How to Hire and Manage an Outsourced Development Team

man in front of a computer

“Time is money” for every business. That saying has never been more true when you’re a Small-to-Medium sized Business, (SMB or a startup).

For businesses trying to do everything with a small team, every cent (and, by extension, every second) really, truly counts. 

To grow, though, you need to bring in the necessary talent — and you need to do it fast. Let’s say you need to get to market with a digital product (e.g., a mobile app that is BLE connected to a piece of hardware), and you needed to do it yesterday.

Should you speed through the recruitment process and assemble an in-house development team? Or is leaning on the skills and experience of an outsourced development partner the smarter way to go? Let’s take a look.

In this article

Companies need to tread carefully when building a development team

There comes a time in all successful SMBs and startups when your small team just can’t keep up. So what do you do?

Usually, the answer is to look for new development talent to accelerate growth and provide the necessary skills. 

The problem with this strategy is that finding that talent isn’t always easy, fast, or affordable. There are lots of tricky questions when it comes to hiring developers in-house. 

In-house teams vs outsourcing software development

Unfortunately, several factors are working against growing SMBs that try to build an in-house team. Here are just a few of those obstacles — and, for a small or scaling business, they can be devastating. 

Putting together your own team takes time and money

Hiring a team of talented, reliable, and passionate individuals takes a lot of time and resources. And if your company doesn’t already have some development talent on board, even knowing where to start can be overwhelming. 

What kind of developers do you need? What skills and expertise should they have? What are the tools and processes required for success? And can you put together a competitive enough package to keep them on your team as your business grows? 

Beyond all that, it takes time and money to put together a whole team of developers. You’ll need to recruit, interview, shortlist, and make offers to candidates — which can take months.

And you’ll need to factor in salaries, benefits, training, and let’s not forget about curating the culture. It all adds up quickly. 

In the process, you invest your time in recruitment, which can take time away from your day-to-day priorities that keep your SMB running smoothly.

When you run a company you don’t have time to waste. But the unfortunate truth is that building and training your own development team from scratch can be time-consuming and risky.

Developing a reliable process isn’t smooth sailing

After you’ve hired and trained a team of designers and engineers, you need to establish a reliable, efficient, and productive development process. 

You need this group of individuals to work as a team, you need them to operate in an organized, efficient manner, and mistakes can be costly at this stage of the game. If you don’t have direct experience with working on or managing a development team, then the odds are stacked against you.

Not to mention that your team members might not even get along! They might have zero chemistry or, worse, negative chemistry.

You might not know how much of a budget they need, which tools to connect them with, or what the best practices are, and you may spend time floundering between these points to find the right balance.

You shouldn’t rush building team culture

While it might sound nebulous, building the right team culture is vital to keeping your team productive and motivated.

You’ve built your SMB into what it is, so you already have the passion to keep the fire burning. You want to ensure that your employees are as excited and energized as you and that they buy into your vision for the business and are willing to work (hard) towards the same goal.

You can’t guarantee this when building an in-house development team at speed, and it might not be something you can cultivate, either. 

When should you go with an in-house development team?

All that said, there are a few instances where an in-house development team is the right option for SMBs. Consider it if: 

  • Money is no object – If you have lots of cash on hand to attract and keep the best candidates and invest in the latest technologies, in-house development could be a good option for you.
  • You’re not rushed for time – If you don’t have strict deadlines for your project, the slower pace of developing digital products in-house might be a good fit.
  • You have security concerns – This is a big one — if your project involves highly sensitive data, you may want to consider keeping things in-house to (hopefully) mitigate potential security breaches. 

If any of the above apply to your business or your project, keeping things in-house might be the right choice.

However, there’s usually a better option for companies looking to scale — IT outsourcing.

Learn more about choosing between in-house vs. outsourcing software development.

What is software development outsourcing?

Software development outsourcing means contracting an external company to create a digital product based on your needs and vision.

By outsourcing software development, you delegate the technical heavy lifting to third-party experts. This accelerates project kickoff and shortens time to market — without the headaches of building an in-house crew.

