How to Choose the Right Offshore Software Development Company (a mildly unbiased overview)
Of all the great offenders of spam emails—from super slimming diet pills to the ones that promise to cure your hammer toe situation (complete with revolting photos!)—outsourced and offshore software development companies may be the undisputed leader. A dubious honor, indeed.
Which is exactly why you need a reliable expert to lean on—and here we are. TurnKey has helped hundreds of software development companies navigate the rough Offshore waters successfully. We can help you, too.
There are six areas to understand before you begin:
- What are the different types of Offshore software development companies—and what do they do?
- Why should I be picky about which Offshore software development company to use?
- What are the most important factors to consider when hiring an Offshore software development company?
- What are the key benefits and challenges of using Offshore dev talent?
- How can TurnKey turn Offshoring to Yourshoring (and solve all your problems in the process)?
- Some final thoughts.
What are the different types of Offshore software development companies— and what do they do?
There is a lot of gray area within this “offshore software development company” category. We’ve cleared the air a bit in a few recent posts, both here and here. But for the most part, the various categories break down as follows:
- Outsourcing firms are project-based. When you have a certain product or app that needs to be built—or you have a whole function like QA or DevOps that you want someone else to manage—you contract the whole enchilada to an outsourcing development firm. They provide all the management and the people (and then they send you a big fat bill when the project is complete). Outsourcing is usually associated with higher volume and lower quality work.
- Offshore software development companies are used for longer term needs. They’re called Offshore because—you guessed it!—they’re based outside of the United States or Western Europe. Offshore software development companies essentially rent software developers to you. Sometimes the firms help manage their teams and sometimes that’s on you. Either way, most of the time, the developers are primarily loyal to their agency, which means they aren’t fully committed (literally or figuratively) to you. So you’re left to deal with limited flexibility and poor client service. Ugh.
- Nearshore software development firms are the local yokels. Okay, maybe they aren’t right around the corner, but they are close by—generally based in the same or similar time zone as you, the customer. Nearshoring can refer to both Outsource (project-based) and Offshore (long term) models.
- Finally, there is Yourshoring. This is the best-of-all-worlds approach—and it’s what TurnKey does all day, every day. Our model gives you the best of everything. You get the good stuff from Offshoring (access to talent, cost efficiency, speed to market, and more), but none of the pain that comes from dealing with Offshore software development companies (poor client service, lack of control, a team not tailored to the customer, and on and on). There’s more to follow further on in this post, but here’s the gist: Unlike every other firm out there, TurnKey handcrafts fully dedicated software development teams that are built entirely around the needs of the customer.
It may not be rocket science, but it works: Teams that are embedded—both organizationally and culturally—produce much better software than teams built by any other approach. This is the Yourshore way.
Why should I be picky about which Offshore software development company to use?
Come on. You agonize over your shoes. You don’t put just any baseball glove on your kid. You smell the fermented grapes before imbibing. When it comes to things you’re passionate about, you’re unapologetically choosy.
And your product is your lifeblood—this is your company’s main source of revenue we’re talking about here. That’s why choosing the right Offshore software development firm is critical. Get this wrong and your whole company goes wrong. The stakes are that high!
Many customers fall into the budget strap trap, meaning they make a decision based on price alone. Sadly, the truth is that the old adage of “you get what you pay for” is never more true than when using an Offshore software development firm.
The Offshore option is already much lower in cost than Nearshore development, so why would you try to haggle yourself into a 10% discount when choosing one firm over another? Those percentage points could mean the difference between a completely bland, average product and a truly great one. Take this to the bank instead: Don’t optimize around the wrong variable.
What are the most important factors to consider when hiring an Offshore software development company?
We’ve been there with you, bleary-eyed and laden with caffeine. In fact, back when we were building our own SaaS-based software companies, we hired a bunch of different Offshore software development firms to help us create our product. We made a lot of mistakes and endured a ton of pain (so you don’t have to).
In all our dealings with offshore development firms, we found that the following eleven key factors made the difference between working with a good Offshore development company and a horrific one:
# 1. Approach to Client Service:
Sadly, good customer service is a lost art in the Offshore software development business. Many firms are unresponsive (even at the executive level), often taking days to get back to you, especially if a problem pops up. You need a partner who champions your success and always acts in your best interest. Ask yourself this: Can I get the cellphone number of the CEO and can I call them at any hour of the day? If the answer is yes, continue. If the answer is no (which it most likely will be), cut bait and run.
# 2. Shared Understanding of Business Goals:
Many Offshore firms may understand your technical requirements, but we found that few really understand your business needs or what you’re trying to build at the macro level. You need an Offshore dev firm that catches your drift—not one that is hopelessly adrift.
