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O U T S O U R C I N GS O F T W A R E

D E V E L O P M E N T

T h e U l t i m a t e H o w - T o G u i d e

E-Book

TABLE OF CONTENTS

I. INTRODUCTION TO OUTSOURCING MODELS A. What Is Software Outsourcing? 5

B. Outsourcing Models 7

C. Cases Where You May Need to Outsource Software Development 11

D. Outsourcing Contracts 13

E. The Benefits of Outsourcing with Extended Teams 18

II. PICKING A PROVIDER A. What Is the Best Country to Outsource Software Development? 21

B. How to Choose a Reliable Outsourcing Partner: A Step-by-Step Guide 26

C. Common Mistakes to Avoid When Outsourcing 31

III. COLLABORATION

A. How To Onboard Your Extended Team 34

B. Remote Working Tips for Ongoing Success 39

C. Setting Up an Extended Team with Zartis in 3 Easy Steps 41

E. How You Can Set Up an Extended Team with Zartis 43

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I. INTRODUCTION TO OUTSOURCING MODELS

A. What Is Software Outsourcing?

So, you are looking to scale up your engineering team and get more blood flowing into your organization. However, for various budgetary, strategic, or logistical reasons, you are not too keen on the idea of hiring new in-house employees. What do you do?

One word: Outsourcing

In case you didn’t get the memo, software development outsourcing is pretty much the best thing since sliced bread. You get to work with highly qualified developers from across the globe and create outstanding products at a fraction of the cost of hiring in-house staff.

However, with so many options on the market these days, finding the right IT provider for your needs can feel like an overwhelming — if not downright impossible — task. At this point, you probably have a ton of questions:

● Is outsourcing even a good fit for my company?

● How do I choose a good software development provider?

● Which outsourcing model would work best for my project?

● What is the best and most cost-effective country to outsource software development? Should I go for a vendor in Asia, Eastern Europe, or Latin America? Is Poland better than Argentina? What about Romania? I’ve heard good things about the Philippines?

The short answer to all of the above questions is that, while outsourcing can give you a considerable competitive advantage, this hinges on teaming up with the right IT services provider. You want a trustworthy partner that will uphold your standards and share your vision, work ethic, and company culture while delivering results efficiently and reliably.

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As for the location and outsourcing model you should go for, that really depends on where you are based, as well as your budget, project type, and overall priorities.

And if you want the long answer, you better buckle up. We have a lot to cover. We’ll start by looking into the most popular outsourcing models. That should give you an idea of which one may be a better fit for your organizational structure and business needs.

B. Outsourcing Models

The first thing you should know about outsourcing is that there are three main outsourcing models:

We’ll define each one in turn and give you a handy roundup of their respective pros and cons.

What Is Nearshoring?

Under this outsourcing model, you delegate specific tasks or entire projects to a software development team based in a nearby country. Typical nearshoring examples would be:

● A U.S. company outsourcing to a third-party vendor in Mexico. ● A customer in Germany delegating work to an extended development service

provider in Poland or elsewhere in Europe.

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< What Are the Benefits of Nearshoring? />

The main advantage of this model is the proximity of the nearshoring partner. The time difference, if any, is typically no more than a couple of hours. What’s more, with your outsourcing provider right across the border, it’s relatively easy to have in-person meetings when needed — and the travel costs shouldn’t make too big of a dent in your budget.

All that makes it possible for the nearshore developers to collaborate closely with your in-house staff in real time. It also allows you to keep a close eye on all aspects of the development process.

Furthermore, nearshore experts are usually more cost effective than domestic ones, and the lower rates don’t come at the expense of credentials or expertise. And speaking of expertise — nearshoring gives you access to a much larger and more diverse talent pool than hiring locally.

Given all that, it should come as no surprise that users of outsourcing services tend to prefer nearshoring over offshoring. 66% of the respondents polled in the PWC Global Outsourcing Survey 2007 indicated a clear preference for nearshore outsourcing.

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What Is Offshoring? Offshoring is very similar to nearshoring — with the exception that the outsourced team is typically located on another continent. Traditional offshoring locations include China, India, Eastern Europe, and various Latin American countries such as Argentina, Colombia, and Brazil.

< What Are the Benefits of Offshoring? />

Offshoring’s biggest advantage by far are the labor costs. The hourly rates of developers halfway across the globe are often significantly lower than those of both domestic and nearshore engineers.

While cost savings have always been a key consideration for users of outsourcing services, businesses have started prioritizing other objectives in recent years, including scalability, enhancing user experience and customer service, and a faster time to market.

However, the COVID-19 pandemic and the economic crisis it brought about have made sure that cost-effectiveness has once again taken center stage. The vast majority of the respondents in Deloitte’s Global Outsourcing Survey 2020 — a whopping 70% — said that cost reduction was their primary outsourcing objective. Back in 2018, cost optimization didn’t even make it in the top five!

With all that being said, offshoring comes with a number of drawbacks, too, including considerable time differences, longer

journey times, and higher travel costs. Depending on where your service provider is based, you may also face more pronounced cultural and language barriers that could result in less-than-effective communication between your in-house and offshore teams.

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What Is Onshoring?

Onshoring is “domestic” outsourcing. It involves the transfer of your company’s software development to non-metropolitan — and therefore more affordable — locations within your own country. An example would be outsourcing development from your office in Central London to, say, Kent.

< What Are the Benefits of Onshoring? />

Migrating some or all of your development from big urban centers to less up-and-coming areas can certainly help curb your expenses. However, the cost reduction will likely be nowhere near that associated with offshoring and even nearshoring. On the flip side, however, you get to benefit from working under the same rules and regulations and a nearly identical work culture. Plus, there will be absolutely no language or cultural barriers.

< Why Is Onshoring More Expensive Than Nearshoring? />

It’s simple, really. Onshoring usually only makes sense for companies based in large and expensive metropolitan areas like London or Paris. In such cases, onshoring to a nearby town could save you (a lot of) money. However, it will still be more expensive than nearshoring to less developed economies such as Spain or Portugal, for example.

