After Derek Gallimore’s book “Inside Outsourcing” came out on June 7, 2022, a new wave of hot debates about outsourcing has risen in the business community. While some people blame it as “the Bad Boy of Business”, others perceive it as the future of work.
To sort out the issue, we surveyed nearly 300 tech startup CEOs from the USA and the UK. Based on their attitudes toward working with outsourced development team members, we’ve divided respondents into three main groups:
So if the decision to outsource a development team for your project still keeps you on the fence — you’re not alone. After all, hiring people you don't know halfway around the world relying on just their word to bring your project to life seems like taking a leap in the dark.
But this is the view at one end. Like others who were given the “bad boy” nickname, outsourcing is just often misunderstood. One of the main reasons is in lack of comprehensive information.
We decided to provide you with details on how to manage an outsourced team, and what it looks like to work with a software development outsourcing team like ours from the inside.
By thoroughly describing our backstage processes, we believe you’ll be able to fill all gaps and turn mistrust into a certainty that a modern outsourcing software development company can serve you as well as an in-house team.
In truth, it can serve you even better in terms of accessing a vast pool of talents, cost-efficiency, and fast time to market.
Benefits of hiring outsourced development teams in numbers
So what benefits can you get by building an outsourced development team? Let's sort out the essentials:
Access to a pool of 26.9 million world-class developers
We all witness the software market evolving at breakneck speed. Within six to ten months of software development, chances are you’ll have to change something to meet new market requirements.
For this, you might need to hire additional developers which means getting stuck in the tedious hiring and onboarding process. Alternatively, you can make your existing developer learn the new required thing, spending time and possibly missing the window of opportunity to be among the first adopters.
Since software development outsourcing teams work on versatile projects, they tend to have seasoned specialists for all intents and purposes at their disposal.
For example, when our client came to us to develop a secure messenger for the Middle East region, he planned to code it in Ruby on Rails. Later on, we saw the need to shift to Elixir to make his messenger, a highly loaded system, operate smoothly.
If our client had worked with an in-house team, it could have taken months for him to hire an Elixir backend developer. Working with us, he got this specialist in a flash.
Reduction of overall development costs by 20%, 50%, or even 70%
More often than not, a project moves through development at different paces. While seeking investments or passing through verification procedures — you might need to put your project on hold at times.
With an in-house team, you will continue to pay monthly salaries, payroll taxes, insurance, vacations, and pension plans as well as office rent and equipment & utility expenses during the lull period.
With outsourcing, you won't. A software development outsourcing team bears all these costs, offering you an option to pay for hours certain team members actually spend on your project. No more, no less.
For example, we estimated that developing an Instacart-like delivery app in the US with an outsourcing company would cost at least 20% less than with an in-house team. More significant savings happen if we change the location and with it the hourly rates of the outsourced dev team members. This way, hiring an outsourced team from Western Europe would slash the app development cost by 50%, and from Eastern Europe — by a whopping 70%.
Bringing your product to market within months, not years
Similarly, as there are lull periods, there are also load peaks in project development. When you need to validate your startup idea, meet obligations to investors after raising funds, re-engineer your software due to ever-increasing user flow, etc. — all this implies strict deadlines and tons of work. Who will manage it better: an in-house team or an outsourced team?
As a rule, outsourcers work on multiple projects simultaneously. To cope with everything, they set deadlines and meet them. More so, most outsourcing contracts carry harsh penalties for failure to meet deadlines without a valid reason.
Throughout the entire Mind Studios life, we delayed the project releases only for 2 business days.
For in-house teams, violating project deadlines is a more common practice than for outsourcers. But in terms of flexibility, working with a local development team is second to none — or so it was believed before the pandemic. With a well-established development process and modern communication tools, managing outsourced development teams now seem as easy as if they were sitting in your office.
Here’s proof: Being a software development outsourcing team from Ukraine, we managed to develop a 4-app system for the James Butler delivery service in Denmark from scratch just within three months.
Seeing the great capability of outsourcing in helping entrepreneurs make tech products quickly and efficiently, Mind Studios’ founders decided to start their own outsourcing company. Our CEO Dmytro Dobritskiy recalls:
“The main reason for creating an outsourcing company was the desire to dive as deeply as possible into the world of technologies. More so, despite the popularity of outsourcing, we had witnessed that very few companies really embraced the client's idea; many often treated a project as “one more from a pipeline”. We decided to initially profess a different approach and help entrepreneurs and businesses find the most effective solutions.”
So let’s unveil how Mind Studios builds and manages outsourced development teams to smoothly process the development, meet clients' requirements, and provide deliverables that exceed clients' expectations.
How Mind Studios builds and retains outsourced development teams
Every project comes to us from our business development consultant in the form of a signed contract with an NDA. This means we got a sense of the project, its scope, and the client’s approximate budget. What happens next?
