How to Manage an Offshore Development Team in Your Startup

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As information technology and software development become more complex, more and more businesses are hiring offshore development teams to assist with tasks to streamline processes and to save costs. Hiring an offshore development team can be hard and managing software development is complicated and comes with its own unique challenges, however, with the right coordination and management, businesses can enjoy many benefits thereof.

Once a business decides to employ an offshore team, it is important to have an organized structure right from the start to avoid complications in the development process. With the right steps in place, managing offshore teams should be uncomplicated and highly beneficial.

The role of the project manager

Every year, businesses invest large sums of money in projects to develop new applications and systems. Often the most effective and affordable way to do this is to hire an offshore development team. In certain cases, however, these development teams fail to deliver on certain goals and results. This is why it is important to have certain management procedures in place before hiring an offshore team.

The first step in offshore team management is to hire an IT project manager. There are many reasons why a development or IT project can fail and it is the project manager’s responsibility to ensure that strategic processes and plans are in place to avoid any pitfalls. A project manager should have excellent planning, problem-solving, coordination and team managing skills. Hiring an expert and competent manager will have you reap the benefits of your project in no time.

The project manager should have the following in place to ensure a seamless journey:

  • Have a clear vision and mission
  • Provide a detailed roadmap
  • Set milestones and create a timeline for it to be completed
  • Plan and coordinating every step in the process
  • Ensure that the steps are recorded
  • Identify potential pitfalls and risks
  • Keep work on track
  • Ensure that the project is completed within the budget
  • Evaluate the project once it is finished

The project manager plays a vital role and this position should not be overlooked.

How offshore software development business models work

When deciding to hire an offshore team, it is important to understand the different offshore software development, business models. Once you have identified your requirements, you can start searching for the ideal team.

The first aspect to consider is the amount of control the business has over the work performed by the team. The forms of cooperation in the business models are classified as:

  • Complete outsourcing
  • Low-level outsourcing
  • High-level outsourcing

When it comes to payment, the offshore software development business models have the following billing terms:

  • Dedicated resource hiring model
  • Time & Material model
  • Fixed-cost model

Another aspect to consider is the hiring period:

  • Long-term-based
  • Project-based

Once you know exactly what your requirements are, a decision can be made around which offshore development team business model to consider.

8 tips to effectively coordinate while managing an offshore development team

Create and share a vision with the entire team

An essential step in working with software development teams, especially offshore teams, is to create a clear vision. This vision is like the end-goal or the “big picture”, and everyone must know what the vision is and what needs to be done to make the vision a reality. For example, if you are launching a mobile application project and you are using an offshore team, it’s essential to share your vision of exactly what you imagine the application to be with everyone involved. This will assist with smart choices along the journey and a successful outcome.

Set your expectations with every step

When you set your expectations early on in the journey, everyone will know exactly what is expected with every step. For example, during a large software development project, set smaller goals and deadlines to ensure no one loses track. Remember that small victories can be celebrated to show appreciation and to motivate individuals.


Working with offshore teams entails proper and thorough communication often. Unlike working with in-house employees, an offshore team is not on-site and do not always have all the information needed to follow the development process. This is why you need to communicate precisely and as often as you can. Proper communication will avoid your team from being left in the dark and making mistakes along the way.

When working on a software development project over a long period, engage with everyone daily to ensure everyone stays in the loop constantly.

Create a schedule

Working with an offshore team can be difficult when you are all working in different time zones. For example, the business can be based in Europe, but the offshore team is based in the Philippines – that’s a six-hour difference. To avoid this challenge, you need to have a detailed scheduled worked out before starting with the project.

Make communication easy

Even if you have excellent communication skills, communicating with an offshore team can still be complicated. Before you kick off your project, make sure that you have proper channels in place to communicate effectively. Luckily, today many tools can be used to streamline and simplify communication. These include video-call applications such as Skype, as well as group chat apps such as Slack.

Remember that if you are working with an offshore team, it’s also important to keep your communication simple: Avoid difficult vocabulary, complex metaphors, and references that may get lost in translation.

So keep in mind, when you hire a developer, they should give you as much advice as you need in order to have fluent communication and efficient development times.

Do not micromanage

Nobody wants to be micromanaged, especially not experienced developers. You may feel like you want to manage smaller parts of the process, but this will create a lot of frustration. When working with a large team, it is better to hire a senior developer that can assist with managing tasks and to act as a leader. Strong leadership will keep the team on the right track throughout the process.

Ask to put automatic processes in place

Often offshore teams may only be available for a certain period. It is, therefore, important to ask the team to put certain processes in place. For example, should the offshore team finish the project and issues arise thereafter, your own team can manage tasks and troubleshoot with ease in the future.

Treat the offshore team as part of your own team

An offshore team may be working remotely, but for the duration of your project, they should feel like they are part of your own team. For example, share with them your business’ culture, values, mission and vision and allow them to ask as many questions about your business as possible. This will make them feel welcome, even from far away.

Bottom line

Hiring and working with an offshore development team requires a certain level of management to ensure an effective and efficient working relationship. Hiring an offshore team shouldn’t always be a quick way to save costs, but a productive and constructive way to ensure quality software development. If done right, it can be highly beneficial for both parties.

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Adam Tanton

Adam Tanton

Adam is a partner in B2BNN with over 15 years experience in the enterprise technology field.