Onshoring is also of limited use if you are looking to access a larger pool of international talent. And with more and more companies turning to remote work in a post-pandemic world anyway, the demand for onshoring may well decrease. What’s to stop a software development company from simply hiring engineers directly and having them work from home?

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Nearshore vs. Offshore Software Outsourcing

Which One Is Better for You?

It’s important to note that neither offshore nor nearshore development can offer a perfect solution to your outsourcing needs. Both models have their advantages and disadvantages, and which one would work best for you depends mainly on your budget and project type.

Offshore outsourcing can be a great and cost-effective solution for smaller or one-off projects, and for businesses with a limited development budget.

Nearshore outsourcing generally works better when you are looking to build close, long-term collaboration on more complex projects.

Now that you have a better idea of what outsourcing models there are, let’s look into some cases where you may need to outsource your software development.

C. Cases Where You May Need to Outsource Software Development

When should you get an external software development team?

What are the indications that your company might need additional remote specialists?

To help you answer these and similar questions, we have compiled a list of the five most common telltale signs you could really use an outsourced team:

1. You Are in a Time Crunch

Remember that time when you were in a desperate rush to deliver an important project? All developers on your core team were working at full capacity, and yet you were not making enough progress despite having all hands on deck and the looming deadline. Well, that was a perfect opportunity to get a team extension if there ever was one.

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An external team can be a real godsend when you are pressed for time. Your in-house staff get to take a much-needed breather, and the project benefits from a broader mix of skills. What’s more, the resulting time savings can make all the difference between a fast time to market and failing to meet the deadline.

And the best part is that this solution is incredibly flexible. Once the project is completed, you can quickly and easily scale your remote team up or down depending on your ongoing needs.

2. Your Core Team Lacks Expertise for a Specific Project

Imagine this: you are working on an important project, but your dedicated developers just don’t have all the necessary skills. Perhaps you are looking to migrate a monolith legacy system to a microservices cloud-based architecture. Or maybe you are modernizing your frontend to create SPAs. In any case, your in-house team just doesn’t have what it takes to get the job done.

What should you do?

The solution is obvious: bring in an external team with the right expertise.

The trick here is to have a clear role definition and ensure a fair and appropriate allocation of the work between all team members. Do that, and you will have yourself a real dream team for your project — and you can bet your in-house employees will be in for quite a learning curve. The remote engineers will not only help you achieve your goals but will also work closely with your existing team, transferring their skills and expertise.

3. It’s Not Possible to Hire In-House Developers

There are many situations where recruiting software developers in-house might be difficult or downright impossible.

For instance, there may be a lack of qualified engineers in your area. The talent pool — especially when it comes to highly

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sought-after skill sets — can be rather small, and the market is extremely competitive. Alternatively, local developers may be a tad too pricey for your budget.

The recruitment process itself can also be a deterrent. Hiring, onboarding, and managing teams in-house require considerable resources and operational hassle. Not all companies have that kind of HR and administrative capacity.

And then there is the bureaucracy to consider. In Germany, for example, hiring engineers in-house can take as long as three to six months due to the mandatory notice periods.

In cases such as these, an external development team can give you the talent you need at a fraction of the price, time, and hassle it would take to hire people directly.

4. You Want to Lower Risk and Increase Flexibility

As much as you value your full-time employees, you have to admit they come at a high cost. Permanent contracts require a significant monetary and time commitment, which can be difficult to make in an unpredictable market. You may very well need engineers for a particular project now, but who knows what the future holds twelve months or two years on?

Here is where outsourcing comes in. Remote engineers come with minimal risk and unparalleled flexibility. You can scale your team up or down when and as you need. But more importantly, with appropriate onboarding and internal processes in place, an external team can turn into a seamless addition to your in-house developers: fully integrated in the company and 100% dedicated to your projects.

5. You Are Mindful of Your Budget

Whether you are working on a tight budget, need to make some cuts to meet the bottom line, or simply want to optimize your expenses as much as possible, the remote team model can help a great deal. Of course, that largely depends on where your business is based, but for our clients in the U.K., Ireland, the U.S., or Germany, outsourcing to places such as Spain, Poland, or Portugal is significantly cheaper than recruiting people in-house or searching for local talent.

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D. Outsourcing Contracts

After choosing an outsourcing model, there is one more critical decision you need to make before reaching out to potential providers — the type of contract you are going to be working with. The two most common pricing models in software outsourcing are time-and-materials and fixed-price contracts.

What Is a Fixed-Price Contract?

Fixed-price contracts were widely used in traditional offshoring. Under this pricing framework, the customer and service provider agree on a firm price for the entire project in advance. Any extra work and costs that are not covered by the original agreement are paid separately.

What Is a Time-and-Materials Contract?

Under a time-and-materials contract, the outsourcing vendor bills you for the time (as in actual hours or days) worked plus the cost of any other materials (e.g. hardware or software licenses) used in the process. The time worked includes the work done by the developers, the QAs, the product owner (if applicable), the architect, and everyone else on the dedicated development team.

While you can ask the provider for technical input and advice, it’s ultimately up to you, the client, to decide how many software engineers you are going to need — and for how long. The vendor can only tell you how much those resources are going to cost, i.e., developer X will cost Y EUR or USD per day. Having a detailed roadmap will help with estimating the overall cost.

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Because the time-and-materials model gives you the flexibility to easily scale the external team up or down as your needs evolve, it is quickly becoming the most popular type of project pricing in outsourced development.

Whether a fixed-price or time-and-materials contract would be a better fit for you depends on a number of factors. These range from your budget and product specifications to the complexity and size of the project. In any case, both pricing models have their advantages and disadvantages. Let’s take a closer look at some of these.