Discovery stage includes conducting all-encompassing market research with competitor analysis and customer interviews. In our articles about the web and mobile app development process, we emphasize the importance of this stage for any entrepreneur who strives to create a marketable product.
To reach an agreement between a client and a software development outsourcing team, the discovery stage is of utmost importance, too. It enables us to specify the details of what we’re going to develop and therefore, provide our client with a more realistic estimate of the project.
We at Mind Studios often work with projects with ever-changing requirements and not well-defined specifications. In this case, we as a rule offer the time and materials model as the best for mutual settlements: a client pays for the time and effort spent on implementing certain project functionality.
Here’s a catch: Since there is no fixed project scope, we couldn’t provide a fixed development budget — all our estimates are approximate rather than precise.
On the flip side, it gives us flexibility. If a project estimate we got after the discovery stage is acceptable for our client, we’ll move on. If it’s not — we'll always offer them what functionality to curtail to cut the cost without sacrificing the product quality.
Project platforms and required specialists
After we’ve agreed upon the project scope and budget, we roughly understand what we need to do and what platforms will be involved in the project.
In 99% of the cases, we need a backend developer and someone from the front-end engineers.
For example, it can be only a front-end developer if we develop a website or a web app.
However, if there is a mobile-only project, we don’t need to involve a front-end developer. If we want to build a native iOS/Android mobile app in addition to a website, we’ll need separate iOS and Android developers.
The complexity and specifics of the project, number of platforms, business requirements, available budget, and deadlines — all define the size of a software development outsourcing team we pick for a particular project.
Here we’ll share what the Mind Studios’ fully staffed development team looks like:
- a project manager
- a business analyst
- a UI/UX designer
- a backend developer
- a front-end developer
- an iOS developer
- an Android developer
- a quality assurance specialist
Assembling a team
Good outsourcers always have several projects in progress at a time, and Mind Studios is no exception. When a new project comes to us, it means we need to plan it or put it in a pipeline with other projects.
At first glance, everything seems simple: look for the specialists who will be free first, and involve them in a new project. In practice, building the outsourced development team that will meet the project needs is not a walk in the park, and is a responsibility of a separate specialist — a resource manager.
Since each project ends up at different times, by default, our resource manager looks for those who will finish work first, but that’s not all:
Grade of developers. Based on the input data about the new project’s complexity, the resource manager evaluates the level of tech savviness required for each specialist to handle the project.
For example, if there is a complex system of integrations on the backend, we understand that we can’t involve a junior backend developer even if they are available sooner than a middle or senior backend developer. In this case, we need to provide the project with a middle or senior developer or, at least, provide a junior backend developer with a middle developer as a mentor.
Workload revision. Sometimes, it turns out that required middle/senior developers are busy on other projects and free junior developers are incapable of taking on the new project.
In this case, our resource manager's task is to split the required middle/senior specialists from other clients’ projects without breaking any schedules. This way, when our middle/senior developer gets free for a couple of hours a day, they could start on the most complex tasks of the new project while delegating simple, basic tasks to a junior developer.
Development priorities. More often than not, the backend part of the project starts before front-end development. Front-end developers rely on the backend to do their part properly.
So first, our resource manager needs to involve backend specialists in the new project. They start to gradually develop some basic things to give front-end developers something to work with later on.
Let’s summarize with the words of our COO Anton Shatalov about working with the Mind Studios outsourced teams:
“If a new project is complex, it doesn’t mean our client has to wait until one of our senior or middle developers is free from other projects. Neither it means our client will get only junior developers to work on their project just because they are free and can start on the project immediately. We always put a lot of effort into wisely picking up a combination of specialists with different levels of experience to meet specific project needs.”
After assembling outsourced development team members for the project, our business development consultant organizes a kick-off meeting or introduction call with a project manager (PM) and the client.
From now and on, the PM becomes the client’s main point of contact. PM starts to communicate with the client and for this, they compile a communication plan.
It is a table with answers to the following questions:
- How frequently will we have calls? — 3 times a week.
- What types of meetings will we have? — Sync-ups, retrospectives, daily standups, demos, etc.
- What are preferable tools for communication? — Google Meet, Slack, emails, phone calls, etc.
- What is the preferable duration for each type of meeting? — Every week we’ll hold a sync-up call within 15 minutes.
Thanks to the communication plan, the client, the PM, and other team members have a clear picture of how they will communicate, how often, how long, and what to bring with them for a particular meeting.
For example, we can agree upon the following: 1) at demo meetings, we’ll need to show the biweekly progress achieved; 2) after the demo meeting, we’ll need to send a follow-up email.
From our side, we commit to sending weekly status reports, to keep our clients up-to-date regarding the project development progress. Status reports are drawn up according to the following template:
- We did 1), 2), 3),...
- We’re doing 5), 6), 7),...
