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In-House vs. Remote Software Development Teams: Choosing the Best Fit for Your Company

If you’re a software company, you have a few options for hiring developers. You can source, hire, train and manage an internal team locally, or you can find a partner who specializes in offshoring and hire a remote development team.  Like most things in business (and life!), the choice comes down to what your specific needs are and which variables are most important to your success.

What Are Remote Software Development Teams?

Remote software development teams are utilized by companies large and small who are looking to reduce costs of software development services and bulk up on specialty talent. They hire employees around the world (sometimes across multiple continents) to bolster their at-home efforts. 

 

There are two types of remote software development teams: a dedicated development team and an outsourced one.

Dedicated Development Teams

Dedicated offshore development teams act as an extension of your in-house team.  They are 100% dedicated to your product roadmap and are emotionally invested in your collecgive success.  Think of them as just about the same as your in-house team except they happen to live somewhere other than your local region.

 

The plus of the dedicated software development teams is that you can manage them directly without involving third-party intermediaries. However, some dedicated software development services providers prefer their project managers to control the process, which can create obstacles for you (more on that later…).

 

The downside of dedicated team is that they aren’t a good solution for short-term projects since they are meant to be a long-term extension of your in-house resources.

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Outsourced Development Teams

Outsourcing is great for those non-core activities that are more short term or project-based in nature.  This might be building a lightweight mobile app when you are an enterprise company, or building a new feature that you don’t want to burn internal resources working on.

 

The upside is that outsourcing provides a lot of flexibility and is typically quicker than trying to stand up an internal team yourself.

 

But if you decide to head down this outsourcing path, you must be prepared for limited visibility and control over the team, as well as high churn since the outsourcing agency is constantly shifting resources among various clients.

What Is the In-House Development Team, And How Is It Different From the Offshore One?

The in-house development team is exactly as it sounds: these are engineers, developers, programmers, project managers, etc., who build and implement the software solutions but are based locally (either in the home state or home country of the company).  In this respect, you can also call it your “onshore” team too.

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By contrast, an offshore team lives and works in other countries that usually have a lower cost of living (though often not standard of living!).  This allows offshore teams to be more cost-effective than onshore or in-house teams, especially ones based in North America or Western Europe.

 

Best regions to employ dedicated offshore development teams are Eastern Europe (Poland, Ukraine, and Romania are leaders) and Latin America (Brazil, Mexico, and Colombia are top of the pack here).  By contrast, outsourcing –versus offshoring –  is more common in India and parts of Asia (such as Vietnam and The Philippines).

Pros And Cons Of Building Offshore Software Development Teams

Pros Of Remote Software Development Teams

  • Cost efficiency. Popular offshore countries such as Ukraine, Poland, Brazil, Mexico (and more!) tend to offer attractive tax incentives and lower overall salary costs that reduce operating costs for tech companies. As a result, a remote software development team will usually cost you less than the same group of in-house specialists based locally.
  • The opportunity for synchronous and asynchronous communication. Thanks to modern communication tools, you can easily communicate with your remote team members using WhatsApp, Skype, Zoom, and Google Hangouts, among many others. You can harness the power of sync and async communication to make your teammates feel comfortable working remotely and completely connected as a team.
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  • Faster hiring process. Building an in-house development team from scratch often takes months of hard work (and a lot of money). With offshore teams, you can delegate this process to a partner who provides the capital and resources to recruit and onboard your development staff. This saves your startup or company both money and –often more importantly – time since your are bringing an evolved version of your product to market faster.
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  • Greater access to talent. These days, professional talent is spread around the globe, and hiring a remote development team offers a fantastic opportunity to enhance or substitute (if necessary) your in-house development team. Here's a quick example: in Ukraine alone, more than 285,000 software developers speak English well and more than half of Ukrainian engineers have advanced computer science degrees. Why limit yourself to what you can find in your home country when you can easily tap into existing pools of exceptional talent like this?
  • More flexible and scalable. In product development, the name of the game is flexibility; offshore teams can give you this in droves. You can start with a small team of 3 or 4 people to test the waters and scale that up as your product gains traction and becomes a hit. In other words, you can seamlessly hire more software engineers to meet new business needs–or let them go if you decide to pare back your team. Offshore teams give you much more optionality than an in-house team.

TurnKey uses a unique hiring and onboarding methodology that helps us build rock star development teams with minimum turnover.

Call TurnKey today!

Cons Of Remote Software Development Teams

  • Different time zones. Poor management practices can cause inefficient communication between your in-house and offshore teams if your team members are located in other time zones. Nonetheless, there's a benefit from the time zone differences; if your in-house team works on the project for an eight hour shift and offshore developers do the 8-hours that follow, you will collectively deliver your project within less time. This is also super helpful when it comes to technical support teams. In this case, you can ensure the round-the-clock coverage of your customer support department without exhausting your team members with graveyard shifts.
  • Language barriers. If developers don’t speak advanced English, then language can cause significant problems between managers and their developers. This is why it’s important to over-index on English fluency in your development team, even if it costs a bit more.
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TurnKey hires top-notch developers across Eastern Europe and Latin America! Want to have an offshore team that knocks your product socks off?

Call us today!