Advantages of Fixed-Price Outsourcing

Traditionally, the vast majority of outsourcing contracts would use some form of fixed-fee pricing — and no wonder. There are many benefits to a firm fixed-price contract.

< Predictability />

The predictability that comes with a fixed-price agreement appeals to many business owners. Knowing exactly how much their product development will cost allows them to plan their expenses with greater certainty and better allocate the organization’s

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resources. It also minimizes potential risks and might help some businesses save money in the long term — but not always, as we shall see in a bit.

< Transparency />

Fixed-fee contracts tend to be very thorough. They set out detailed requirements and product specs and often include pretty rigid timeframes for the various stages of the development process. Not only does that ensure a high degree of compliance, but it also helps the outsourcing company and the client agree on a clear (and shared) vision of the final product from the outset.

< Easy Management />

As long as no major surprises come up, the average fixed-fee agreement requires little interaction between the outsourcing vendor and the client. The detailed breakdown of every task and milestone means that the outsourced team will be able to work fairly independently and with limited supervision.

Disadvantages of the Fixed-Price Model

< Rigidity />

One of the main drawbacks of this type of pricing is its lack of flexibility. As time goes by, your requirements and deliverables may change — especially with larger and more complex projects. If you are operating under a fixed-price model, that would mean renegotiating the deal from scratch.

< May Not Be Cost Effective />

Agreeing on a fixed price is great if you are buying a ready-made digital product off the shelf. You know just how much you will be paying and what you get in return.

However, if you are looking to build custom software, your product vision will likely evolve as the development process moves forward. And under a fixed-price contract, you will not be able to make any adjustments without incurring extra costs. In the long term, you may end up paying way more than you bargained for.

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< Limited Accountability />

The day-to-day management of a typical fixed-price project is usually done by the outsourcing vendor. So, if you were hoping to have a tighter grip on the software development process and the quality of the code, this might be the wrong pricing model for you.

Advantages of the Time-and-Materials Pricing Model

Time-and-materials contracts are now more popular than fixed-fee arrangements. Here are some reasons why that might be the case.

< Flexibility />

Time-and-materials contracts are flexible enough to allow you to change direction and amend the product specs and project requirements. You don’t have to stick to the original software project plan — you can modify the work scope as needed.

After the beta testing phase, for instance, you may decide to introduce additional features, radically new designs, or other improvements that were not set out in the initial agreement. This way, you get to involve your future users in the development of the product, ensuring a better customer experience.

You are free to adjust not only the product itself but the method of work, too — from varying the workloads to changing the project timelines and beyond.

< Greater Cost Savings for Complex Projects />

If you are working on dynamic, long-term projects, a time-and-materials contract can give you the ability to tweak your strategy — and even the entire project framework — at much more competitive prices than a traditional fixed-price agreement.

< Agile Project Management />

The flexible and open nature of time-and-materials contracts encourages vendor-client collaboration and cross-functional team efforts. It also allows for the integration of user feedback and preferences in real time. This type of adaptive, evolutionary development and continuous quality improvement is what agile development and strategic outsourcing are all about.

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E. The Benefits of Outsourcing with Extended Teams

Before we get into how-to of picking an outsourcing provider, let’s end this section by discussing what makes a particular type of outsourcing — known as the extended team model — a highly effective software development method.

Getting an extended development team is probably the easiest way to fill in skill gaps in your core staff, build lasting partnerships with brilliant developers, and get long-term projects done quickly and effectively.

But we are getting ahead of ourselves. First things first:

What Is the Extended Development Team Model?

The extended team model, also known as staff augmentation in the U.S., brings together in-house and remote or “extended” engineers and has them working on the same projects. Such long-term cooperation helps you cut costs while benefiting from the skills of additional top-caliber developers.

For optimal cost-effectiveness, extended software teams are often “nearshored” to a neighboring country — or even “offshored” to a whole different continent.

Top 5 Benefits of Outsourcing with Extended Development Teams

1. You Save Time on Hiring While Staying in Control

Does the thought of going through the drudgery of recruiting, training, and onboarding full-time engineers fill you up with joy?

Didn’t think so…

Lucky for you, the extended development model offers a quicker and more streamlined alternative. You get to assemble your dedicated team and have it up and running in no

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time. What’s more, because all project management takes place in-house, you always stay on top of the product development.

2. Cost-Effectiveness

Nothing beats a good bargain.

One of the key advantages of extended software teams is that they are budget-friendly.

U.S. companies with extended teams in Europe can expect to cut their product development costs by up to 40%. And our Irish and U.K. clients with software team extensions in Spain or Poland can save anywhere between 15 to 25%.

What’s even better is that the lower cost does not come at the expense of quality. You can have your pick from an international pool of top-level engineers that have been thoroughly vetted and come with a proven track record of delivering excellent results.

3. Increased Transparency, Trust, and Collaboration

Direct communication, transparency, and trust are an integral part of any successful long-term collaboration — and that’s exactly what you get with staff augmentation.

Because extended development teams work closely with your core stuff, you can benefit from:

● Ongoing and effective communication ● Total transparency around the work being done ● Shared responsibility on the deliverables ● Increased productivity

Furthermore, the two teams complement their skills and exchange knowledge, ideas, and problem-solving techniques.

The result? Not only do you gain a new set of brilliant remote engineers, but your existing employees also get to learn new things and become better professionals.

And that’s not a rare occurrence, either. At Zartis, we constantly see our engineers helping improve the client company. They provide expert advice and organize various trainings on topics ranging from architecture and DevOps to process improvements and more.

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4. No Setup or Operational Hassle

Compared to standard recruitment, the extended development team model requires little to no operational hassle.

With most of the work done remotely, you don’t have to worry about:

● Payroll and employee benefits ● Buying equipment ● Setting up physical workstations ● Renting and maintaining an office space ● Enabling a home-office setup ● Looking after tech support

What’s more, you don’t have to do all that in a location and jurisdiction you are not familiar with. Your outsourcing vendor will take care of all that, allowing you to focus on what you do best — growing your business and bringing value to your customers.