- We’re testing 8), 9), 10),...
Status reports can be sent with different regularity: either weekly or at the client’s request.
In the Agile methodology, the development process is split into sprints. According to the client’s needs and project specifics, sprints can last from one week to four weeks.
At the end of each sprint (usually, two weeks long), we make a report along the following lines:
Within two weeks, we developed this functionality, figured out these bugs, and fixed them this way. We made 100% and we even have taken on an additional task. We have no roadblocks and are moving forward on time and on budget.”
Additionally, before sending this report, the Mind Studios team carries out the next sprint planning and shares it with the client.
The PM traces what tasks the team has completed and what tasks they left unfinished. Taking into account the team members’ sick leaves, vacations, days off, government holidays, and so on, the PM plans the following sprint. They distribute tasks for iOS, Android, backend, frontend, design, and QA departments among the available number of specialists.
Therefore, at the end of each sprint, the client has full information about how the last sprint was completed, what they paid money for, what the team plans to do in the following sprint, and what tasks remain in the backlog.
We offer clients who outsource to our development team their projects to shift to a support contract after a successful product launch.
It implies assisting with any problems, drawbacks, bugs, or whatever else that can occur during the first month after the product release (a so-called post-launch stabilization phase). According to the support contract, our PM, backend developer, and QA engineer commit to responding to the client’s requests within the set period and help promptly fix the system.
Mind Studios’ success stories
Our approach to managing outsourced development teams has already been tested — and has demonstrated great results — over and over again. The most demonstrative are two projects, the James Butler delivery service for Denmark and the HWPO Training platform for Mat Fraser, a famous Canadian-American CrossFit athlete, each of which we delivered just in three months.
James Butler delivery app
When the company’s CEO Thomas Eriksson came to us to build a delivery app for Denmark, he set incredibly tight deadlines from the get-go. Our team needed to build two native apps for iOS and Android platforms for each of the two user roles — customers and couriers — in just three months. Thomas planned to raise substantial investments and needed to present the ready-made James Butler 4-app delivery system by a certain date.
Those three months were full of brainstorming sessions, challenge-solving decisions, and close cooperation with the client, the UI/UX designer invited by him to the project, and the managers from the Danish Bank. The latter was due to Denmark not supporting Stripe, which is our usual system for payments. The deliverables we presented to Thomas after three months of active development left him completely satisfied.
HWPO Training platform
This project appeared in our portfolio thanks to the recommendation from Leon Cassidy, our dedicated client for whom we built the Fitr.Training platform. The task was to develop a service similar to Fitr for Mat Fraser under his trademark HWPO.
Like the founder of the James Butler app, Mat Fraser asked us to release a project within three months. This time, however, it was a 6-platform system including backend, front-end part, and apps for iOS and Android platforms for each of the two user roles — coaches and athletes.
Despite taking our previous project Fitr as the background, we put a lot of effort into figuring out what features to delete and what to add by constantly analyzing Mat Fraser’s requests.
One more challenge was to think over the logic for introducing the new service to thousands of Mat Fraser’s established subscribers. We needed to make a shift to the new HWPO platform as easy as possible for them. And we did it so that it was enough for our client to post on his social media:
Thanks to adhering to a well-defined product roadmap, clear communication plan, and fine-tuned development process, we built the HWPO eco-system on time. And after its post-launch stabilization sprint, we’ve got honorable reviews from Mat Fraser’s team.
“In the world of IT, to check the upper capability limits of any system, you need to run stress testing. Projects like James Butler or HWPO that require developing multiple platforms within strict time frames of three months — they are stress tests that put our team through the wringer and make our business development consultants think twice before taking on similar projects. However, working under the extreme load enables us to verify our procedures of building and managing outsourced teams and ensure they work well.”
— Anton Shatalov, Mind Studios’ Chief Operating Officer
Tips for managing outsourced team members
Summing up all of the above and with the help of our project managers, we've got you covered with five core tips to make your experience in outsourcing a software development partner positive:
- Compile a product requirements specification to ensure all stakeholders of the project development have a common view of what you’re going to build.
- Discuss the preferable ways of communication with the team, the frequency and duration of the meetings, calls, etc. and map this out in a communication plan.
- Reach an understanding of how the team will report on their progress before going into the project development.
- Ask questions to confirm the team properly understands your requests, features’ logic, etc.
- Ask the team to provide you with a call summary and decision log after each meeting.
To help you make a final decision, we share some eye-opening facts about IT outsourcing:
- 92% of G2000 outsource development teams
- $1.3 trillion — this is the projected IT outsourcing spending worldwide by the end of 2023
- About 60% of IT companies from the US and Canada outsource at least a part of their mobile app development
If after reading this article, you confirm your decision to hire an outsourcing development team and consider Mind Studios as a potential partner, move forward to making this intention a reality — our business development consultant is one call away.