How To Manage Outsourced Software Development Teams Effectively

Tuhin Bhatt

Co-founder of Intelivita

  Published on December 28, 2023

  10 min read

Outsourcing is a great way to access a huge talent pool and reduce business expenses.

In fact, companies opting for outsourcing can cut wage expenses by 70% to 90%.

Furthermore, 90% of small businesses choose to outsource to drive business growth by working with experts.

Yet, managing outsourced software development teams comes with several challenges.

But what steps should you take to overcome the challenges and ensure that your team works towards a common goal?

Let’s explore the necessary details and learn how to manage outsourced software development teams in this blog!

What is an Outsourced Software Development Team?

An outsourced software development team is a group of professionals hired from an external company to work on specific software projects.

The team members can be located anywhere in the world, providing access to a diverse range of skills and expertise that might not be available in-house.

Many businesses hire outsourced teams for their ability to tackle complex projects efficiently and cost-effectively.

They bring fresh perspectives and specialized knowledge crucial for innovative software development.

These teams work under the direction of the hiring company but operate independently, using their own software development technologies and models.

3 Models of Outsourcing Software Development Teams

Before hiring and managing outsourced software development teams, you must understand three outsourcing models.

Each offers unique benefits, suitable to different project needs.

1. IT Staff Augmentation

IT staff augmentation means you only want to bring in external professionals to work alongside the in-house team.

These professionals are typically highly skilled in specific areas and know the best practices for software development, filling the existing team’s expertise gaps.

Choose this method for short-term projects or when you need specialized skills temporarily.

You can also adjust the number of augmented staff according to project requirements.

Moreover, this model offers seamless integration of outsourced staff with the existing team, maintaining the company’s work culture and aligning with its processes.

2. Dedicated Teams

Hiring a dedicated team is the way to go if you want a team of professionals who work exclusively on your long-term projects.

They operate independently but closely with you as the client.

These teams typically include a range of software development team roles, such as:

  • Project managers
  • Front-end and Back-end Developers
  • QA engineers

The dedicated team model is based on Agile methodologies, ensuring flexibility and adaptability to changing project needs.

Also, they can deeply understand the project objectives and work autonomously, reducing the management overhead for the client.

3. Outsourced Development Services

An outsourced development service is ideal for businesses that lack the internal resources to undertake large-scale projects with well-defined requirements and deliverables.

Simply put, you hand over entire projects to an external service provider, from software project planning to deployment.

Thus, it lets you focus on your core business activities while the outsourced team handles the technical aspects.

This option also offers cost benefits, as businesses save on the expenses associated with hiring and training a large in-house team.

How to Choose the Right Outsourced Partner

Managing outsourced software development begins with selecting the right team for your project.

Here are several things you should consider:

1. Be Clear on What You Want and Need

Before you start looking, understanding your project requirements is crucial, such as:

  • Your business goals
  • The project’s expectations and deliverables
  • The specific skills and expertise needed

Start by outlining your project objectives and the problems you’re trying to solve.

Then, consider:

  • The project’s scope
  • The technologies involved
  • The required expertise level
  • The project timeline
  • Your budget

Understanding these factors will help you communicate your needs more effectively to potential partners and will be crucial in evaluating their suitability.

2. Make a List and Evaluate Potential Partners’ Track Record

Next, look for companies with a strong track record in software development.

Review their portfolio to see the types of projects they have completed in the past.

A partner with experience in your specific industry will have a better understanding of the challenges and requirements unique to your field.

They can bring valuable insights and suggest innovative solutions based on their previous work.

Then, check their client testimonials and case studies.

These can provide valuable information about their ability to deliver projects successfully and their approach to client relationships.

Lastly, ensure they have the resources and capacity to handle your project, especially if it’s large or complex.

3. Assess Their Reputation and Cultural Compatibility

A company’s reputation in the market strongly indicates its reliability, quality of work, and previous clients’ satisfaction level.

You can research:

  • Their standing in the industry through client reviews
  • Ratings on platforms like Clutch or Glassdoor
  • Any awards or recognitions they have received

Cultural compatibility is equally vital regarding their work ethics, business practices, and communication styles.

A partner whose culture aligns with yours can lead to smoother interactions and a better working relationship.

Other ways to gauge cultural compatibility are by:

  • Interacting with the potential partner’s team
  • Asking about their company values
  • Observing their communication style during your initial discussions

4. Consider Time Zone Compatibility and Communication Protocols

While modern technology has made it easier to work across time zones, significant differences can still pose challenges in managing outsourced software development teams.

So, evaluate how the time difference will impact your project.

Sometimes, a few hours difference can be beneficial, allowing for round-the-clock work.

In other cases, it might lead to delays in communication and decision-making.

Discuss and agree on a work schedule that suits both parties, ensuring overlapping hours for real-time communication.

Furthermore, you must establish clear communication protocols.

Decide on the primary communication modes, whether:

  • Email
  • Video calls
  • Project management tools

Set expectations for response times and regular status updates.

This clarity will help maintain a smooth flow of information and reduce the chances of misunderstandings.

How to Manage Outsourced Software Development Teams Effectively

Follow these six steps to effectively managing outsourced software development teams:

#1. Establish Clear Communication

Avoid just delegate tasks and track progress.