# 3. Dedicated Teams
If an Offshore firm tells you that your team will be fully dedicated to you, take it with a million grains of salt. It’s just usually not the case. When searching for a firm, probe hard around how the agency will guarantee that the entire team is 100% committed to you and your product.
# 4. Best-in-Class Talent
The Offshore development landscape is like a big bell curve. You’ve got really low-level talent on one side, a vast majority in the middle packed with pretty average talent, and then a small minority on the other side that has the top 3% of talent (Spoiler alert: TurnKey is the leader of this top minority group!). Ask your Offshore development firm what process they use to ensure you get only the best of the best on your team.
# 5. Custom Recruiting
Most Offshore firms claim to have found the perfect talent for you, when in fact they’re just clearing their bench—and forcing you to use the developers they give you whether they’re a good fit for your needs or not. Unacceptable. Look for firms that build teams from scratch using developers that are handpicked in the marketplace to match your needs to a T.
# 6. Talent Retention
It doesn’t matter how good your people are if they churn and burn at the pathetic industry-wide average of 40%. Partner with Offshore dev companies that have robust talent retention and management programs in place and watch that 40% dwindle to the single digits. handpicked in the marketplace to match your needs to a T.
# 7. Access to Different Regions
Many Offshore firms only operate in a single region. But if you have varied needs, you may benefit from a variety of regional options. Geographic flexibility is the key to finding the best solution for your specific software development goals and objectives.
# 8. Customer Case Studies and Reviews
Ask clear questions and wait for clear answers. We speak from experience—when we ran our own software companies we often found ourselves with fast talk and crappy developers. It’s not fun. Pro tip: Don’t take anyone’s word for it—always interview the developers yourself.
# 9. Salary Transparency
99% of Offshore software development firms keep what they pay developers a secret which makes motivation and incentivizing impossible for you. Don’t feel bad about asking—and don’t stick around if they won’t share this information with you.
# 10. Security
If you are doing Offshore development the right way—that is, the teams are embedded in your broader development organization—then this shouldn’t even be a question you need to ask, because everyone will be working within your security infrastructure and protocols. Ask anyway.
# 11. Cost
We encourage you to look at this from a different angle. Worry less about how low you can get the cost and instead focus more on what you’re getting—or not getting—for your money.
What are the key benefits and challenges of using Offshore dev talent?
If all of the above sounds like a lot of work, keep in mind that it’s worth it as long as you find the right Offshore software development partner. There are many benefits to this approach including:
- Access to specialized talent that you don’t have in your local market
- Much lower cost overall when compared to hiring the same talent in the U.S. or Western Europe
- Easier scalability over time as well as agility—you can spin up new teams based on the evolving needs of the business
- Greater speed to market for your product development efforts
But as we outlined above, there are many common challenges too, such as:
- Teams aren’t fully dedicated to you, which means you are not in control
- Teams aren’t custom recruited exactly to your needs—you get whoever is on the bench
- High churn of talent (40%!), making it difficult to maintain product velocity
- Lack of salary transparency, making it difficult to motivate your team
- Poor customer service and responsiveness
How does TurnKey magically transform Offshoring to Yourshoring (and solve all your problems in the process)?
The astute reader (we’re talking about you) may recognize that all of the points above foreshadow something big: TurnKey has a model that’s better than all the rest (humble brag).
As former software startup founders, we got burned so many times by offshore firms that we stopped looking for what we needed—the ideal remote development firm—and created it ourselves instead.
We decided to call our model Yourshoring to reflect our focus: We give YOU all the best parts of Offshore development—a buffet of specialized talent, high speed, low cost, and easy scalability – with none of the stale bits.
This is YOUR team—fully dedicated to you. These are YOUR developers—custom recruited exactly to your needs. This is YOUR culture—your teams are embedded inside. This is YOUR vision – your team is working on your roadmap. This is YOUR ideal location—your team is based where you need them, from Eastern Europe to Latin America. This is YOUR combined success.
And then add in TurnKey’s famous white glove customer service and award-winning talent retention program and you’ve got a perfect solution for optimizing Offshore software development.
Some final thoughts…
When you’re ready for an Offshore development team, you don’t want to play darts in the dark and hope nobody gets hurt. Get clarity, ask questions, and use your budget wisely.
The stakes are too high to trust your software development to the usual Offshore development firms. Don’t pay for frustration and don’t trust someone you can’t even get on the phone. Instead, let TurnKey show you a better way.
This one is easy: Call TurnKey. We are the team you can trust, delivering top-notch talent who produce exactly what you need.
Your Offshore dev firm should be transparent, easy to contact, be able to source (and keep) the best talent, and responsive to your questions, needs, and issues.
This depends on what your product is, what your timeline is, and what your specific needs are. Do you need someone who speaks your language and can absorb your culture? Do you have a niche product and audience? Where does your budget top out? Do you need access to highly specialized IT talent? All of these things can dictate where your talent should be based.