The only thing you need to do is assemble the remote team and ensure they have access to the software and information systems they will need to do their work.

5. Faster Time to Market

In addition to saving a substantial amount of time on recruitment and setup, you also get to speed things up by allocating additional resources to your project. By sharing and distributing tasks among themselves, your engineers will get more work done in less time.

But that’s not all. One of the major benefits of having an extended development team is that your remote engineers will not be juggling a handful of different projects, which is often the case with outsourcing. As a result, the team will be dedicated to and fully invested in your project — and will get things done quickly and efficiently.

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II. PICKING A PROVIDER

A. What Is the Best Country to Outsource Software Development?

Is there an ultimate best country to outsource software development?

The short answer is “No”.

The longer answer is that it all depends on your specific needs. Two key factors you need to consider when looking for your perfect outsourcing match are:

1. Your Preferred Outsourcing Model

Do you need remote engineers that can work closely with your core staff? If so, you should opt for nearshore extended development. This model allows for the seamless integration of your in-house and remote teams. In that sense, it is best suited for outsourcing projects that require tight collaboration and communication in real time.

In contrast, if you are looking for programmers to work on fully independent projects with minimal supervision on your end (and different time zones aren’t an issue), offshore development might be a better fit.

2. Your Budget

The tighter your budget, the more attractive traditional offshoring destinations will be. Think China, India, the Philippines, Malaysia, or Eastern Europe.

That said, the last few years have seen a real surge in the numbers of affordable yet highly qualified engineers based in Central and Western Europe. Our clients report the highest return on investment and product quality when working with extended developers from countries such as Spain, Poland, Portugal, and the Czech Republic.

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Our Verdict: When it comes to choosing an outsourcing destination, there is no one-size-fits-all solution. Depending on your geographical location, time zone, technical needs, and team set-up, the country (or countries) that would fit your needs best would be different from someone else’s.

However, while you can find good developers anywhere in the world, the reality is that some countries will be better overall than others.

At Zartis, we have decided to operate in Spain, Poland, Portugal, the Czech Republic, and Brazil . The feedback from our clients has been unequivocal. The engineers in these outsourcing destinations have world-class technical skills, specialized STEM degrees from some of the world’s top educational institutions, and English proficiency.

< SPAIN />

Tech talent in Spain is abundant. In 2017, the Iberian country boasted a whopping 268,149 professional developers — and they are not your average developers, either. According to the SkillValue IT Ranking 2019 report, Spain ranks among the world’s top seven countries in terms of developer skills.

And when you factor in the much shorter notice periods required by local legislation compared to other jurisdictions such as Germany — which allow you to build an extended team in no time — it’s no wonder why so many businesses are looking to set up an extended development team in Spain .

Source: Statista.com

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< POLAND />

With its 254,682-strong developer cohort (not counting the 15,000+ new graduates that enter the local software development market every year), Poland’s tech industry is just as vibrant as that of Spain. In fact, the Polish IT sector makes up nearly one-fourth of the entire developer population in Central and Eastern Europe. Poland is therefore ideal not only for offshoring but also for nearshoring projects.

But there’s more. In 2016, HackerRank placed Poland among the top three countries with the best software developers, ranking only after China and Russia. And if we look at HackerRank’s score breakdown per skill set, we’ll see that Polish engineers brought home the first-place trophy in the Java competition. They also got the second-highest score for their skills in algorithms and Python and ranked fourth in the tutorials, Shell, and Ruby competitions.

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Source: Hackerrank.com

< PORTUGAL />

Portugal may be smaller in size than the likes of Spain and Poland, but it is a hidden gem in terms of developer talent — and a serious contender for the title of the best country to outsource your software development.

The Portuguese software market is expected to reach 957.9 million USD by 2021. Lisbon, in particular, has turned into a real tech hotspot in recent years. In 2019, the capital city’s greenfield foreign investments in software and IT reached a record high: 10 projects were valued at 75m USD .

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What’s more, Portugal can serve as a gateway to a much bigger market: Brazil. Aided by their common language, many Brazilian programmers move to Portugal in search of more exciting career opportunities.

< CZECH REPUBLIC />

With some 200,000 people working in the local ICT sector (and a 27,300-strong cohort of ICT graduates), the Czech Republic is Central Europe’s hidden gem for outsourcing software development. HackerRank placed Czech developers at number nine in its global ranking. The country’s tech talent also scored fourth in security and second in the mathematics competition before snatching the gold medal in Shell. But there’s more: SkillValue ranked Czech developers second in Europe .

Clearly, Prague is a good place to be if you are thinking of developing software. Technology giants like Google, Microsoft, IBM, RedHat, and Skype have already opened the floodgates by choosing the Czech Republic for both direct investment and outsourcing.

< BRAZIL />

With the world’s ninth-largest software industry , Brazil is a massive market and one that we are eager to explore. The national IT sector grew by 9.8% in 2018 alone and reached $46.6bn in investments, which amounted to more than twice the predicted growth. And with around 5,294 software development companies currently operating there, businesses interested in outsourcing will have plenty of options to choose from.

Still not sure which location would fit your software development project best?

Here are some rules of thumb.

Is your company based in Northern or Western Europe? Then the chances are that the best country to outsource your software development is Spain, Poland, or Portugal. You

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will get to benefit from the relatively shorter notice periods and lower average salary. Perhaps more importantly, direct communication will be guaranteed, as you’ll be looking at a time difference of no more than a couple of hours — if any.

And what if you are in the United States? As long as working across different time zones isn’t an issue, a remote team in Europe or Brazil could likewise bring a lot of value to the table. The developer rates will be considerably lower than in the U.S. And then there is the unsurpassed competitive edge that comes with being able to operate 14+ hours a day. With your teams spanning the Atlantic, there always will be someone online to address issues as they arise in real time.

