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Choosing an offshore development team (checklist):

by | July 1st, 2017

Big Software Houses VS Small Solution Providers

By Vadym Karpenko, Founder and CEO @ Gera-IT

Software house VS Solution providerWorking with an offshore team is always a challenge.

What will bring more profit and less effort? What level of involvement from your side is appropriate for the most effective work with the outsourced team? To make it clear we analyzed all types of offshored teams and divided them into Big software houses and Small Solution providers. Let’s find out their advantages, disadvantages and risks you may face.

Big Software House

Let’s consider 400+ people companies that have a chain of representative offices worldwide, separate departments working on development, accounting, debt collection, logistics, facilities, UX/UI etc.

Advantages:

  • Your team – dev team, office space, HR – are allocated. And you are the one who manages this on all stages (in most of the cases).
  • Flexible in technologies – you may choose a PHP, Java, or Ruby. You can also decide whether to use  an Agile or ITIL/ITSM process as a management framework, etc.
  • Fast recruitment – scale your team fast, the big HR department is working for you.
  • Turn Key inhouse services – all additional services, like UX/UI, DevOps, Customer Services 24/7, Accountancy, Legal, Community Management, may be provided  without 3rd party help.

Disadvantages:

  • Not very agile in terms of contract – in most of the cases the Software House tells the rules of the game. Any changes to a contract are hard to be negotiated and made..
  • Not aimed to a certain domain – usually trying to cover as many business domains as possible. This wide distribution leads to poor expertise in most of them and means additional investments into the education for customer.
  • Worse communication – in most of the cases you get people in a team that never used to work together before so there is a long “storming” stage of a team before getting on track.

Risks:

The main risk is a longer development and higher price, because of the low domain expertise level of the team, newly formed team, possible low motivation.

Small Solution Provider

Going to a marketplace or reviewing a list of software development companies in a certain country you will always find 10% of Big Software Houses and 90% of Small Solution Providers. They do not compete as the Solution Providers are usually taking a few niches (like, “AI experts, VR/AR experts, Booking software experts” and ready to work with small and mid scale businesses.

Advantages:

  • Agile in terms of contract and personal approach – you will get an agile team with the understanding of your business needs, they may start with a small budget and used to work in a startup rhythm, they bring reusable components from the previous projects.
  • Better knowledge sharing – the people get used to work together before and there is at least one guy that has a good knowledge of your domain (usually it is a Project Manager, QA or a Solution Architect).
  • Easier to keep the team – suppose you are a startup, you got the MVP (minimum viable product) built by your team and now it is time to raise funds from investors. The solution provider will try to keep the team as much as possible to make the same people continue with you when you return.

Disadvantages:

  • Delayed start and Slower scalability – as the team is not big and doesn’t even have an inhouse HR in most of the cases it is often hard to kickstart your projects right away as well as may be hard to scale up a team fast on your request.
  • Local presence only – hard to face a representative in your country as the whole team, including management and business development is located in the same office.

Risks:

The main risk is about trust. You need to rely on a small company without a solid track record and mass media presence.

The checklist for your project to succeed

  1. Make sure you have a specialist or a team that is ready to take leadership with an outsource team on a daily basis.
  2. You have an understanding of your approximate budget and time frames.
  3. Choose Big Software House to widely extend your existing team with an offshore forces.
  4. Choose Small Solution Provider if you look for a rich expertise in a certain domain.

Consider these questions when choosing a remote team to cooperate with and you will make the right decision.

Good Luck.RB_4

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