What’s the purpose of an offshore development company? To guide you through the process and take care of all the legwork. Therefore, you want a company with years of experience building successful offshore teams.
They should understand the industry, the culture, and have seen it all before.
Unfortunately, while plenty of businesses call themselves “offshore development specialists,” some of them are far from it. Let’s take a look at how to verify an offshore partner early doors — checking they’re genuinely reliable and competent — before you’re in too deep.
First thing: are you sure it’s offshoring?
While often used interchangeably, offshoring and outsourcing are two very different models. The problem is that as offshoring becomes more popular, outsourcing companies want their slice of the pie, misleadingly advertising “offshoring” or “offshore outsourcing” services.
- Offshoring — Building a dedicated software development team (complete with office space, administration, and management) in another country. You own the team entirely and they’re fully integrated into your business.
- Outsourcing — Hiring contractors to temporarily cover a lack of capacity. These are more like freelancers: called in when required, but independent from your organisation.
Work is outsourced in every industry, usually because of lower costs. And often that’s fine. Equally, for the right company, there are significant benefits to investing in an offshore development team.
The purpose of this post is to help you see through the muck: how do you verify a potential offshore development partner before signing any contracts?
Well, there’s a lot you can do.
1. Evaluate their demonstrated experience
It’s 2019: there’s no excuse for not having some portfolio pieces or case studies on your website. These can offer a perceptive window into what your offshoring partner can do, and how well they do it.
The company should be able to showcase their successful history of building offshore development teams. The details — approach to projects or relationships, timelines, results achieved — are most important. But also the delivery: do they sound professional and confident, arrogant and showy, or maybe lazy and uninterested? A company’s writing usually matches the personality behind it.
Keep an eye out for vagaries: if a company really knows their stuff, they can describe is succinctly and make it easy to understand. Rambling language, vague descriptions, and very broad claims should all be red flags!
You can also go the extra mile if you’re willing. Are their past clients still in business? Any evidence of significant growth or positive changes? In the UK, for example, you could review their accounts filing history on Companies House.
By doing this early research, you can begin to see if they’re a good fit for you and your business.
2. Do they prioritise cost over quality?
One significant benefit of offshoring is lower costs. However, while the price is important, it’s usually a mistake to simply snap up the cheapest offer.
So how do you guarantee you’re getting your money’s worth?
The cost of living in countries like India is significantly lower than in the US and Western Europe. That means you’re going to get a good price compared to domestic rates — guaranteed.
On average, running your software development centre might cost 50% of what you’d pay at home — and that includes your taxes, utilities, administration, and everything else required to manage the team. That’s an enormous saving.
But an outsourcing company might make you an offer for just 10% of the at-home cost. Despite the enormous price appeal, your enthusiasm should be tempered. Can they actually deliver what you want?
Whoever you approach, get specific about the costs. Enquire about quotes, timelines, and future costs. Do you have to pay before they build your team, or after? Is there a standard cost-breakdown you can read to see how things usually work?
As for progress, it’s the same strategy: ask questions and demand straightforward answers. What’s their recruitment strategy? Which companies have they served in the past? Does the management have technical leadership experience?
You want someone who knows how to recruit top-class talent into your business. If the price is staggeringly low, be diligent. However, remember that the price should be low — it’s just a matter of finding the right balance.
3. How do they approach communication?
When working with an offshore partner based 10,000 miles away, communication is key. Good communication and planning lay the foundations of trust between both parties, and they are crucial for an effective partnership.
Evaluate communication before signing a contract.
All you can do is analyse what you have. When discussing your requirements, does the company sound confident enough? Are they asking you the right questions?
During your early communications, are responses to emails and calls fast? Are they polite? While it isn’t much to go on, any communication red flags at this early stage should be taken seriously. If your partner won’t go the extra mile before securing your money, how will things go once they get paid?
4. Can they bridge the culture gap?
Building an offshore development team means working with people from different cultures. Though cross-cultural teams are becoming commonplace, establishing smooth relationships between new colleagues can always be challenging.
A weak offshoring company will pretend that the culture gap isn’t there. A good partner will not only acknowledge it, but also offer suggestions on how to bridge it. At The Scalers, our top-level executives include Europeans who have lived in India for years. They act as the perfect bridge between the Western and Indian team members.
When talking with a potential offshoring partner, discussions over cultural differences should be held openly. Any reticence on that subject should give you pause.
Of course, there’s more to partnering with an offshore company than these four points. We haven’t even looked at crucial areas like recruitment or technical competence — but we don’t need to. This article is all about those first encounters. If it’s a green tick on all 4 of these points, we encourage you to carry on the conversation and get into the details!