B. How to Choose a Reliable Outsourcing Partner: A Step-by-Step Guide

In this section, you will find a detailed roadmap of how to go about the selection process when you are speaking with multiple providers and trying to decide which one would fit your company best.

STEP 1: Find Out Which Outsourcing Model Fits Your Company Best

Consider your project type. Nearshoring and onshoring are ideally suited to complex, long-term projects that require direct communication and close cooperation with your in-house team in real time. In contrast, offshore software development is a perfect fit for projects that require looser collaboration .

STEP 2: Shortlist Potential Service Providers

Where do you find them? A good place to start is through networking. Reach out to people from the tech industry. Ask them if they can recommend any good software outsourcing companies.

Another simple tool to use is Google. Look up specific topics that you need help with, say, modernizing legacy software or mobile applications development. Then, narrow

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down your search to companies that have expertise in that line of work. If you already know the countries or areas where you would like to outsource your development, look for the best providers in those countries.

How do you know which IT outsourcing companies are good enough? Common telltale signs to watch out for include:

● Relevant industry experience ● Verifiable case studies ● Certifications ● Industry awards ● Security posture ● Client and employee ratings on sites like Glassdoor

STEP 3: Qualify Shortlisted Providers by Asking the Right Questions

Before making your final selection, you should gather information on the providers’ business model, developer expertise, and ongoing project implementation. To make sure nothing falls through the cracks, we have prepared an overview of the most important questions to ask yourself and the service provider.

< Business Model />

Q: Does the outsourcing company look like a good fit for your specific business needs and development projects? Q: If not, can they tailor their services (outsourcing model, collaboration model, team size, etc.) to meet your requirements?

In software development, needs change all the time, especially in today’s highly competitive and innovative market. A good outsourcing vendor is flexible, cooperative, and looking for ways to deliver a solution that makes you — the client — happy. As long as your request is reasonable, it is always a good sign when a potential partner is eager to provide you with what you need.

In contrast, you should consider it a red flag if the service provider’s internal processes seem too rigid and there isn’t much room for introducing change quickly.

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< Developer Expertise />

Q: Do the software developers have the expertise you need? Q: Are they experts on the tech stack you’re using?

When evaluating prospective outsourcing partners, you should always check that their software engineers are up to par and have the specific technical expertise you need. After all, the developers are the ones who will be working on your product on a daily basis, and the success of the outsourcing partnership relies largely on how well they do their job.

A good tip is to Google specific areas you need help with, such as modernizing legacy software or mobile applications development. Then, narrow down your search to companies that have the specific industry expertise.

Q: Have the developers worked on similar projects in the past? Q: Do they have a history of successful collaborations with companies similar to yours?

It’s always a great sign if your shortlisted service providers have already developed software or worked on projects similar to yours. This way, you can eliminate the downtime of getting acquainted with the needs and specifications of different industries or technologies. So, in the discovery meetings, be sure to ask the providers to share case studies or success stories , client testimonials, or any references they may have.

Q: What’s the outsourcing company’s approach to recruitment?

A good question to ask is how they’re recruiting new team members. What is their process? Is it rigorous enough? Do candidates take a test or peer coding challenge to showcase their coding skills in practice?

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Q: Do the engineers have access to opportunities for continuous education?

The speed of innovation in the tech sector is second to none compared to other industries. A team that stays on top of new technologies and the latest versions of existing software will be able to develop sustainable and modern products that serve well beyond today. Having learning opportunities and training tools in place means the outsourcing company actively promotes a culture of continuous learning.

< Project Implementation />

Q: What is the service provider’s estimated timeline for project kick-off? Q: What is the service provider’s security policy? Q: Are they GDPR compliant? Q: Does the extended development team have all the equipment it needs to do the job?

More importantly:

Q: What are the mechanisms to ensure the success of your collaboration?

Building great software is only half the challenge. The other half is to make sure you have system checks and fallback plans in place to ensure you can keep building great software without interruptions.

When it comes to ensuring success, your outsourcing provider should enable knowledge sharing across both companies. What are the communication structures in place for technical and business queries?

More importantly, on the off chance that something goes wrong, how are any potential issues going to be handled? There should be a clear problem-solving process in place.

If the employee retention rates of the provider are low, this could affect the efficiency of the collaboration as well. You should check how they plan to ensure the stability of the team, so that engineers are not joining and leaving your project on a frequent basis. A good outsourcing provider will have the right processes in place to keep engineers happy .

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Additionally, checking Glassdoor can give you a good overview of the overall satisfaction of the employees within the company, which is often a reliable indicator of retention rates.

Last but not least, don’t forget to also keep an eye out for the cultural fit and be sure to ask about the company’s vision and values.

STEP 4: Selection and Continued Collaboration

It’s now time to make your final choice from among your top candidates.

It shouldn’t be too difficult: just remember, a good outsourcing partner is flexible and cooperative. You should also watch out for the technical expertise and cultural fit and the engineers’ dedication to your project.

Finally, don’t forget that you will end up spending a considerable amount of time with the provider you choose. What’s more, the future of your product lies, to a great extent, in the hands of your remote software development team. So, make sure you can trust them and are happy to work with them long-term.

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C. Common Mistakes to Avoid When Outsourcing

When it comes to outsourcing, knowing what kinds of questions to ask will only get you so far. To set yourself up for success, you also need to know what not to do. Here are some all-too-common mistakes you should avoid.

5 Common Pitfalls to Avoid When Looking for IT Outsourcing Services

1. Choosing the Wrong Partner

How do you make sure your outsourcing services vendor is a good fit?

Here is a brief recap if you haven’t read the previous section:

● Ask the right questions (see which ones here ). ● Carefully assess the developers’ technical expertise.

● Have a strict due diligence process.

