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4 Tips How to Manage Offshore Development Team Effectively

CEO Alcor
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Professional areas include business structuring of tech companies in Ukraine, business & team management, leadership practices.
Updated in December 2020
8 min

Managing offshore development teams is never without challenges, yet when running an R&D office abroad the problems can dramatically escalate (if one fails to consider a range of factors). The good news is that working with a team offshore is actually quite like managing such a team inhouse. And it’s not surprising that the leading tech companies from Europe and the US, like People.ai, BigCommerce, Grammarly, Tonic Health, Certent, and Wargaming, successfully set up their R&D centers in offshore locations. 

 

If you’re thinking about starting your own team offshore (or already have one but aren’t getting the expected results), this article will provide you with some practical advice and share great practices on how to manage offshore development team from leading tech companies. I’ve collected the best practices applied by world-famous companies on managing their Ukrainian teams.

 

Differences in Managing Onshore and Offshore Teams 

 

What is “managing offshore teams”? As we’ve already stated, managing your offshore team is almost the same as managing your in-house. You must follow similar principles, yet for offshore endeavors it might require a bit more effort and time. The three significant differences among an inhouse and offshore team are:

 

onshore-vs-offshore-team

 

Time difference and availability 

With your inhouse team, software developers are always available during your working hours. Therefore, they can easily solve urgent matters once such arise or promptly respond to your requests.  So, you can easily call for an unexpected meeting and they will be available at a moment’s notice. 

 

With an offshore software development center, time differences come into play. You might lack instant access to developers in a distant location and will often have to wait for clarifications. Also, their participation in brainstorming and meetings must be planned for everyone to attend them. 

Belonging to a company 

Inhouse teams easily feel a part of your company as they are always physically present in the building and can easily reach out to anyone in the office. Considering the distance, your offshore team might lack the feeling of being part of the company. They cannot be physically present, so it requires extra effort from you to help them identify with your company.

 

 

Culture 

In your inhouse team, most employees will be from your regular environment and will stick to the same cultural norms. This means you won’t face any serious problems in terms of communication. When you start working with an offshore team, you will most likely notice that they may not completely share your worldview and follow specific cultural patterns. To ensure efficient cooperation between you, you must consider these cultural differences.

 

From the information above, you can see that there are no huge differences between managing your inhouse and offshore team, at least that you must be afraid of and cannot handle. You can overcome most of the above differences by putting a bit more effort into building relationships with your remote team and setting transparent rules.

 

Challenges of Managing an Offshore Development Team

 

In their pursuit of IT talents, software companies take advantage of offshore developers. However, the issue of offshore team management often becomes quite challenging. Even though technology companies are good at digital communication, they may still feel frustrated when it comes to managing offshore development teams.  Judging from my own experience, the core of a drastic communication gap between a tech company and its dedicated offshore team is rooted in the following aspects:  

 

Challenges-offshore-team-management

 

Remoteness 

There is no need to explain why distance isn’t always sustainable for businesses. Nonetheless, software tech companies utilize offshore teams with ease because of the digital working environment that made it possible. Online communication is able to erase boundaries and contribute to a productive remote collaboration. Company leaders must find ways of managing offshore team effectively, and this will help them streamline the process of product development no matter the location. 

Approaches to work 

The working style is an intrinsic part of an effective collaboration inside the team, and tech leaders should pay enough attention to this. Sometimes the way an offshore developer approaches his/her work is different from the one your company has got used to. Ukrainian engineers, for instance, are known to be perfectionists who treat their work seriously. They really strive for excellence and don’t finalize a task if the code doesn’t work well enough. 

 

Such an attitude often bears little resemblance with other offshoring countries, where developers need to be additionally motivated to do their work extremely well. This good-or-nothing manner of handling a task also causes disagreements between dedicated offshore teams and their employer. To overcome this, engage your offshore development team in Ukraine to communicate their hurdles freely and speak up. 

English level 

Another potential issue may be the language of communication. Developers from emerging countries are not that good at English, so they experience difficulties when talking with their English-speaking employers. One of the tips to better managing offshore team is to simplify your language for them. This would help you stay on the same wavelength with your remote development team and eradicate misunderstandings. However, it’s possible to come up with the least burdensome offshore experience. For instance, in Ukraine IT specialists have a good command of English, so you won’t have to resort to “baby talk”. Give clear instructions with unsophisticated vocabulary, because odds are your offshore developers are not native English speakers. Learn more why Ukraine is a great fit for tech companies from my blog article.

 

4 Best Practices of Offshore Team Management

 

The challenge of managing offshore teams effectively has become extremely accurate during the covid-19 pandemic. Many businesses had to restructure their internal processes, go into digital, and help their employees work from home. For international tech companies that have several distributed teams of developers globally, this issue has not been groundbreaking. Having had a lot of dialogue with C-level managers from software companies, I’ve developed four main principles that will help you build a bridge between your distant teams, especially in turbulent times. 

