Businesses are seeking diversification of their products and services to keep up with the competition in the race to digital-first success. From boutique eateries to global retail businesses, everyone is transforming faster than ever. The major obstacle they face is tech talent shortages.
One way around this is an offshore development team extension. By extending your existing engineering setup in talent-rich locations like Asia, Eastern Europe, or South America — you’re able to tap into pools of top talent at a cost that’s a significant saving on salary and premises prices in places like London, New York, or Sydney.
Understanding the Landscape
Before the pandemic businesses realised software centricity was the future for most industries. However, this was exacerbated. As a result, software engineers became an even bigger commodity. With Western Europe, North America, and Australasia simply not producing enough skilled engineers to go round, tech leaders have been hampered.
They can’t scale at the speed they want, and as a result can’t deliver their new digital products and services to market quickly enough to keep pace with their competitors.
With such a shortage of available elite tech talent, what are CTOs to do? Well, this has given rise to alternative ways of building and expanding their development operations. These include outsourcing and offshoring, which we’ll explore in more detail in the following section.
The Best Uses of an Offshore Development Team Extension
The primary difference between outsourcing and offshoring is the model used to implement them. With outsourcing, you’re working with a third-party vendor — often referred to as a software house — and the developers are sourced and hired on your behalf. This saves time on hiring, but you can’t be sure the engineers are truly the cream of the crop.
Likewise, there’s also a potential loss of control over your product as there can be a confusion over who assigns tasks and the developers are often juggling multiple projects for multiple clients. It can work really well for one-off projects that don’t require continual iterations and delivery. However, for long-term value generation an offshore development team extension is often the more suitable option.
Why? Because you have final say on the hiring process. You have control over the product. And most importantly, the engineers are a genuine part of your wider setup, holistically aligned both operationally and culturally to your business.
Working with a Reputable Partner
When building an offshore development team extension you can go your own path, of course. But, by doing it on your own you’ll have to navigate local laws, regulations, different taxation rules, and so on. So, many CTOs decide to go offshore with the assistance of an expert in the location they want to expand their development team into. But how does this all work in practice?
Before deciding which ‘on the ground’ expert to partner with, you’ll want to do a thorough deep dive into their past case studies. If they have experience in your industry and with companies similar in size and scope to your own, then this is a great starting point. It’s also a good idea to check their website to see exactly how their model works.
Ideally they will have an in-depth explanation of their recruitment process, as well as exactly how they handle your operations. And, it’s also an added bonus if they have some recent and applicable testimonials from current partners they’ve helped to achieve something similar to what you aim to do.
What are the Short Term Benefits?
The short-term benefits of dedicated team extension — that is, one completely a part of your organisation — is that it can temporarily ease pressure on a bulging development pipeline. However, if global talent is only being leveraged for the short-term, then outsourcing might be a more suitable option.
In both cases, hiring time is substantially reduced, although with offshoring you do of course play a role in picking the final hires. Your offshore partner will have sourced candidates and put them through strict technical and personality-fit assessments to make sure they’ll fit your company perfectly.
After the best candidates have been filtered through to the best ability of the offshoring partner you’re working with then it’s up to stakeholders within the company to make the final call. Ideally, these candidates will be the elite of the elite with specialisations in the fields you require — and soft skills that make them a highly suitable fit for the organisation over the long term.
What Are The Long-Term Benefits of a Development Team Extension?
The benefits of this type of offshore application model are seen over longer periods of time. The engineers are completely aligned with the mission and values of the business — as a result, they care about the products and services they work on.
And, they’re more invested in the success of the organisation over the long term when compared to third-party developers who are often working for multiple companies at the same time.
With global talent shortages hampering the ability for CTOs and other IT decision makers to scale at their desired pace, offshore teams provide a viable and sustainable alternative to only hiring locally.
With tech giants having a monopoly on the most talented engineers, it’s a fierce battle for talent that leaves smaller players short of the skills they need. But, in tech hubs overseas there are untapped pools of deep expertise and niche skills that often aren’t available at home. Or, come at an enormous premium.
Ultimately, leveraging global talent via the offshore development team extension approach gives access to niche skills, incredibly high levels of expertise, and perhaps most importantly — a fully aligned, fully integrated augmentation of your existing development setup. Something that simply isn’t the case with traditional outsourcing.