● Request (and verify) references and case studies. ● Don’t overlook the importance of the cultural fit. Transparency, trust, and open

communication are crucial, especially when things — inevitably — go wrong. ● Prioritize security considerations. Does the provider have ISO/fallback plans and

data protection systems? ● Finally, don’t forget that going cheap can sometimes be more expensive. The

goal is to look for a balance between high-quality developers, a good cultural fit, and a budget-friendly service. Hiring a mix of senior and junior professionals is a great way to get the skills you need while still meeting your bottom line.

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2. Not Drawing Up a List of Discrepancies/Differences

Your company and your outsourcing provider are two separate entities. There will be discrepancies in the way you operate. If you don’t know what these are in advance, you will face challenges in the first days, weeks, and even months of your work together.

To avoid that, identify and address any differences well ahead of time. Areas of potential friction include:

● Hardware needs ● Communication software ● Working hours ● Public holidays ● Approach to project management

3. Poor Onboarding

Some of the hallmarks of subpar onboarding include:

● No clear role definition. You must ensure that your new team members know exactly what is expected of them and who they can turn to for help or information.

● No clear workspace definition. Do the remote developers have to create personal accounts or employee profiles? Is there any software they need to install? Should they join certain groups? Is there hardware that needs setting up? Make a checklist of everything your new team members would need to do to hit the ground running — and be sure to review and update the list over time.

● No product overview. All team members — old as well as new — must have the same understanding of the product they are going to be working on.

● No in-depth introduction of the business. Take the time to explain to your new developers what your company does and what its various departments are. Introduce them to your other staff members and clarify their responsibilities. Go over your main clients and cost structure.

● Not setting aside enough time for onboarding. Proper onboarding takes time. Don’t rush it and don’t overwhelm your remote team with too much information or too many expectations right off the bat.

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4 . Failing to Address Knowledge Gaps Early On

You will make the most of outsourcing if you identify and address any knowledge gaps in both your in-house and extended developers as soon as possible. Then, set up systems for the two teams to learn from each other and exchange knowledge, solutions, tools, and resources. It’s also a good idea to organize training sessions or request your outsourcing provider to do that for your extended team.

5. Not Pursuing Long-Term Collaboration

The longer you work with your outsourced team, the better they will get to know your product, company, and team culture. This is an invaluable resource, and you want to use their expertise to the fullest — and maybe even go beyond the scope of the original project. For instance, you may consider having your extended developers onboard and mentor junior engineers or brainstorm innovations and new solutions.

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III. COLLABORATION

A. How To Onboard Your Extended Team

So, you’ve finally assembled a stellar team of software developers. Don’t be quick to pat yourself on the back just yet. Hiring talented employees is only half the work. The real challenge is retaining them, and your chances are pretty slim if you don’t know how to onboard software engineers.

Onboarding software engineers poorly results in lower employee morale and engagement, reduced productivity, and high turnover rates. In contrast, a well-thought-out onboarding plan significantly increases new hire retention, workplace efficiency, and your overall return on investment.

The Consequences of Poor Developer Onboarding

1. Lower Developer Engagement

As soon as a new hire joins your company, it is not only them that are on trial — so are you and your entire team. And if you don’t know how to keep developers happy, they will leave for greener pastures.

A high-quality onboarding process is essential for your new engineers to feel engaged. According to this 2001 Aberdeen Group study , organizations with a standardized onboarding process reported a two-fold increase in new hire engagement.

This matters: lower engagement levels result in reduced morale, increased stress, and a lack of trust among developers. Furthermore, according to Gallup, disengaged staff are 37% more likely to be absent and have 15% lower profitability. Overall, you are looking at losing some $3,400 for every $10,000 your disengaged employees make!

And yet, in a study of 350+ organizations , Kronos and the Human Capital Institute found that nearly a quarter of companies had no onboarding process at all . What’s more, a

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whopping 76% of the surveyed HR professionals thought their organizations underutilized onboarding.

2. Reduced Productivity

New tech hires need around eight months to hit maximum productivity. That’s bad news considering 23% of them quit within their first year on the job.

However, most ex-employees leave for reasons that could have been addressed at the onboarding stage. In most cases, that involves providing more effective training, clearer guidelines, and a friendlier environment. In fact, the Aberdeen Group found that standard onboarding leads to a 54% increase in new hire productivity.

Subpar or nonexistent onboarding is also linked to higher stress levels among employees. Your new software engineers will be anxiously struggling to find their way around on their own and process all the information that was — or wasn’t — thrown at them. But that’s not all: one million U.S. workers miss work each day due to stress. For businesses, that translates to an annual loss of around $602 per employee.

3. Lower Developer Retention Rates In the general employee population, nearly 33% of new hires begin hunting for new jobs within six months.

That’s a problem!

As an employer, high turnover — especially when it comes to software engineers — is the last thing you want. You don’t need us telling you it takes a lot more time and money to hire new developers than to keep them.

The typical cost of turnover in the U.S. is 21% of an employee’s annual salary . That figure can get much higher when it comes to jobs that require highly specific skills — like senior systems architects, lead engineers, or full stack developers.

The good news?

According to this 2015 report by Glassdoor , organizations with strong onboarding protocols increased their new hire retention by 82%!

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The Benefits of Proper Developer Onboarding

To say that every hour you invest in your developer onboarding process will pay off is an understatement. A high-quality onboarding process:

● Attracts talented software engineers ● Helps to keep them around ● Ensures new employees have everything they need to become top performers

from day one ● Builds rapport between new and old staff ● Improves communication between engineers and management ● Engages new hires and aligns them with the company’s mission and culture

A typical onboarding program lasts about a week. However, for best results, you want to dedicate a good three months to the process. After that, you should check in on your engineers and provide follow-up training and support throughout their employment.

How to Create a Good Onboarding Process In 10 Easy Steps

1. Introduce the New Team to Your Technical Environment

See that your new hires have all the hardware and software licenses they might need. You also want to ensure they are familiar with the full tech stack they will be using, as well as the documentation, code review, and deployment process you have in place.

