).
• Such tech leaders as Microsoft, Mercedez, Siemens, and others have chosen Ukraine for augmenting their engineering teams and benefited from it.

So if you decide to expand your in-house software development capabilities, Ukraine is a viable option and a proven destination for offshore or nearshore staff augmentation.

However, selecting the vendor that provides  IT staff augmentation services in Ukraine and meets your specific criteria is not an easy task. One may get lost in a variety of choices as the vendor landscape is vast and diverse. If you want to have a reliable offshore or nearshore staff augmentation partner by your side, avoid these common mistakes along the way.

#1 Not assessing a vendor’s capacity to gather a team

Many companies offer team augmentation services in Ukraine. Yet, a few of them can boast about a powerful employer brand. In fact, this criterion defines the vendor’s possibility to find software developers for the project promptly as well as its capacity to scale up a team. For businesses that want to accelerate the software development process, it is critical to have such issues resolved within the defined time frame.

So before partnering with a provider, find out whether the company cares about its employees, provides opportunities for professional growth, supports the local IT community, and launches social and educational initiatives.

In Ukraine, tech companies compete for the title of the best employer every year. They apply different strategies to improve employee satisfaction and increase retention rates. Some of them offer great working conditions and decent compensation, others provide mentorship programs, regular performance reviews, real-time feedback, and a clear career advancement roadmap. According to the latest employer rating conducted by DOU, N-iX is ranked among the top 5 best employers in the category of 800-1,500 IT specialists.

#2 Overlooking notice periods in the contract

The next important thing companies usually underestimate is notice periods. Vague notice periods or their absence in the contract can affect the project execution and delivery.

Thus, you should agree with a vendor on the reasonable time frames associated with the project kick-off as well as ramping up and ramping down a team of outsourced developers.

#3 Neglecting the value of the knowledge transfer process

Much of the project knowledge exists in the documentation, but the most valuable knowledge still comes from the person’s experience and insider learning. And if it is not shared across distributed software development teams properly, you can suffer lots of organizational waste when the whole process gets reworked from scratch. It is important to find a team augmentation vendor in Ukraine that will be able to establish an effective knowledge transfer process between the client’s teams.

To avoid duplicating other people’s work, software developers should regularly exchange some well-established workflows and align coding practices. There should be a culture of knowledge-sharing on a project, both in a formal and a learn-at-lunch mode. This could be done not only via documentation but also via regular Q&A sessions, live training, one-one meetings, tech talks, coffee breaks, etc.

#4 Choosing the wrong cooperation model

If you don’t choose the right pricing model for your project, your software development budget could suffer significantly. For example, if you need an expert on a temporary basis on a project (a UX designer, a DevOps engineer, or a Solution Architect), it doesn’t make sense to allocate these specialists under the dedicated development team model on full-time. It is more effective to engage these experts part-time and pay only for the work done based on the hourly rate of an IT specialist. It is crucial to opt for the software development partner that can offer different cooperation models to you and help you choose the one that you will benefit the most from.

Depending on the size of the project, team composition, your requirements, budget, etc., you may choose from the fixed price, T&M, or dedicated development team models. As you can see, the fixed price model is the least flexible but works best for small and medium projects with clearly defined requirements. T&M model is applied when a client needs an expert on a temporary basis on a project. A dedicated development team model is highly flexible and fully adaptable to any changes. So when looking for a team augmentation vendor in Ukraine, make sure they can offer you the best cooperation model that suits your business needs.

#5 Paying little attention to the vendor’s reputation

What do you pay attention to when making a list of nearshore staff augmentation vendors? You probably assess the company size, its location, services, and expertise it offers as well as key clients. This is something that you can easily find on the company’s website. But what about the vendor’s reputation? The best way to find out true information about vendors is to ask a reference from their clients, watch video testimonials, and evaluate their profiles on popular B2B rating platforms, which feature verified clients’ reviews.

A STEP-BY-STEP GUIDE ON TEAM AUGMENTATION IN UKRAINE

1. Make a long list of companies

The first step to successfully select the vendor is to do preliminary research and explore the IT industry dynamics in the region and the key market players. Local media influencers like DOU, MC Today, Liga Tech, IT ID Lviv, Business Ukraine, AIN, NV Techno, etc. as well as IT market reports made by regional IT clusters can help you dive into the Ukrainian software development industry. Also, you can easily find popular vendor’s listing by Clutch, GoodFirms, TopDevelopers on the Internet and take them as the basis for your further research.

2. Set up clear selection criteria

No one ever partners with a software development provider without reviewing carefully its services, expertise, client portfolio, and references. Little attention, however, companies pay to such criteria as the company’s culture, agility, and employer brand, which in fact are decisive in building a successful partnership. Please take into account these several important criteria when looking for a trusted team augmentation vendor in Ukraine.

3. Make a shortlist of companies

On the basis of the criteria above, you need to weed out those IT vendors that do not qualify. As a result, you will get just several companies on the list, which makes it easier to study them closer.

This may come as a surprise but please note that large-scale companies may not give your project enough value as they hunt for developing industry solutions, whereas small-scale companies may not have enough software development capabilities to support your project. So if you want to augment your team in Ukraine, it’s better to focus on mid-sized companies ( around 1,000 – 1, 500 employees).

4. Design a detailed company profile

At this stage, it is important to reach out to these companies and send them a document with a number of questions related to the company, its people, and operations. This will help you objectively assess the candidates and streamline your decision-making process. The key criteria to assess are communication, training acceptance, CSR, knowledge transfer & exit process, tech infrastructure & office facilities.

5. Negotiate a win-win contract

Signing a contract is the final step on this vendor selection journey. In the world of IT outsourcing, it heavily depends on the type of cooperation model you choose. A poorly assembled contract may affect your business leading to unexpected outsourcing bills, loss of control over the quality, or compromised information security. To avoid such risks, both parties should thoroughly negotiate an IT outsourcing agreement paying special attention to such aspects as payment terms, liability, notice periods, confidentiality, IP rights, non-solicitation terms, the governing law, and a forum for dispute resolution.

Benefits of nearshore staff augmentation with N-iX

If you want to find a reliable company that offers quality IT staff augmentation services in Ukraine, you should do comprehensive research. The overall number of software development staff augmentation companies is growing every year. So choosing a trusted partner becomes a challenging task. Here are a few simple reasons to consider including N-iX on your list of the top team augmentation providers in Ukraine.

1. N-iX has the reputation of a trusted IT vendor. We are recognized among the top companies by IAOP, GSA, Inc. 5000, Software 500, Clutch.co, and others.

2. We provide IT team augmentation services to well-known companies around the globe. N-iX partners with Lebara, Currencycloud, GoGo, Travelport, Deutsche Post, Fluke Corporation, HotSchedules, Vable, Origin Enterprises, and many others.

3. N-iX has delivery centers in Ukraine, Poland, Belarus, and Bulgaria, which allows us to access a pool of over 570,000 professional developers with diverse expertise across finance, retail, healthcare, education, telecom, and automotive industries.