Best Practices to Attain Success with Offshore Software Development Zerone Tech Team


Offshore software development offers numerous benefits for businesses worldwide including financial advantages, access to cutting-edge technology, and flexibility in project execution. What are the steps your business should take while planning to engage in offshore software development? How the offshore development partners can enhance their services? Read this white paper to know more.


Offshore software development or offshore software engineering started gaining popularity in early 90s due to the widespread adoption of internet and access to improved communication channels. Today, the practice of offshore software development is mainstream, and many companies have managed to reach this stage by learning it the hard way.

If you are planning to partner with an offshore software development vendor for the first time, it’s possible that you might have a lot of questions about executing your plan and processes properly. Businesses as well as their offshore partners need to implement and follow clearly defined practices and principles to make their efforts successful.

Since our inception, we have been practicing offshore software development, and have learned a great deal from our experience. This white paper sums up our thoughts on the best practices that can help you attain success with offshore software development.

Why many offshore development efforts fail

According to a recent study by Deloitte (Global Outsourcing Trends Survey), 69% of all offshore development deals fail, either completely or partially. There are many incidents of offshoring going wrong in the past. Few years ago, the check-in and online booking system of a leading international airlines operator faced a 21-hours outage that affected a lot of passengers and delayed hundreds of their flights. This massive disruption occurred when the IT system developed by their offshore vendor failed to support the airlines’ operations.

Only if you have a proper understanding of the challenges in offshore software development, you will be able to overcome them with a streamlined plan.

Barriers to successful offshore software development

  • Customer has unclear goals:

    This is by far the most common challenge that offshore teams face while working with customers abroad. Unclear stakeholder expectation is a common problem in both offshore as well as in-house projects. It is important to define clear objectives and expectations that fall within the scope of offshore software development.

  • Difference in expectations:

    What ‘good’ means in one country or one organization may be different from the other. This impacts several aspects of software delivery such as quality, security, and user experience. Differences in expectations could be due to inadequate documentation, lack of communication, organizational differences and so on.

  • Inadequate understanding of business domain:

    Lack of understanding of the business objectives by offshore team affects the delivery of smart solutions. Many businesses underestimate the value of domain knowledge in software development. Transferring domain knowledge across another organizational boundary can be challenging. With most of the offshore teams functioning remotely, it will take time for the resources to gain a good understanding of your domain.

  • Difference in language and culture:

    Cultural and social barriers impede smooth interaction between the customer and the offshore team. While dealing with an offshore team member of a foreign culture who speaks a different language, it may be difficult to unwind until a comfortable rapport is established. Understanding different cultural nuances, body language, and emotional responses are difficult over phone or email.

  • Conflict in working hours:

    This is one of the most obvious challenges. If the offshore team and the customer belong to different time zones, there will be only one or two overlapping working hours per day, which could affect the quality of work, timelines of delivery, interaction etc.

  • Inadequate methods of communication:

    Increased communication overhead is a reason for daily frustration in offshore development. Several times, the customer will have to communicate with the offshore team via a ticketing system, and experience technical difficulties while connecting through telephone or other tele-calling applications. Using multiple sources to communicate with offshore team can also misguide both the parties.

Overcoming the challenges in offshore development

  • Align customer goals with the offshore team:

    Customers should share with the offshore team a clear vision of their business objectives, what they want to achieve and what they expect from their engagement with the offshore team. In a dynamic business environment, project requirements might change from time to time. Hence it is important to align customer’s goals and expectations with the offshore team by making effective use of communication channels available. Supplying visual aids such as flowcharts, wireframes, diagrams, timelines and emails allows the offshore team to quickly absorb the business objectives.

  • Transfer (business) domain knowledge effectively:

    Sharing customer’s expectations with the offshore team and transferring business domain knowledge is highly crucial for the success of offshore development projects. In most cases, only onsite team members have the privilege of interacting with business users. It’s the obligation of the onsite manager (team) to transfer domain understanding to offshore team members, so that the entire team is on the same page. Without understanding business domain and client's expectations, quality software cannot be delivered.

  • Identify and acknowledge cultural differences:

    Both the customer as well as the offshore development partner should be able to mutually recognize and value the differences in culture, working styles and communication patterns. A study conducted to analyze “the impact of cultural differences in offshore application development — case study results from German-Indian projects” states that cultural differences can affect the factors crucial to offshore development’s success, such as relationship, quality, trust, vendor performance, cooperation etc. A clear interpretation of roles and mechanisms, strong leadership, and an active management of culture by adapting to either the customer’s or the vendor’s corporate culture is an effective way to manage cultural differences.