Next, make sure they have access to all the necessary resources, with accounts for every system or product as needed. These might need to get set up in advance, so plan ahead.

Also, don’t forget to go over the specific work methodology your development teams are following. Is it agile or waterfall? Scrum or Kanban? Do you have stand-ups, and if so, how often and in what format?

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2. Outline the Action Plan

First, make sure your new employees understand each and every responsibility in their job description. Then, make clear what you want them to achieve within their first week, month, and quarter on the job. As you do that, be sure to set objectives that are specific, measurable, realistic, and time bound.

3. Get Clear on the Constraints Whether they are constrained by a budget or need to request approval for specific tasks or decisions, all employees must know exactly where their limits lie.

4. Explain the Communication Channels Your new software engineers need to know how — and when — they can reach everyone in the organization. You should also let them know when and how to report on their work and if there are any meetings they should attend.

Last but not least, make sure they are up to speed with any communications tools your organization is using, e.g., Slack, Zoom, Microsoft Teams, GitHub, etc.

5. Introduce the Team Introduce new hires to all other staff members, not just the engineering team. Let them know what everyone’s name is and what it is that they do. More importantly, make sure your extended developers have met everyone they would be working with directly.

Don’t forget to also include the new hires in all relevant team meetings going forward. This could be as easy as forwarding calendar invites or inviting them to Slack channels.

6. Explain the Company Culture New team members should know what the values of the organization are and what behaviors will not be tolerated. Explaining the team culture early on will give your remote staff a good idea of what to expect and help them internalize the company ethos.

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7. Paint the Big Picture

Explain the company’s mission, strategy, and broader goals, as well as how the new team fits into the larger scheme. Don’t forget to discuss the financial side of things, including the company’s funding, your business model, and sales.

8. Talk About Their Career Progression

It is also important to discuss your new employee’s career path and their vision for the future. Are they hoping to land a managerial position one day? Learn a new code base, software architecture, or programming language? Would they like to become a Product Manager, Tech Lead, CTO, or start their own business? You want to commit to providing your software engineers with opportunities to achieve their long-term goals.

9. Provide One-On-One Mentoring

If possible, assign personal mentors to your new hires to guide them and track their progress.

10. Do Not Conflate Orientation with Onboarding

Orientation is about helping your new software developers find their way around the building and their workstation and getting up to speed with the office rules and any paperwork. While an orientation program is critical in its own right, it is not a substitute for comprehensive onboarding.

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B. Remote Working Tips for Ongoing Success

At Zartis.com, we have been running a remote-oriented tech engineering organization with 150+ developers for years. Today, our successful remote culture is the backbone of our software delivery model.

We have put together a handful of helpful insights from our experience in managing remote development teams, along with information gathered from software developer interviews.

1. Use the Right Tools to Enable Remote Work

Slack , Google Chat, or a similar messaging platform is essential. Instant messaging tools are essential for distributed development and product teams. They have add-ons for source code sharing, whiteboards, shared documents, asynchronous communication, and video chats that enable spontaneous collaboration between remote virtual teams. This helps make your development process swifter — especially when developers can communicate in real time across both mobile and desktop apps across all operating systems.

Zoom , Highfive , Microsoft Teams , or any other reliable tool for conference calls and screen sharing is also a must. You should also invest in a high-quality VPN and centrally-managed equipment as security measures .

2. Set Up a Good Communication Process

Maintaining an open and inclusive company culture with public communication of any changes is critical. You should complement your internal communication tools and casual banter with a curated public digital forum such as Slack where everybody can ask questions and contribute their perspectives. Don’t forget to make sure everyone has access to all communication tools and channels.

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3. Encourage Transparent Decision-Making

Ensure that you always include all team members, whether in-house or remote, in all relevant discussions and that your decision-making process is transparent. You could meet online in a virtual room to discuss problems, explore problem-solving approaches, or demo the final solution with screen-sharing features. Collaborative project management tools and cloud-based software repositories like GitHub can greatly enhance the software development process by allowing small decisions to be taken transparently, in real time.

In cases where someone is unable to attend a meeting or a decision has been made between two engineers face-to-face, be sure to disseminate the information to the rest of the team as soon as possible. You should also consider any time zone differences and set the meeting times when all team members are online. While you may not be able to always cover all time zones and fit everyone’s agenda, making the effort goes a long way.

However, watch out for over-communication. Not every decision and online meeting requires the participation of every single team member. So, consider appointing team leads and involving only them in the discussions. They can then relay any important information or decisions to the rest of the team.

4. Foster an Inclusive Atmosphere

A well-planned out and thorough onboarding process is essential for building a positive and inclusive work environment. This will plant the seeds for productive long-term collaboration within the team and ensure your new engineers can hit the ground running.

It’s also good business practice to organize in-person events from time to time. The occasional face-to-face interaction can really help a remote team work more effectively over the long-term, as it promotes rapport and a sense of belonging to the company. Team-building exercises , in particular, can help bring your staff closer together by building stronger bonds and a more collaborative environment similar to an in-office setting. So, consider holding offline meetings, team-building events, or retreats at least once a year.

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C. Setting Up an Extended Team with Zartis in 3 Easy Steps

Setting up an extended software development team is a highly effective solution to overcome the difficulty of hiring software engineers locally. At Zartis, we’ve helped multiple companies in Ireland, the U.K., Germany, the United States, and elsewhere to build world-class extended development teams in Europe.

Here is how we set up nearshore and offshore development teams for our clients in 3 simple steps:

Step 1: We Get to Know You and Your Software Project

Our first step is to learn more about your company and business goals. We want to know what makes your company tick. We want to find out what’s great about your culture and the technology you are building, where you see your business going in the next few years, what your business model is, as well as anything else that could help us assemble the best remote team for your needs.

We will also be asking you a lot of questions about the software project you need our help with. What is the tech stack you’re using? Are there gaps in the expertise of your existing team? Where do you expect your product development to be in one year or in five? Do you need to up your web development game or build better mobile applications?

