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What are the key factors to consider when effectively managing an outsourced team?

Written by: Richelle Matthews, COO
May 26, 2022

With the current state of the market for tech talent and the wide acceptance of remote work through varying time zones, the benefits of outsourcing have been clearly presented as one of the solutions to the North American tech talent shortage, which is predicted to continue as 40 percent of employers reported losing team members to a higher paying position in 2021(BetaKit).

So, with talent becoming more difficult (and expensive) to access, you decide to get innovative and outsource. But - before you move forward meeting your next tech team, there are a number of variables to consider: including which outsourcing model and which project management model is best for you and your business methodology. 

There are three widely used outsourced development models that are dependent on your project, team and business competencies - each presenting the opportunity for you to achieve your goals, with your budget and on your timeline - even if your team is in different time zones.

 

Model One: Staff Augmentation 

Staff augmentation is an outsourcing model that integrates individual contractors into a team, based on the project needs and business objectives. The outsourced software development resources are an extension of the in-house team, creating an environment where there is 100 percent integration with the local team. This model works to ensure a seamless transition as they work directly alongside the local team and team lead. 

 

Model Two: Dedicated Team 

The dedicated team model utilizes both a remote team lead and a local team lead so the project scope and direction can be overseen by the local team lead, and the progression can be overseen by the remote team lead. A dedicated team can range from partial to complete integration with the local team. The project scope and parameters are discussed and agreed upon by both the client and the outsourced team so the project is completed to the expected standard agreed upon ahead of time, while the in-house teams focus on other business initiatives. This model is best if you need to add additional resources to meet deployment deadlines or clear a development backlog.

  

Model Three: Project Based 

Project based outsourcing means an outsourced software development team is assigned a project with a clearly defined scope - and delivers the final result back to the client on a specified timeline, generally with a fixed cost. Project based teams stay almost entirely separate from the local team, with an integration percentage of 0-20 percent. With a clearly defined project scope, the local team can move forward with additional business initiatives as the remote team works to complete their project with a remote team lead. 

With three options for an outsourcing project, it’s important to consider the model that will best benefit your core business and the overall objectives of outsourcing. 

 

Need 

Pricing

Contracting Style 

Fill skill gaps in your team

Time plus materials

Staff Augmentation 

Add additional capacity to meet deployment deadlines

Time plus materials

Dedicated Team 

Need to complete a specific deliverable quickly

Fixed scope and price

Project Based Team 

 

Pricing: What works best? 

Staff augmentation and a dedicated team both work under the time and materials model for pricing and payment, meaning that the contractors are paid based on the number of hours the project takes to complete, plus the cost of the materials used for project completion. A project-based team works on a fixed rate, so long as the scope of the project is not altered during the completion process. Outsourcing provides cost-effective, high-quality developers, so your overhead costs decrease, but the quality of the deliverables stays consistent. 

 

Security: How to stay secure with each model 

Security is a front of mind concern when you have an overseas project, and rightfully so- but, as remote work has morphed into an accepted norm, security protocols have advanced alongside it. When outsourcing, it is important to consider 4 of the best practices

  1. Establish clear expectations with the outsourcing company  
  2. Understand and follow compliance expectations such as SOC 2 requirements
  3. Hire an internal team that continually reviews security processes and security threats in your workflow
  4. Be proactive in your security protocols - don’t wait until there is a problem to develop a plan 


Work management, devices and QA:

 When looking at device management, some companies send devices to their outsourced teams to work on, in order to add an extra layer of security as well accountability for project progress. If the company does not send devices, then outsourced resources set up a separate development environment, which creates a checks and balances system for quality assurance. QA is completed first by the outsourced development team, as well as the remote team lead if applicable. Then, a second round of QA is completed by the internal team before deployment. 

How to maintain accountability: 

Communication and expectations are key to accountability when outsourcing. When working with an outsourced team, it is important to set regular meetings and keep communication channels open in order to discuss project progress and direction. Consistent communication can include Slack, Skype, and Zoom video calls. Additionally, it is vital to have a clear understanding between both parties about project scope, timeline and specific deliverables from the initiation of the project - proactive communication and consistent communication will reduce the risk of misunderstandings, miscommunications and surprise setbacks. 

Regardless of the model, the bottom line for success is to build trust, set clear expectations and project guidelines, and use proactive communication tools between business owners and the software development team.

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