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Structure Your Offshore Development Team Like a Pro, Revealed!

by | Apr 28, 2023

In the past few years, offshore development teams have become more popular because they are flexible and cost-effective. But many businesses have trouble setting up their overseas development teams in a way that makes them as productive and effective as possible.

When building an IT development team, most assume they will need a Business Analyst, a Tester, and a group of developers. While this may be true for a traditional in-house team, hiring an offshore team requires adjustments to ensure the team operates at peak performance.

One of the critical decisions businesses must make when structuring their offshore development team is whether to hire separate developers or a complete offshore team. Both options have pros and cons, and the right choice depends on the business’s specific needs and circumstances.

In this article, we will discuss the benefits and drawbacks of hiring separate developers and a complete offshore team, so you can make an informed decision when structuring your offshore development team. Let’s dive in!

How to Structure Your Offshore Team

There are two main ways to structure your offshore team:

  • Hiring separate developers, and your Business Analyst will handle them.
  • Hiring a team with Business Analyst, you only have a single point of contact.

Let’s dive deeper below!

Hiring Separate Developers

Offshore development team - Working alone

Scenario 1

Your company already has an onshore development team, and you seek to expand your team offshore due to the lack of talent in your country.

This is an excellent example of how hiring separate developers may work. There is already a team, and you need one or two developers to complete the team. They must be able to communicate with your existing team effectively, which normally goes by written messages rather than verbal meetings in the case of developers.

Scenario 2

Your company has a Project Manager or a Business Analyst onshore, and you build the development team for that person to manage. This ensures that the requirements are collected timely as the person in charge is always with you. The Project Manager will need to have experience in managing remote teams.

Otherwise, it may be messy. The developers need to be able to communicate with the PM and, most importantly, have constant updates. Sometimes you will need to hire multiple developers through the same company, as the offshore developers can sit together in the office, and therefore, productivity can be enhanced.

You need to get a few things right when hiring separate developers.

  • English level: all developers must have proficient English to communicate effectively with the onshore staff.
  • Working hours: as the offshore staff will work with onshore staff, you must ensure their working hours are compatible. Otherwise, the business will suffer from what I’d like to call Timezone Bleeding.
  • Additional compensation: offshore staff won’t have company activities, team building events, etc. Unless you hire them through an offshore provider, the developers will sometimes feel lonely. You will need to think about ways to motivate them to continue providing value outside the monthly salary.

Hiring a Complete Offshore Team

Meeting

This is how big companies do it, and you can do it too!

Big corporations understand that people like to work with their countrymen or countrywomen in that regard. Therefore, all they need to communicate is through a single person, usually a Business Analyst or a Project Manager, and this person will cascade the tasks down to the developers.

This way, the developers feel more comfortable working together and reporting to the team lead or Project Manager without talking to the client. The Project Manager is the only person communicating with the team in another country. The model demands more investments, but you can have a great team with outstanding harmony.

In our experience, an offshore team consists of the following elements: 1 Technical Team Lead, 1 Business Analyst/Project Manager, and 3 or more senior developers, which can be customised depending on the needs. The team should not have more than eight people in total, as it will lead to instability within the team itself in the long run.

Crunch the Numbers

As business owners, we all care about the numbers. Let’s consider the following salary for the current employment market in 2023. The screenshots are taken from payscale.com.

Senior Website developer: $130,000 – $180,000 (not including super, bonuses, etc.)

Offshore development team - Web report

Senior Business Analyst: $120,000 – $150,000 (not including super, bonuses, etc.)

Offshore development team - Web report 2

Suppose your team consists of 5 people, 1 business analyst and 4 developers (one of which is a team lead). Your annual expense for the tech team is around $600,000 plus benefits (assuming everyone has the same salary at $120,000, which is quite lucky for any company in this environment).

Now let’s have a look at an offshore team. All annual figures are what we experienced in the current market in Indonesia.

  • Senior Web Developer: $50,000 – $70,000
  • Senior Business Analyst: $36,000 – $55,000

With the same team composition above, the total expense amount is around $250,000 per annum. A whopping 60% reduction!!

Takeaway

In conclusion, offshore development teams have become popular for businesses looking to reduce costs and increase flexibility. With Indonesia’s growing talent pool and competitive pricing, it is quickly becoming a hotspot for offshore development.

However, simply finding an affordable offshore development team is not enough. It is crucial to consider how the team’s structure fits your company’s unique needs and adjust accordingly.

At VAFE, we understand the importance of finding the right offshore development team for your business. Our experienced team in Indonesia is dedicated to providing customised solutions that meet your specific needs and help your business achieve its goals. Contact us today to learn more about our services and how we can help your business thrive.

Talking about how to thrive in business, we invite you to explore other articles on our website to learn more about business growth, tips, processes, and Case studies.

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