You must create a collaborative environment to foster innovation and productivity.

Setting up reliable communication channels and regular check-ins is essential to help you:

  • Build clear communication
  • Understand cultural nuances
  • Adapt management style

All these are to ensure your team members, regardless of location, are updated on project developments, changes, and expectations.

Managing outsourced software development teams could involve daily or weekly meetings depending on your project’s needs.

Use tools like:

  • Slack for instant messaging
  • Zoom for video calls
  • Gmail for formal communications

Also, your communication plan must outline when and how often meetings will occur, who will be involved, and what communication tools will be used.

This plan should also include protocols for urgent communications and how to handle different time zones.

The key is to create an environment where team members feel comfortable sharing ideas, asking questions, and providing feedback.

#2. Provide Informative and Digestible Training Guides and Materials

Training materials cover the technical aspects of your project and your company’s processes, standards, and expectations.

Create comprehensive guides that detail your project’s workflow, coding standards, and quality assurance measures.

Ensure they are easy to understand, regardless of cultural backgrounds or varying experience levels.

You can include examples and best practices to help the team understand the expected level of quality.

If there are specific tools or platforms that the team will be using, provide tutorials or links to resources where they can learn more about them.

Another alternative is an onboarding session for new team members covering the project’s overview, introducing key team members, and reviewing the training materials.

Regularly update these materials to reflect any changes in the project or technology used.

#3. Maximize Collaborative Efforts between In-house and Outsourced Teams

Why is this step necessary? Because it can improve the quality of work through diverse perspectives and build trust among your team members.

Encourage regular joint meetings where both teams can discuss project updates, brainstorm solutions to challenges, and share knowledge.

Consider using collaborative tools, such as:

These platforms allow team members to work on documents simultaneously, provide feedback, and maintain a single source of truth for project documentation.

Also, involve outsourced team members in decision-making processes and give them a platform to voice their opinions and suggestions.

Another effective strategy in managing outsourced software development teams is to assign collaborative tasks or projects that require input from both in-house and outsourced team members.

#4. Show a United Process

Showing a united process means aligning the outsourced team with your company’s methodologies and processes to maintain consistency in work and expectations.

Standardize the tools and technologies used across both teams to ensure clarity and efficiency.

Provide clear guidelines and documentation on the following:

  • Coding standards
  • Quality assurance practices
  • Deployment processes

The guidelines and documentation will assure that everyone is working towards the same quality and performance benchmarks.

#5. Ask Your In-House Team for Feedback (Progress and Performance)

Regular feedback from your in-house team helps identify areas where the outsourced team excels or needs improvement.

Encourage your in-house team to provide honest feedback.

Conduct regular review meetings where the in-house team can discuss their experiences working with the outsourced team.

This feedback should cover aspects like:

  • The quality of work delivered
  • Adherence to deadlines
  • Communication effectiveness
  • Any unique challenges faced

Having a system in place for the in-house team to report any issues or concerns promptly is beneficial.

This could be through a dedicated channel on your communication platform or regular one-on-one check-ins.

Addressing these concerns swiftly can prevent minor issues from turning into significant roadblocks.

#6. Share Constructive Feedback and Provide Support

Regularly share feedback with your outsourced team.

However, this feedback should be specific, actionable, and relevant to the project goals.

For instance, if a particular aspect of the software isn’t meeting the expected standards, provide clear examples and suggest ways to improve it.

Feedback sessions should encourage open dialogue.

So, don’t just point out what’s wrong but recognize good work and progress.

This approach in managing outsourced software development teams helps build confidence and maintain a positive working relationship.

Also, provide relevant support, such as additional resources, training, or guidance to help the outsourced team overcome challenges.

If they struggle with a particular technology or process, consider arranging a training session or providing access to learning materials.

Be available to answer questions and clarify doubts.

Sometimes, outsourced teams might hesitate to ask questions due to cultural differences or fear of seeming incompetent.

Encourage them to communicate openly and assure them that their concerns are valid and will be addressed.


Managing outsourced software development teams effectively involves transparent communication, comprehensive understanding, and strategic collaboration.

It’s about creating a cohesive environment where in-house and outsourced teams work towards shared goals.

Utilizing the right tools for collaboration and communication, coupled with regular feedback from all team members, is crucial to ensure smooth project execution and foster a collaborative relationship.

By adhering to these practices, your business can maximize the benefits of outsourcing, such as accessing diverse skills and innovative solutions, while maintaining control over the projects and achieving the desired outcomes.

Looking for a hassle-free way to handle your software development needs without micromanaging your outsourced team?

Intelivita has you covered with the three mentioned outsourcing options.

Need a few extra hands for your project? We can help.

Want a team that’s all yours, focusing just on your work?

We’ve got that too. Or do you want to hand off the whole software development task? No problem!

Head over to Intelivita.

Explore our software development services and read what satisfied clients say about our work.


Tuhin Bhatt is a co-founder of Intelivita, a leading Web and Mobile App Development Company. He helps passionate entrepreneurs build amazing tech products. Tuhin being a peoples man who has a passion to share his technical expertise with clients and other enthusiasts.

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