Asking you these and other questions helps us tailor our solution to your specific requirements and be the development partner that meets your needs across the board. Choosing a nearshore partner is a decision that can greatly affect your business objectives in the long term. Therefore, we want to make sure we are the right nearshoring partners for each other before we set sail.

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Step 2: We Take Over Solution Design and Deployment

After the initial exploratory phase is over, we roll up our sleeves and start designing the best software development path for your needs. That includes the technological expertise, team size and structure, team location, office requirements, and more. This is our extended team as a service model, so you get to define all requirements and deliverables.

When we are both confident that we’re set up for success, we’ll work with you to map out what the software development process will look like.

We then set up a recruitment process customized to your needs, from the technical tests to the technical interviews. Our senior engineers and CTO personally conduct all interviews with the candidates. We sift potential candidates not only based on their coding skills but also the cultural fit and their grip on modern software development practices, such as agile development methodologies, DevOps, cloud savviness, microservices, PWAs, UX/UI, and more.

You only see the very best candidates who have passed the process and we would recommend hiring. You always have the final say on who joins your team.

Step 3: We Take Care of the Set Up and Ongoing Management

Finally, we send out job offers to the selected candidates and manage their contracts of employment. We see that all contracts are signed and the team is set up and ready to start working.

But that’s not all: we also oversee the ongoing project management. We take care of the office and equipment set-up, security, and payroll services. We also make sure that all local health and safety regulations are being followed, and we even see that the coffee machine is working!

By taking over all the day-to-day issues that usually arise when managing remote teams, we enable you to focus on technical productivity instead of worrying if there is a fire extinguisher in the office. We take care of everything and send you a single transparent monthly invoice. That frees you up to focus on what really matters: your core business and developing great software .

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D. Zartis Outsourcing Case Studies

In the preceding sections, we mapped out the entire software outsourcing process, from definition and project ideation to the selection and ongoing management of outsourcing providers.

However, we know that actions speak louder than words, which is why we have drawn up this list of real-life case studies. These are all outsourcing projects that we at Zartis have developed for our clients — and the feedback has been overwhelmingly positive.

< FEXCO />

Fexco is Ireland’s most successful privately held company, pioneering Fintech solutions and business services for customers around the world. They employ 2,500+ team members in domains such as international payments, asset finance, outsourcing services, and currency conversions.

The Challenge: Fexco was looking to develop new software applications and replace some legacy software. However, the company was having difficulty finding highly-qualified software professionals locally and partnered with Zartis to set up an extended development team in Spain.

The Results:

1. A Modernized Tech Stack

Zartis assembled a team of full-stack developers who migrated a mature application from a monolithic, on-premise solution to a new cloud-based software using Microsoft Azure and a microservices architecture. The new application was written in Java, using Angular for the frontend, as well as Ansible and Jenkins.

This was one of Fexco’s first forays into the world of cloud, and they leveraged our developers’ expertise in Azure, modern software architectures, and web applications.

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2. A New Central API

From there, we moved on to one of Fexco’s key priorities: developing a Central API. We started the project by defining the software delivery lifecycle, quality controls, and other processes. Next, we introduced an entirely new technology stack — Golang, Scala, Kubernetes, Helm — along with a new architecture. This way, the Zartis extended development team helped accelerate the creation of Fexco’s Central API.

3. Cutting-Edge Software

Our third project with Fexco consisted of using the Central API, Electron, and Angular to rewrite a monolithic application and migrate it to the cloud. A further ongoing project involves leveraging the Central API for a digital signature project using a micro-frontend, Angular, Scala, and Go.

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< KALUZA />

An OVO Group company, Kaluza is an intelligent platform ecosystem powering the future of energy. From revolutionising billing to smart electric vehicle charging, Kaluza’s technology is empowering some of the biggest energy suppliers to serve their millions of customers better.

The Challenge: Kaluza works with multiple technologies including Go, Javascript, Kafka, and distributed microservices. For their new project, the company required highly skilled software engineers who could not only hit the ground running but would also proactively contribute to new product development. Some of the main technologies required were React, ES6, NodeJS, Typescript, GraphQL, Go, Python, microservices architecture, Kafka, and cloud technologies.

The Results:

1. Team Extension

Zartis was able to quickly assemble a team of four senior, Spain-based engineers with the required skills. To do that, we had to increase considerably the size of one of our teams in a very short span of time.

2. Remote Work Set-Up

Our developers pitched in their expertise in effective remote working. Working together, the Zartis and Kaluza teams were then able to set up processes and ways of working that optimized remote collaboration. This included establishing proper communication channels to ensure everyone is kept in the loop.

3. Tech Stack Upgrade

The Zartis developers contributed with their expertise in state-of-the-art technologies like Go, React, NodeJS, and Typescript, as well as across a range of initiatives including product development, PoCs, reduction of technical debt, and other innovations.

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E. How You Can Set Up an Extended Team with Zartis

At Zartis, we specialize in putting together world-class extended teams from our European software development centers in Spain, Poland, and Portugal. We work with clients in the U.S., the U.K., Ireland, Germany, and beyond.

Step #1: Defining the Challenge

First, you tell us what you need. You let us know what your goals are and what budget you are working with. We’ll meet you right where you are — and help you get where you want to end up.

Step #2: Creating the Action Plan

Next, we draw your personalized action plan, factoring in all aspects of your business and the specific software project you are working on.

Step #3: Enable Success

Finally, we pair you with the best extended developers for your needs that will get the job done. We can also help you with the project timeline and ongoing management. If you are interested in exploring retainer options, we would be happy to assist with that too.

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Want to Explore Your Options?

Get in touch now and our experts will get back to you shortly to discuss how Zartis can help you assemble a high-performing extended team and take your business to the next level.

More On Our Services:

Extended Development Teams

Technology Consulting

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