A Remote Software Development Center: Benefits and How to set it up?

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Yulia Borusiuk

Published: 19 May 2022

Building Virtual Teams

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The need to optimize costs and provide operational support to businesses in a resource-limited environment has led to a growing interest among CIOs in building remote development centers. This solution allows companies to source external contractors to implement their projects. 

Creating a remote software development center (also known as a competence center) means that the service provider, taking into account the client company's needs, hires remote software developers and provides the necessary IT infrastructure for their work. The newly formed team concentrates exclusively on the customer’s project(s). The set of services provided by a vendor of a remote software development center can vary, from the development of new solutions or features of existing information systems to migration to other platforms, testing, software support, and so on. It’s always up to the client to select the scope of services for the provider.

Benefits of a remote development center work model

The main benefit of a remote development center work model, which also determines its effectiveness, is its long-term nature. The cooperation between customers and teams of remote software developers in this model is typically long-lasting. Non-stop interaction between the two parties makes it possible to debug development processes and reduce the number of errors and the scope of required rework, which is a direct way to cut costs. 

Predictability of results also plays a great role. This can only be achieved through long-term partnerships and is almost impossible when constantly attracting new suppliers with unfamiliar processes and systems.

A company that is considering launching a remote software development center invariably has to deal with several questions. How to properly approach creating and using a remote software development company? What steps need to be taken, and what to pay attention to during the first stages of cooperation? With that in mind, let's look at a few key recommendations a CIO may find useful.

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Establishing a remote software development center

Make a decision. First of all, it is necessary to assess how the use of such a model as a remote software development center suits your organization.

Key prerequisites for hiring remote software developers are:

  • Your company uses several information systems without up-to-date documentation;
  • Your team is unable to respond promptly to business needs in terms of the development of application functionality;
  • You constantly face a growing queue of requests for software bug fixes and improvements.

Select a supplier. When choosing among service providers, pay attention to such important characteristics as having practical experience in building remote software development centers, the business sizes they have worked with, and the availability of specialists with the necessary technical qualifications and expertise.

READ ALSO: How to Build Your Own Remote Software Development Center

A provider of a remote software development center should have:

  • Actual experience corroborated by a portfolio of clients;
  • Availability of specialists with the necessary qualifications;
  • Resources for hiring remote software developers;
  • Resources for the subsequent expansion of the center's capacity.

Outline risks. The company's primary insurance is a contract. It must detail the responsibilities of both parties and the distribution of responsibilities. To calculate the cost, it is essential to describe in detail the algorithms for price formation, the values ​​​​of rates and their relationship with fluctuations in exchange rates, the volume of discounts and their conditions, and the parameters of fines for violation of the terms of the contract, motivational bonuses, the amount of compensation for direct and indirect costs of the supplier, the cost of special equipment used and software licenses, security costs, terms, etc. This will significantly reduce the likelihood of conflicts and unmet expectations.

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Risk reduction also assumes creating a transparent and efficient system of interaction between your internal IT department and remote software development center. The most important thing here is keeping up the team spirit: your company's staff should see the center's specialists not as competitors but as teammates. Also, the management structure should not be bureaucratic. 

Develop a system of metrics. To assess the quality and efficiency of the competence center when hiring remote software developers, it is worth developing a plan of metrics and then monitoring the values ​​of key indicators. Here are a few examples of possible metrics:

  • Estimates of labor intensity and the accuracy of "achieving" them, "plan-fact" of actual costs vs. the planned ones;
  • The number of errors in the software identified during its testing and operation, their types, and criticality;
  • The proportion of time spent on eliminating mistakes vs. the total amount of labor spent on developing solutions.

Rate results. The right approach to creating a remote software development center will allow the company to devote more time to building the right kind of IT strategy. In addition, the company will be able to fully use the supplier's experience in implementing projects similar in scope and, if necessary, quickly hire remote software developers. Among other things, the correct organization of the remote software development center will help you optimize your IT development costs. For this, it is necessary to treat the choice of a partner and the project itself in all seriousness.

READ ALSO: How to Reduce IT Development Costs

Typically, the activities of a remote software development center are closely integrated into the customer's business. The timing of releases and delivery of new versions to customers directly depends on the effectiveness of the team's work. An atmosphere of transparent and trusting partnership can be built through high-quality work and the competence of specialists from both sides. A clear communication system, which includes regular and prompt consultations, electronic and mobile means of communication, and audio and video conferences, helps clients control compliance with the established deadlines and the quality of work.

Contact us to discuss your needs related to building and launching a remote software development center. 

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