How to build a successful offshore software development team?

Businesses today understand the importance of staying ahead of the competition and being on top of their game. Especially when more and more businesses are warming up to cloud-based services and the SaaS industry is booming – or as Marc Andreessen would say, “is eating up the world”. Here, we will understand how an offshore software development team can help you stay ahead and how to build one.


As software-based products and services are becoming the go-to for any industry, businesses are in need of constant support and dependable tie-ups which can not only execute but take the journey of building and evolving their products with them. 

In 2021, thanks to the pandemic, we’ve seen a surge in demand for quality talent and teams, regardless of where they work from. For instance, companies like Spotify have gone completely remote and are welcoming fresh talent to join them from anywhere around the world! A remote workforce is now a reality.

But what about companies who are just starting out?  Most of these funded startups can’t spend the time only on hiring and building an engineering team. A wiser approach is to outsource the project to experienced product development companies that can manage the project remotely. This helps them access quality talent, cut down on hiring costs, expedite their time to market while culturing a relationship with a dependable and long-term offshore software development team. 

benefits of offshore software development

While the benefits are lucrative, the onboarding of such teams can be a tricky affair. Which is why we broke it all down. These steps should help you navigate through the process seamlessly.

Step #1: Search for the right company

This is the most critical step for every organization or entrepreneur looking to build a successful offshore software development team. One misstep can result in a huge loss of your valuable time and money. The key to building and driving an efficient team is to pick one that: 

  • Can understand your product;
  • Can understand your industry and has relevant experience;
  • Can pool in ideas rather than just being an executioner;
  • Is disciplined and reliable in terms of consistency and support;
  • Can help you save time to focus on other business macros.

The cornerstone of successfully building an offshore software development team is to first understand the domain knowledge and skills you need your partnering firm to fulfill. Outline your product, break it down into milestones, set up phase-wise feature lists, build tentative timelines against them then list down the skill-sets you need for your product’s development. Pace through your options based on the above list and go for the one that ticks off all the checkboxes.

Step #2: Evaluate and lock commercials

The first step should help you narrow down the best options. Now, to further trim the fat, look for the companies that are giving you the best return on your investment. This doesn’t mean going for the cheapest or the quickest but the one with the most to offer in terms of – business modeling, quality, talent, and other core areas that are a must for you. Typical outsourcing firms end up dedicating resources at an hourly rate. While this is a valid option, it’s not necessarily a fit for your product. In fact, when it comes to the financials around an offshore software development team, there’s no one-size-fits-all approach.

Commercial models and communication have come out to be the biggest barriers for the majority of our offshore clients in their past. Our team has realized this over the years while working on projects across continents. And based on this experience, we believe one of the following 3 commercial models will come closest to what you need:

  1. Pay by the hour – This is the standard way of how your offshore team bills you. You are charged by the hour based on the number of developers deployed on the project. While this seems practical, entrepreneurs and companies often witness a lack of efficiency from their offshore partners or at least live in the paranoia of it. It happens because sometimes you risk getting overbilled or more hours being exhausted on tasks that otherwise would take a lesser time. This adds to the stress of micromanaging each task and resource in the team.
  1. Retain a team – This comes out to be a more efficient solution for most businesses since you end up employing the offshore team on a monthly basis with periodic reviews. This solution also helps you anticipate if you will end up needing more or less infra and support in your product’s development in the future and tailor the scope accordingly.
  1. Opt for a fixed cost  – Having a one-time cost attached to a clear-cut scope helps entrepreneurs or businesses who look for a managed solution – costs, approach, and milestones around all things from inception to completion. This comes out to be a leading option for the more dynamic and intricate projects that span over years.

Step #3: Start with a pilot project

By now you should be comfortable and confident with that one firm you want to shake hands with and get the ball rolling. While you do that, it’s always a good idea to run a pilot project before kicking off work on the main product. A few reasons as to why this comes in handy:

  • Helps you understand and build comfortable communication with them
  • Gives you a taste of how much they can actually contribute in the longer run 
  • Allows both of you to familiarise yourselves with the regime and working styles
  • Lets you foresee the practical quality, efficiency, and flexibility they have to offer

Communication-wise, in addition to the possible language barrier, there can also be varying cultural, environmental, as well as behavioral norms that can lead to the disparity. Luckily, the upside to having a dedicated team is that you don’t have to coordinate with or manage each resource, you just need an experienced project manager. 

A project manager will make your life a little easier by removing the burden of supervising your project and the team working on it. Not only that, but they also understand the software development process – in and out. They help in creating and planning the product’s architecture with the core engineering team – ensure its alignment with your core business objectives and keep you in the loop on what’s happening. Since they’ll mostly be the key point of contact, you can test them out during the pilot!

Step #4: Document everything through available tools

Documentation and communication are the lifelines for any organization working with a partner offshore firm. The market is flooded with tools and platforms that can help facilitate this between you and your offshore team. A successful software development process certainly requires some trial and error to ensure that the end product matches the initial vision. So to map and track sprints is a must. This allows you to have retro-sessions, collect data and observe trends which can further enhance the overall performance on both fronts.

Here are a few platforms and tools which are native to documentation and communication processes:


Having worked and set up offshore teams for funded startups across continents, we understand how valuable time can be for new ventures. We hope the above steps shared some perspective and will help you set up the right team you’re looking for!

We have enough experience under the belt to help you build your dream product and would love to help you set up your remote engineering team! Are you free for a quick discovery call? Get in touch with us here!