  • Address time-zone variations:

    Differences in time zone can strain the communication between onsite and offshore teams. To overcome the challenges of time disparity in offshore-onsite collaboration, it is advisable to have an overlap of two to three working hours between both. Communication timings should be fixed during suitable working hours, which are not too late for either onsite or offshore team members and the agenda should be restricted to accommodate important discussions only. Any significant decisions made during this time should be documented for future reference.

  • Encourage open, constructive communication:

    It’s important to have a constantly open communication channel like an open chat room or a dedicated workspace where your local and offshore teams can interact online. Scheduling meetings in advance also helps to an extent, but an open communication channel could reduce the response time, as it takes only a few chat exchanges to clarify questions. To motivate your offshore partner as well as their team, you need to encourage constructive communication. Provide offshore teams visibility into your team’s processes and appreciate their involvement in the project. Communicating ‘what is working well and why’, should be done constructively. Clear-cut definition of the offshore team’s hierarchy and description of the responsibilities of team members are also significant to maximize team motivation.

  • Single ambassador to facilitate the engagement:

    Throughout the project course, try to maintain a single point of contact such as a Business Analyst or a Client Manager who works at the customer’s location. This resource could effectively mediate between the customer and the offshore team and support two-way interactions. If all the communications happen through the onsite client manager, any ambiguities can be clarified immediately, and project delivery happens at a rapid pace.

  • Avoid micro-managing offshore teams:

    Micro-managing an offshore team from another country is not a welcome practice as it can affect the team’s productivity and rapport with the customer. In software industry especially, it can eliminate trust between onsite and offshore teams, limit opportunities for learning and development of interpersonal skills, and often ruin the confidence and performance of teams. To be successful with offshore development, it is always important to foster two-way conversation between the customer and the offshore team. Maintaining an open-door policy encourages offshore team members to become proactive and utilize learning opportunities well. Sharing result-oriented feedbacks can encourage offshore teams to take more ownership and accountability, which ultimately improves the quality of deliverables.

Steps to follow before you plan to offshore projects

There are certain best practices or safety measures that you should take up before offshoring your web/ software development:

Conduct vendor’s background check

  • Find out if the offshore service provider’s experience is sufficient to handle your project requirements
  • Verify their portfolio (case studies), contact their past clients, visit their website or online profiles to understand more about the vendor
  • If possible, pay a visit to the offshore location and evaluate their IT infrastructure, software expertise, resources, work station and other aspects
  • If visiting the offshore office is impossible, try to engage in video conferencing, or a Skype call to understand how they work and get a feel of their work culture
  • Match your project requirements with the right-sized organization

Select the right development methodology

  • You can follow Agile development with a remote team, only if you are ready for Agile yourself
  • Plan your sprints, set KPIs, set days, hours and weeks, and have sprint review and analysis according to the plan
  • Study the outline of your project and understand how your offshore service provider plans to manage it
  • Verify all project documents such as requirement specifications and confirm whether the content actually reflects your needs
  • Make sure you have a clear picture of the development methodology and the project plan so that managing the project from far way becomes easy for you

Use a collaborative project management tool

  • Use a collaborative project management tool such as TFS, JIRA, Trello, Zoho Projects, Taiga etc. and ensure that all parties use it and update it regularly
  • Add and prioritize tasks, mention the backlogs and revise it after each Sprint
  • This will help you manage priorities and track the progress of each activity

Define the scope of the project

  • The scope of the project must be well-defined and documented, and consented by both parties
  • Your offshore services provider must be able to understand your business model as it helps them to deliver more value
  • Encourage your offshore services provider or partner to ask questions and seek clarifications as needed
  • Formulate review or assessment plans to check if the project is on track, and bring changes and modifications, if required

Perform a project planning exercise

  • Identify your goals, objectives and timelines for the project
  • Analyze what kind of application/ solution you need and how you want the end-product to be.
  • Contact your offshore vendor once you have precisely identified your requirements
  • Try to provide clear and near-precise project instructions and encourage your offshore vendor to ask questions

Follow-up and feedback

  • Follow the progress of the development and provide regular feedback through conference calls or emails
  • Utilize the interaction time to provide constructive feedback
  • Communicate your problems clearly and try to work solutions jointly
  • Make use of the offshore vendor’s experience and analytical skills to derive the best recommendations and the latest technologies that fit your requirements
  • Have daily/ weekly stand-up calls or meetings to analyze the progress of work and discuss ways to overcome impediments

Sign a Non-Disclosure Agreement

  • A Non-Disclosure Agreement (NDA) or the confidentiality agreement signed between both the parties strengthens the confidentiality of data and relationship terms
  • NDA obliges the parties to protect any type of confidential and proprietary information or trade sections, thus safeguarding any kind of non-public business information
  • A non-disclosure agreement becomes valid when one of the parties has recourse in the event of a term/ terms of the contract getting violated
  • Signing NDA makes the offshore vendor take privacy seriously and forces them to implement the required steps to secure customer's data
  • The customer should also review the integrated security and/or IP protection program of the potential offshore partner

