India is currently at #63 worldwide in ease of doing business and this is improving consistently. India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships. Numerous foreign companies are setting up their facilities in India on account of various government initiatives like Make in India and Digital India. But, for an outsider to setup an offshore team in India could be a daunting task if they don’t know how to go about setting up things. Below are pointers to consider when setting up an offshore team in India.
Employing a Software Engineer or Full stack developer in London, Singapore, New York, Sydney or any other major cities comes at a heavy cost. Not to mention the escalating costs of Rent, maintenance, Infrastructure, perks, benefits and various local taxes. Due to these ever-increasing costs many businesses are looking to set-up an offshore team in India or other countries where talent is available and not very expensive to offset their cost of growing their businesses. Access to a wider pool of skilled talent and cost-effective rates compared to other western countries are few reasons for companies to set up offshore centres in India.
Building a successful offshore team can be very beneficial for any product company or a technology-based start-up, below are few benefits mentioned:
- An offshore team enables timely development of projects since the team works under a fully optimized environment & use streamlined processes in their projects.
- It reduces the total costs on infrastructure. The company doesn’t need to continue spending on utilities, equipment, and facilities since this is already set within the offshore development centre.
- There is continuous technical support and knowledge preservation which is usually obtained during the lifecycle of the project.
Before setting up an Offshore team there are a few things to consider and be aware about. We have compiled 5 key learnings to help you make the transition from an inhouse team to fully functional offshore Development with ease.
1. Choose the right offshore development partner:
- Identifying the right partner: Identifying and partnering with the right ODC is crucial because after partnering you may only meet once or twice a year. You need someone with Integrity, Transparency and someone whom you can trust. This means that establishing a meaningful connection is very important, managing their activities & making sure they deliver what was promised and agreed. Their role is to ensure that they build an ideal offshore team and take care of all the administration activities while you focus on the core competencies of the business.
- Evaluate Portfolio of the partner: By analysing their portfolio, you get an idea of their ability to solve problems and deliver the desired results. This also lets you know that they are legitimate so you can progress talks. Look for demonstrable expertise, portfolios, case studies, and client reviews matter.
- Evaluate Cost Effectiveness: Cost is always driven by the expertise the individual or team has in the topic. Talk to multiple vendors, make a list of questions to ask, get quotes from multiple partners and check their portfolios to assess the best among them who can perform the job better. A cheap quote is not always good quality, therefore, check their knowledge on tech stack and their approach to a problem.
- Pre-Screening of the partner: Reading online reviews of customers and clients will give you an idea of service a vendor may deliver. Before confirming to go ahead, asking for reference from an existing client is a good practise and safe. Also, check if the company has a phone number listed in public pages which will give more confidence in the vendor.
- Explore various Possible Business Models: There are many business models to set-up an ODC.
i. Project outsourced to a vendor.
ii. B O T – BUILD OPERATE TRANSFER.
iii. Setting up a captive with someone managing it for time being till it is to be transferred to the parent company.
2. Follow a bulletproof process to build your offshore team
- Interview & Assess the Partner – The partner should have the necessary technology expertise and should have enough years of experience in the same. Interviewing the partner with challenging questions and references from customers should be part of this assessment.
- Hire a Manager / Team lead – It is difficult and challenging to shadow the partner to know the delivery of work, if it’s happening within the stipulated time or exceeding? Hiring a manager or someone to shadow the partner will expedite work without the doubt of work being completed properly and on time.
- Outsource the non-core activities – By outsourcing the non-core activities the company can focus on core activities, improve product, sales etc to penetrate the market to get a bigger share. Trying to perform non-core activities will lead to increase in headcount and cost with the work delivered being average which is a disaster.
3. Start with Smaller Engagements with the partner & Build your way up:
It’s always a good idea to start the project with a small engagement. This is mainly done to familiarize and understand the process of the partner & if it works for your team. Keep your communication simple by using common language statements (without the use of metaphors, vocabularies, and references to your culture). Though your partner understands the cultural differences, this would be a testing time to see if they are adaptable to your culture and style of working.
This will also help you to better understand the quality of the work being done, skillsets of the developers, professionalism, work ethics, and attitude of the team members.
4. Leverage communication & Reporting Tools & Documentation:
After building a successful offshore team, you should start thinking of ways to manage and control your projects using tools available for free or at a cost. This ensures that your project is well organized, and you can monitor, share ideas, create multiple ideas for your team online with a choice of views, single or multiple. Using online tools enables your suggestions which can be updated in real- time and automatically and can also track team members and give an overview on the project. It helps manage the workload of the team, schedule tasks, discuss, chat, and comment on tasks during development in real time. There are also tools to track bugs, store and control the version of your project files, and measure the time spent by each team member to complete their projects. Examples of timesheet tools and Online Project Management tools include Basecamp & Zoho. Filesharing tools like, Google Drive, Dropbox, file version control software such as GIT/ GIT Hub can would be beneficial. These are few the tools one can consider using to ensure everything works as planned during the Project. Documentation is very important and should be done carefully for a future reference.
5. Evaluate & Track the productivity of the team:
After the initial engagement, we need to decide on the right kind of setup for the development team. This step should be taken seriously because hiring a bad developer can lead to wastage of both training and recruitment costs, and the general wastage of time and energy. Arriving at the correct decision can, therefore, be very tough and complicated. When evaluating what matters most is culture fitment and team dynamics. Consider evaluation based on the team’s experience, level of education, attitude, motivation factor, leadership, team management, communication, adhering the delivery deadlines and problem-solving skills.
The above pointers are just few of many things one must think twice before confirming a partner for an ODC. A lot of investment, time and energy is invested in setting up an ODC and hence decisions should be thought carefully. To conclude, setting up an ODC is developing countries is on the rise and beneficial. In the recent past, India, Philippines, Vietnam, eastern Europe are few places which has seen a surge in OSCs being setup and will continue to be preferred place for various reason.