Best Practices for Setting Up and Managing an Offshore Development Center

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Offshore Development Center
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Businesses are scaling rapidly in today’s time, hence staying ahead of the competition requires more efficiency, constant innovation, and cost-effective decisions. One of the major contributors that fuel this rapid growth is technological advancement. And to gain the best technological advantage, companies are turning towards Offshore Development Centers.

What are Offshore Development Centers?

Offshore Development Center is a dedicated facility in a different country that acts as an extension of a company’s IT team. ODCs can increase your overall productivity, provide access to specialized skills, and improve time to market.

Benefits of Setting up an ODC

  • Cost Optimization
  • Access to Skilled Talent
  • Scalability and Flexibility
  • Faster Time to Market
  • Global Collaboration
  • Access to the Latest Skills and Technologies
  • Industry-Specific Experience
  • Round-the-clock Productivity
  • Resilience to Market Changes
  • Efficient Risk Mitigation

However, to avail yourself of all these benefits, you need to know how to properly set up and manage your offshore development center, which can be challenging and complex without proper guidance. Hence, we are going to discuss the best practices for setting up and managing an offshore development center in this blog to help you set up your ODC efficiently.

Best Practices for Setting up and Managing Offshore Development Centers

Now that we understand the many benefits of setting up an ODC let’s go ahead and check the best practices and things to keep in mind when setting up and managing your offshore team.

Creating a strategic offshoring plan

You need to have a well-defined and comprehensive strategic plan to ensure the success of your ODC efforts. You should have a clear idea of your offshore development center’s expected goals and objectives. Start by identifying the projects or tasks your offshore team will undertake and the required skills you’d need to complete those tasks. Also, conduct a proper risk-to-benefit assessment and consider the potential pros and cons of going for an offshore development model. Having this clarity makes the rest of the process much easier.

Choosing the right offshoring location

Where you choose your offshore development center can make a significant impact on the overall impact of your ODC efforts. Some important things to look for when selecting the correct ODC country are – the availability of a skilled workforce, political stability, cultural alignment, and legal & compliance considerations. Conduct proper research and analyze each option with your offshoring strategic plan to find the best-fitted offshore development country for your project. Most companies prefer setting up their offshore development center in India due to their large talent pool and proficiency in English.

Choosing the right ODC partner

After narrowing down the preferred ODC country, you need to narrow down to the top ODC centers in that country per your project requirements. Now to find the offshore development center that fulfills all your requirements or is a close fit compared to others, you should compare them based on track record, relevant industry experience, domain expertise, and other factors.

Apart from technical skills, you should also ensure they have proper communication skills and cultural understanding. Make sure to be thorough in your screening process by cross-referencing and seeking client references.

Choosing the Right Offshore Talents

You managed to find the correct country and vendor; now, all you need to do is hire the right talents from that vendor to ensure your ODC team is strictly as intended and most efficient for your project’s success. Be constantly in communication with the offshore vendor to implement a proper recruitment process with a core focus on technical expertise, communication skills, development experience, and other factors.

Establish Seamless Communication

Since your ODC team will be miles away from your location, you need to leverage technology and effective communication channels to ensure efficient and reliable communication links. This means conducting video conferences and virtual meetings using instant messaging, collaborative platforms, and project management tools.

Quality Assurance and Testing

One of the most important things for managing your offshore development center is to set up proper quality assurance and testing practices and procedures by conducting code audits and adhering to industry-standard quality practices. Proper quality testing reduces the chances of error and guarantees reliable software solutions.

Data Security and IP Protection

Working with offshore teams comes with the risk of exposing sensitive business secrets in an uncontrolled environment. Hence, it is important to set up proper data security guidelines by signing non-disclosure agreements and implementing data protection measures. You should also conduct frequent security audits to comply with relevant regulations.

Performance Evaluation and Room for Improvement

Conducting periodic performance evaluations will help keep the offshore team on their toes and more aware of their performance which can then be fine-tuned or corrected. You must build or request your offshore vendor to build a KPI – Key Performance Indicators document for your offshore talents. Measure and evaluate their performance against their KPIs and identify where to improve. If someone makes an outstanding contribution, reward them and recognize them to boost team morale and motivation.

Cultivating Camaraderie Amongst Team Members

One of the biggest hurdles of an offshore team with an in-house team is that they need to get a chance to engage in a non-professional setting or have opportunities for team bonding. Team-building activities are essential to ensure cohesion in the team. You should conduct virtual team-building activities or arrange in-person trips where all members meet and communicate with each other. Such efforts would greatly pay towards an overall collaborative and positive work environment.

Dealing with Time Zone Differences

Time zone difference is an inevitable by-product of offshore development. It has its perks, but it also has its perils. You can leverage the time-zone difference for round-the-clock productivity and faster project turnaround time. However, doing so would lead to no link between the internal and extended teams, leading to conflicts, confusion, and delayed decisions.

You can strategically place an overlapping working hour structure that would help establish real-time communication and give you more productive hours than an in-house team.

Prioritize Knowledge Transfer

Having access to skilled experts through offshore developers is excellent, but it also causes an overdependency on them to fulfill your project successfully. If, in such a situation, for any reason, the offshore team pulls back or you feel it needs to serve your purpose, you’d lose out on all the technical advantage they brought to the project.

To avoid such a situation, you should always prioritize getting proper documentation, best practices and coding standards to be centrally available to all team members. You should also conduct regular knowledge-sharing sessions, seminars, and other educative initiatives to ensure all developers are better equipped to handle the challenge.

Final Words

Setting up and maintaining an ODC is a hefty task. However, if you plan the entire effort properly and choose a reliable offshore development center to get your dedicated development team, your vendor will handle most of these hassles themselves. Make sure to be still vigilant and actively participate in the process to get the most benefits out of your offshoring efforts.