  1.       Motivate your Team

Employee motivation is a powerful tool of offshore team management that may bring amazing results for a company. Again, due to geographic distances it’s hard for managers to influence their remote team, especially when working with a vendor. Having an offshore team provider creates additional barriers, and why tech companies need to reconsider their engagement model to make the following tips of managing offshore development teams work.

 

motivate-offshore-development-team

 

Assign a local team leader 

 

When starting a team, you not only need people who are motivated and enthusiastic, but also a true “leader” to drive them and assist in case of questions. This person will be a local team lead who will also act like a “communication channel” between you and the developers.   

 

What is more, your team lead will take control of product development and relieve you of micromanagement or other time-consuming operations. A great lead is often responsible for operational management – to maintain the office in an appropriate fashion. If you want to get rid of this headache and rather focus on team building and product development, leave mundane tasks to us. At Alcor, we provide operational management support for software companies in Ukraine, including recruitment, HR payroll, finance management, legal & compliance, business trips support etc. So, your team lead will be responsible only for his/her primary area of responsibility regarding the team and engineering.

 

 

Be Present in the Life of your Team 

 

Though there will be a local team manager, some important advice for managing software teams is to be present. The secret to effectively managing offshore development teams is that your presence in the life of the R&D office should be evident – become a motivator for them and keep in touch as often as possible via online chats.

Don’t be afraid to “overcommunicate” – Ukrainian developers become less reserved if you stay in constant touch with them – and to evoke more enthusiasm, don’t forget to praise your team often. This technique works well even for mature experts. 

2. Unify your Teams 

The principle of unification says that all your teams should act as a close-knit family; yet to make it a reality you need to apply a unified approach towards all members of your company (including those distant R&D offices).

 

unify-distributed-teams

 

Share your vision 

 

It’s crucial to share your vision, corporate values, mission, and culture with all employees: include your remote R&D team into company meetings, big corporate events / parties, and strategic sessions, and this also concerns the common group chat for all company employees.

 

Initiate Visits and Business Trips 

 

Many tech companies host their offshore teams at their headquarters. Don’t hesitate to invite them for induction trainings to your head office, introduce your company and key people, and conduct corporate meetings. In turn, you should also come to see the team’s local office to understand their environment.  Indeed, on-site meetings on a regular basis sustain smooth communication and ease managing software development in the long run.

 

The great news here is that you don’t have to organize a business trip to bring your developers to the headquarters. Thanks to technologies, this is much easier now. For instance, for team education, presentations or demos, you can easily use Zoom or other software described below.

 

Plan meetings 

 

Different time zones can be a real headache, so it’s advisable to decide on those time slots when you and the R&D team could communicate via Skype calls or online conferences. This solution will significantly save you time, as there will be no need for holding on the phone for long-awaited responses.  

3. Automatize the Processes 

Then, consider the software your new development team uses. It should be the same for both in-office and remote developers – in order to avoid errors within the system. If for technical reasons this is not possible, take care of the appropriate communication tools. Every decision-maker in tech realizes the importance of an online management system for good operational performance. 

 

automate-software-development-process

 

Another important issue concerns product development methodology. Developers in some countries, for instance Asian ones, need strict rules and processes. Therefore, it’s better to find alternative ways for managing offshore teams in some countries. For Eastern Europe, Agile methodologies (with the opportunity of changes within the process) work better. And while American and European tech companies also prefer Agile, they won’t have to worry about the incompatibility of methodologies once they offshore tasks to Ukraine.

4. Contribute to Dedication 

The last but not least principle is dedication. This states that your new development team should be committed to the company they work for – and be eager to do their best for overall success. Nevertheless, the first step in nurturing commitment is trust. Relationships based on trust are always faithful and strong – therefore, say much about your company and its history, provide your team with necessary background information, and stay open.  

  

Next, get to know them better. You may invite your development team for lunch and ask more about their country, culture, family, or lifestyle, etc. Ukrainians love to discuss cultural differences and demonstrate their national customs! Just add more informal talks to your communication and show interest in their lives.

 

Finally, make your R&D team feel valuable. Don’t task them with only support or maintenance work as it might offend them. You hired these tech specialists because of their professionalism, so give them a chance to show it. By completing some real work, the remote development team will be more than happy to contribute to the company’s success. This is also a nice tip for retaining the IT stars in your company, i.e. make them feel wanted and important and you will get commitment in return!

 

create-dedication-in-the-team

 

C-suite of the Leading Technology Companies about Offshore Team Management

 

People.ai is a San Francisco-based IT company that opened its R&D center in Ukraine several years ago. The company’s CTO Andrey Akselrod, who is accountable for R&D team management in Ukraine, advises one to hire a country manager with whom you can establish trust. This person should know how to manage a software development project, as they will be your right hand in the local office. Their job is to hire, motivate, and retain the right people, as well as ensure corporate culture across your teams. Andrey states that for small offshore teams (less than 5 people) it’s enough to bring your project manager or senior technical lead over to Ukraine to help set up the process. 