Pros And Cons Of an In-House Software Development Team

Pros Of an In-House Software Development Team

  • Better understanding. Agile development requires a lot of internal communication, and agile software teams collaborate and iterate their product or feature on a daily basis. Working with your in-house team is easy. There are common and established routines, so it's familiar territory. And everyone works in the same or similar time zone, which helps streamline collaboration.
  • Team spirit and morale. As most members of your in-house team are representatives of the same culture, they better understand each other in everything from cliches to maxims to jokes. Hence, such communication has a more significant impact on the employee engagement level in your company.
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Cons Of an In-House Software Development Team

  • Talent scarcity. The USA had almost one million unfilled technology positions at the end of 2019. Worse, this shortage significantly increased during the COVID-19 pandemic. More than 60% of the most innovative companies are investing in emerging tech, and many have difficulty finding qualified professionals to implement these changes. Staffing an internal development team is not an option for many companies simply because local talent is often too expensive and too hard to find.
  • Higher cost. If you choose the in-house development team, you'll be paying local salaries, which can be two or three times more than offshore teams. Plus you will also need to allocate office space and pay health benefits, both of which are considerable expenses.
  • Slower speed to market. Hiring development talent locally takes much more time than building an offshore team where talent is more readily available. As a result, building your team is slower and thus your product development cycles are longer. The longer it takes to create a high performing team, the longer it is before an updated version of your product is ready to be sold to customers.

Best Practices For Managing Offshore Software Development Teams

Implement a Project Management Tool

The most important thing when managing an offshore development team is to establish clear and concise communication channels.

 

You can achieve this by setting up regular video or audio calls, using a project management tool like Asana, Trello, Basecamp, or simply Google Drive.

Help Streamline Time Management

When developers perform dozens of individual tasks each day, it’s essential that they know where they are in their projects, understand how their efforts affect those projects and stay updated on any changes.  Being mindful of what pieces developers are working on and when their deliverables are due will ensure a high quality finished product.  

Test As Much As Possible

It’s essential to ensure that your software product is ready for prime time by shifting testing and security farther up in the process.

 

This means testing things sooner to identify and fix problems so you don’t have a problem causing a bottleneck later on..

 

Moreover, continue testing after launch to make sure you didn’t miss anything, and be sure to collect as much user feedback as possible along the way.

Automate Application Deployment Approvals

Remote development teams don’t want to spend hours in a change management meeting to get approval for low-risk application deployments.

 

This meeting isn’t the best use of time, but it’s crucial for operational and security teams, who often trace production incidents back to these change approvals.

 

In tandem with operations and compliance leaders, development teams that have implemented CI/CD, continuous testing, and shift-left security practices should explore ways to digitize or automate approvals for low-risk changes. To do that, they can use, for instance, the auto-approve standard changes functionality in Jira.

Combine Sync And Async Communication

Using the right communication channels will reduce stress and keep everyone on the same page.  It is critical that your development team feels emotionally connected to each other, so make liberal use of such communication platforms as WhatsApp, Skype, Zoom, and Google Hangouts.

Build Trust

One of the things that can prevent your remote development team from working effectively is a lack of trust among the group. On-site employees have decades to get to know each other and build trust whereas offshore staff often don’t meet in person.  Thus, remedy this challenge by getting the entire development team face-to-face at least once per year.  Though it can be expensive with travel and logistics costs, it will have a strong ROI that will payoff long after the event.

Achieve the Perfect Balance With Yourshoring

The ideal solution for software development would be to marry the best of both onshore and offshore worlds.

 

Thankfully TurnKey developed exactly this: we call it Yourshoring.

 

Though it looks similar to offshoring, it’s something totally different.   Yourshoring has all the advantages of an in-house team combined with all the benefits of an offshore one.

 

In short, Yourshoring gives you total control of your dedicated team, but also provides you with custom recruiting that helps quicken your speed to market.  And then we focus on keeping your staff happy so that churn never slows you down.

 

High performing software development teams are hard to build–let TurnKey guide the way! 

Ready to put all the benefits of Yourshoring to work for you? We’d love to tell you more about the ideal way to build high quality dev teams.

Call us today!

FAQs

How do you manage remote software development teams?

Remote development teams have become a staple of many startups, but managing them can be difficult. You may not need a physical office for your whole team, but you still need to be able to collaborate and communicate efficiently. Here are some tips for making remote work easier: set up a regular communication schedule, have weekly meetings, set clear expectations and deliverables, and have a shared calendar.

What is the most effective method when working in agile remote development teams?

Like many other management models, Agile depends on effective communication between stakeholders to help solve problems. But when developers are spread across time zones, holding regular, two-way conversations with your team members can be difficult. Thus organizing effective communication channels and methods to make your remote team members feel included is the most critical action you can take.

Does Scrum work for remote development teams?

There is no silver bullet or single methodology that works for all projects and all environments, but some techniques are better than others for remote development work. For example, some of the most successful remote work has been done in the agile method of Scrum. Scrum is an iterative development framework that can be applied across all kinds of projects and environments, whether they're being conducted in person, over the phone, or remotely.

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Jane

Jane Sorokina

Senior Technology Writer

I’m a former science journalist that likes to connect the dots between science and technology.

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