Intellectual Property Rights

  • As a best practice, it is advisable for the customer to undertake an intellectual property due diligence enquiry before finalizing any offshoring plan to safeguard their enterprise’s IP, and determine which functions need to be kept in-house or offshored
  • It's important to categorize, document, explain, and clarify ownership related issues of IP assets improved or created during the engagement
  • Before entering into an agreement, both the parties (customer and offshore vendor) must carefully evaluate and negotiate the approach that they have selected in relation to sharing ownership rights over IP
  • Negotiations should aim at safeguarding and ensuring proper use, sharing, licensing, development and improvement of the IP (of both parties) during and after the relationship, including any applicable IP assets of third parties
  • The agreement should detail all aspects, such as the ownership and use of the intellectual property assets of both parties as well as any third party IPs, during and after the termination of the offshoring relationship
  • The agreement should include the terms and conditions upon which both parties agree to commit their physical and intellectual assets for a mutually beneficial outcome

Learnings from our past experiences

As an offshore software development champion for more than 15 years, we have learned a lot from our previous experiences with multiple customers. In addition to the steps mentioned above, here are a few tips that we recommend.

Transparency in offshore-onsite collaboration

Geographical proximities, time zone variations, availability of customers to participate in daily stand-up calls or sprint review meetings; all these stand in the way of offshore development’s success. These challenges impact decision-making, and affect transparency at both ends (customer and offshore team).

To overcome these challenges, it is advisable to elevate a business analyst from the offshore team as the product owner. The product owner is in fact the customer’s proxy who is designated to act as the channel of communication between the customer and the offshore team. The product owner should also have a clear understanding of the business requirements put forth by the customer and should participate in scrum meetings and sprint review sessions. It’s the responsibility of the product owner to ensure that both the customer as well as the offshore team are on the same page in terms of understanding requirements and executing each sprint.

Replacing exhaustive documentation with wireframes

It is often noted that in many of the development projects, the offshore team takes a strenuous effort to prepare detailed specification documents to elaborate their understanding of customer’s requirements. Detailed specifications document helps the customer identify whether their offshore partner has understood the requirements well. However, pure text-based specs can be misguiding sometimes, leading the customer to the assumption that the specification document exactly reflects their requirements. This eventually prolongs the project and takes a toll on the customer’s budget. It also delays both parties arriving into a consensus on the requirements.

It is said that a visual is powerful than a thousand words.

Wireframe tools are easily available today, and offshore teams can use them to create wireframes of each screen/ menu/ tab/ option of the application so that the customer can get a feel of the final product in the initial stage itself.

Wireframes bring up a clearer picture of the end-product and allows the customer to filter and narrow down only the required features/ functionalities at the initial phase of the project. Allocating a small portion of the total budget for the wireframes creation can lead to humongous cost savings and profitability in later stages of the project. Also the offshore team can demonstrate working prototypes (demo videos) of modules developed during each sprint to the customer. This enhances customer’s visibility into the offshore team’s work and strengthens their mutual trust.

Execution of milestone-based payment

This is one of the best practices that has benefitted us for a long time. In agile development, a large project is divided into smaller tasks called sprints. Each sprint is completed in cycles or iterations, and assessed frequently. The scope of work varies, while time and quality remain fixed. Ideally, the duration of a sprint is three weeks, with release happening in every fourth week. This cycle features incremental development, testing and bug fixing.

As said earlier, when customers get a feel of the end product that will be delivered to them by means of wireframes, they have better visibility into all the activities involved. Once the wireframes are agreed, the number of sprints involved in the project are identified and tasks are assigned to each sprint as required. That means sprint-wise cost estimation is easy to be done. So, the customers pay for what they get. As and when each sprint gets completed, the sprint is reviewed by the customer and any change requests proposed are addressed in the next sprint. Just like the incremental project delivery, payment is also made incrementally for each milestone accomplished.


As technology becomes the essential wheel that turns our day-to-day life, the number of global businesses that offshore their core technology requirements is on the rise. Companies like us deliver the combined advantages of offshore development as well as in-house development such as cost benefits and deep process ownership simultaneously.

The ever-changing global equations and rapid transformation in the technology front will surely affect offshore software development in the coming days. Despite the restrictions and the change of policies imposed by various governments, offshore development will continue to be a larger part of the global economy.

About the Author

Zerone Tech Team is a bunch of technology enthusiasts at Zerone Consulting who have hands-on expertise in a vast variety of technologies essential to keep businesses running in the competitive world. The team is committed to perform systematic research on the novel technologies and the dynamic digital trends, and share the insights with the readers.

Zerone Tech Team will enrich you with updates on the latest happenings in IT and also provide thoughtful perspectives.


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