Offshore Website Development: Major Advantages and KPIs
In this article, we will talk about the most popular model of cooperation – the Offshore Development Team. Why hiring an offshore website development company can be an alternative solution to increase the business appearance and what are the challenges of managing an in-house team?
We will give you the main key performance indicators to track the efficiency of an offshore team toward your most important strategic goals.
Let’s start with offshore web development definition and its importance.
What Is Offshore Website Development?
Offshore outsourcing is a business approach where a corporation hires external contractors or whole outsourced teams situated remotely to handle non-core project requirements, such as development. Offshore web development is a part of this strategy that has become particularly popular.
Offshore website development services in general are on the rise: more than 70% of businesses intend to increase their use of outsourcing, according to a study by the National Outsourcing Association.
The advantages are obvious: if your company operates in Northern America or Western Europe, hiring teams from Asian or Eastern European countries will be much more affordable than hiring locally.
Offshore development gives a wide range of IT specialists that can work remotely, but still productive and expertly. It is a full-circle development support, from designing software architecture to technical support.
Benefits of Offshore Website Development Services
Starting from planning, implementing, monitoring, communicating, and finally delivering the completed project before the deadline, the offshore web development team ensures quality at each step.
There are more benefits of offshore website development:
Offshore web development company usually focuses on a few industries and grows a specific expertise tailored to those industries. You might want to partner with web developers who’ve already built something similar, right? They’ll know about potential risks and the latest technological advancements that are relevant to the niche.
Outsourcing companies frequently offer a whole team of developers, designers, testers, project managers, and business analysts. This way, your project won’t be fragmented across different specialists and you’ll always have a holistic view on the progress.
Web developers employed by outsourcing firms frequently function as teams and gain experience of working together, learning how to navigate different parts of projects between each other. With a well-balanced team, your website will be brought to life faster and more effectively.
Outstanding executionof offshore website development team
Due to intense competition, offshore website development businesses are always motivated to maintain an outstanding quality and content management system. Companies that stay afloat will organize clear communication with you and deliver the results on time.
Besides the advantages of implementing offshore development services, it takes a continuous effort to hire and manage in-house teams.
Challenges in Managing In-House Teams
Having an in-house web developers means hiring people locally, onboarding them, assigning them to teams and tasks, etc. This approach considers the highest levels of communication and trust between client and development team, which brings unnecessary worries about its validity.
Here are the major risks to consider that are associated with building teams internally.
Hiring professionals locally can cost you more, and apart from the salaries, you’ll need to pay for office rent, software licenses, and other expenses. With offshore web development, you can find specialists of the same or even higher level at lower costs per hour and don’t have to deal with additional expenses.
It takes a lot of time and effort to develop a professional in-house team, as well as to keep the team motivated, improve their skills, and prevent employee turnover. As we’ve mentioned, dedicated offshore teams cover that part.
Unanticipated sick days, vacations, and layoffs can cause significant delays in project execution. While in outsourcing, a missing team member can typically be replaced by a vendor in a remote team within a few hours.
However, trusting your website development to the external team comes with responsibility for both. There are some issues you should consider to opt for offshore development.
Drawbacks of Hiring an Offshore App Developer
There are the most common of them:
Time zone differences
Due to different time zones, working with a partner from Asia can be challenging for a US-based company. In this situation, you should search for offshore locations with business hours that coincide with your own.
Due to cultural differences, working with individuals from different regions of the world can lead to misunderstandings. This may not be a significant problem if the team has the skills and knowledge you need, but be aware of this aspect in building communication with external specialists.
A lack of proficiency in the English language can cause issues. When talking about possible cooperation, check if the key people from the offshore team can understand you and communicate everything clearly.
Nevertheless there are alternatives of Offshore Development.
Alternatives to and Other Types of Offshore Development
It might be costly and risky to offshore website development and build an internal team of web specialists due to the turbulence of covid and economic recession. These challenges push clients into hiring offshore developers. But there is an alternative to offshore software development.
Whether you are looking for software engineers, designers, project and product managers, QA specialists in one pack, the solution can be to hire specialists using the DT model (Dedicated Team model). This is a personal in-house team, which works exclusively for specific project and offers the same full circle of development.
The success of specific corporate objectives and large, lengthy initiatives are best served by this paradigm. Remote dedicated web developers might work on projects for several clients at once, but they provide all of their attention to the tasks you give them. It might cost more, but still outcompetes in-house web development services.
Both of the methods can greatly increase your company’s revenue, supplementing or even taking the place of an internal workforce. All you have to do is make a decision based on your business needs. But back to the optimal model of offshore devs. What else should you know?
What KPIs to Track to Know If Your Offshore Team Is Helping Your Business?
Now it is the time to give you the main key performance indicators to manage the efficiency of your offshore website development team.
Key performance indicators (KPIs) are benchmarks that allow you to track your progress toward your most important strategic goals. While there are many different sorts of metrics that may be used in businesses, KPIs are objectives that are important to your company’s success. Here are four groups of KPIs to monitor closely while assessing the effectiveness of an offshore team.
Metrics for customer relations
For a company, particularly one that is just starting to establish itself in the sector, finding leads, correctly engaging with them, and converting them into customers are essential.
Customer-focused KPIs focus on customer retention, and satisfaction to provide you with a clear view of how your customer base is performing. Here are some crucial KPIs for customers to keep an eye on:
· Client Lifetime Value (CLV) is the anticipated lifetime value of a single customer.
· Customer Acquisition Cost (CAC) is the sum of all sales and marketing expenses incurred to bring in a new client.
An approximation of client acquisition can be determined by comparing these two customer-focused KPIs. These figures will show you whether you are succeeding offshore to growing clients.
Operational effectiveness metrics
It’s crucial for small- to medium-sized companies to meet all deadlines.
A single small delay might cause financial losses. Customers seek out suppliers who meet their deadlines and keep their word. Hence, pay attention to development time and issue resolution time.
These operational efficiency measurements help you determine whether your remote staff is advancing your goals or preventing them from achieving. The job will be completed on time, and milestone reports will be provided by a competent team.
Metrics for resolving disputes
Working with an offshore team requires constant communication, which is of the biggest significance. You must help someone who may not have the same culture, social structure, or native tongue.
Communication problems are likely to occur in these situations. Measuring changes in managerial staff involvement with subordinates is one of the most common techniques to evaluate this statistic. When strategies for resolving conflicts are effective, there is an increase in constructive involvement and collaboration.
· Analyzing internal conflict resolution is a startightforward way to see how well your outsourcing team is managing things. When your internal activities are efficient, increasing earnings is simpler.
· Open discussions and direct feedback is an advanced but effective way to spot and get rid of bottlenecks. This approach also helps to elevate responsibility for each team member.
Performance metrics for processes
Operational aptitude is measured across the board by process performance measurements. It aids in identifying both your processes’ strengths and weaknesses.
Performance metrics encourage open communication and transparency inside the business. Here are some instances of instructive process performance indicators:
· Return On Investment (ROI) is a metric used to assess an investment’s profitability.
· Indicators of quality are the proportion of sellable products in the total output.
Due to the enormous cost reductions and service enhancements made possible by offshore development, it became a crucial component to the business strategies of the majority of multinational corporations. Moreover, mid-size ventures now have the possibility to take advantage of this approach as well.
Given the intricacy of the web development process, offshore outsourcing poses some risks, but if you find the right team, it’s a great way to achieve goals and streamline your operation rapidly and affordably.