 

According to Andrey Akselrod, business trips mix cultures and develop “internal experience”. This is a good move towards fast onboarding, so bring your colleagues to Ukraine to meet the newcomers. 

 

One of the most important perks for tech developers is believed to be training and opportunities for internal growth. Aleksander Radchenko, CEO at Radenia AG and an IT adviser, has extensive experience regarding the cultural aspects of managing software development teams remotely. 

 

Aleksandr Radchenko states that Ukrainian IT specialists are remarkably effective if managed properly. 

 

Ukrainian software engineers are known to be quick and continuous learners, yet they sometimes lack emotional intelligence. That is why you should teach them the specific features of your tech business and give some soft skills training to boost project management and open opportunities for a team extension. This is much appreciated in Ukraine as software developers here are really into their profession and value foreign practices. As stated by Aleksander Radchenko, engineers in Ukraine have a high sense of ownership and commitment. 

 

Brian Dhatt, CTO at BigCommerce, states that while opening their own R&D office in Ukraine he was especially concerned with enhancing motivation. He suggests preparing an on-boarding plan for each team member, as this helps your newcomers better understand their career prospects inside your company (and in turn motivates them to work harder). 

 

Brian Dhatt underlines the importance of showing stability and trustworthiness of your company, so demonstrate that your new R&D office is not an experiment but a full company branch with long-term prospects. 

 

Tools for Better Managing Offshore Teams

 

According to statistics, over 70% of communication is non-verbal, which means that video calls are a good facilitation tool for more productive communication with remote teams. For this reason, be sure to use video for status calls, online conferences, and feedback. Video conferencing and visual contact with your development team may be realized with the help of the most popular software: 

  •       Skype 
  •       Zoom 
  •       Microsoft Teams 
  •       Google Meet

Messengers are another group of useful tools to enhance your communication with a development team overseas. They will assist you in demonstrating your openness for discussions and speed up the development process: 

  •       Slack 
  •       Yammer 
  •       Hangouts 
  •       Discord 
  •       Telegram 
  •       Microsoft Teams 

In addition to this, never hesitate to make use of such cloud-based software like Trello, Jira, Asana and others, which really automate workflow management and provide effective collaboration across teams. The value of these tools can hardly be overestimated when managing offshore teams. Just keep all the tools simple and strive for clarity.

 

Conclusions 

 

In conclusion, you should remember that the worst idea is to treat your remote R&D team as just a “gang of techies”. If you want to gather some real IT talent, implement simple actions and get rid of many unforeseen troubles. Keep in mind that managing offshore teams is very similar to managing employees inhouse. Put these 4 principles (motivation, unification, automatization, dedication) into practice and start implementing the best practices for managing offshore resources. When you apply all the practices properly, remote developers are as qualified and dedicated as your in-office employees, and this is your key to ultimate success!

 

And in case you would like to start your own team in Ukraine or need a hand with understanding local mentality, feel free to contact us. We will be happy to assist you with opening an office in Ukraine and handling all related activities like office searches, hiring local engineers, legal support, organizing HR payroll, and other operational processes. 

 

Alcor-offer

 

FAQ

How much does a turnkey R&D center cost?

It depends on the number of services you’d like to have. Interested in hiring developers only? No problem. Or maybe you need just legal support? OK. With our flexible engagement model, you will have comfortable pricing. Regulate costs easily by paying only for what you use. To calculate your expenses on the offshore development team, go to the R&D calculator on our website.

Software R&D team Vs extended team – what's the difference?

You manage a software R&D team independently with no intermediaries, while extended development teams are supervised by vendors who assign project managers to help you with onboarding, training, etc. You pay a one-time fee per hire for your R&D team member with no buy-out fees in the future, while for an extended team you’ll be charged monthly and pay an additional fee to buy out the team.

How much time will it take to set up an R&D center in Ukraine?

It usually takes us 3-5 weeks to establish a software R&D center. Mostly it depends on the number and type of IT specialists you want. We guarantee a fully equipped development office with 5 seasoned software engineers in Ukraine within 1 month. All of this can be further supported by our accounting & legal teams, so that your offshore R&D center works like clockwork.

What services does your offshore R&D solution include?

Alcor provides an all-in-one place solution to build your software R&D department in Ukraine, including IT recruitment, real estate, office maintenance, legal support, HR payroll & accounting, and other operational services for tech companies in Ukraine.

Contact Us

We will provide you with statistical data regarding the number of developers in Ukraine and their average salaries. The discussion will proceed with the expected hiring deadlines and our recommendations on managing payroll, equipment procurement, and compliance matters.

We respect your privacy and will never share your data with any third party or spam you

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