What IT services can be outsourced?

  • Web & Mobile– You can hire a development team to build your web or mobile application from scratch and handle everything, including concept, development, testing, and even post-launch support.
  • Websites – From basic informational sites to full-scale e-commerce platforms, an outsourced team can handle all the front- and back-end development tasks required to get your website up and running.
  • Application Management – Outsourced teams can manage your app’s maintenance, updates, and troubleshooting to keep it secure and working smoothly.
  • Infrastructure Management – Offshore teams can oversee your cloud-based servers, storage, and networks to keep your IT infrastructure secure and scalable.
  • Emerging Techs – New technologies like Blockchain, IoT, or AR/VR can be handled by outsourced teams that have experience in it, from product definition to development phases.
  • Other Services – You can also outsource data analytics, quality assurance testing, and cybersecurity solutions.

How much does it cost to outsource software development?

When comparing in-house vs. outsourcing software development, outsourcing is almost always more affordable. It eliminates the overhead costs involved in traditional in-house development.

Of course, total investment can vary widely depending on complexity and timeline. In general, you can expect to budget $100,000 to $300,000 for a custom-designed MVP.

Where you decide to outsource from can also affect your bottom line. Rates are all over the map (pun intended).

For example, you will likely spend anywhere between $60 to $250 an hour in the US. In contrast, India has some of the most competitive rates at around $30 an hour, making it a budget-friendly option.

But Brazil offers the middle ground if you want to outsource somewhere closer to take advantage of similar time zones and cultural similarities. Software development outsourcing companies in Brazil charge $40 to $85 per hour.

Learn more about how much it costs to build an app

With an outsourced development team, you mitigate in-house development issues

So, now we know what software development outsourcing is — what makes it a better choice for SMBs rather than building an in-house development team? 

Outsourced engineering teams come with none of the hassles of building a team yourself.  They’re used to working as dedicated teams (a.k.a managed services) and ready to hit the ground running for your business’s success.

Here’s what that could look like:

Your team is ready to go right away

With a pre-built development team, there’s no need to hire the right talent. It’s already there. This allows you to scale up or down as quickly as you need. 

This alone gives your company a huge competitive advantage. It allows you to be agile, claim a stake in the game, and compete with larger companies in your sector. 

An outsourced team can integrate with your existing team seamlessly, supporting their performance without disrupting the progress you’re making elsewhere.

Outsourced team members already know how to work together well

Another immense benefit of an outsourced team is getting proven collaborators. There’s no need to establish effective processes, ensure good teamwork, or worry that these individuals will be cold toward one another. 

Not to mention that your outsourced team brings significant experience to the table. This can supplement your and your team’s know-how, fast-tracking your learning curve. 

You can foster a positive culture quickly and reduce turnover costs

Likewise, an existing team will already have the excitement and motivation you’re looking for. They’ve already been onboarded and trained — they’re ready to show up and make your product a success.

They already work together daily, reducing the chances of disagreements, dissatisfaction, and other factors leading to unproductive, unhappy conditions. 

Benefits of outsourcing software development

Yes, Cheesecake Labs offers stellar outsourced development teams to businesses all over the world. But we’re not promoting this way of working purely for personal gain. This is what we would do in your shoes based on what we know and have seen in the market time and time again.

The benefits to your business — and, let’s face it, your stress levels — are numerous:

Focus on your business

You’re running a business, and your energy is already stretched thin. There’s no need to push that limit even further by taking on the challenges and risks of building an in-house development team before you’re ready. 

Outsourcing your development keeps your schedule and resources balanced without compromising results. You can manage your time appropriately while your outsourced team supports you. 

You can begin the in-house recruitment process when the time is right, not because you’re under pressure.

Mitigate risk for your product

Not only can an outsourced development team free up your time, but it can also mitigate risk.

Unlike building an in-house team, where you might not know if new hires are right for your project or company until you’ve already invested in them, an outsourced team has built-in credibility. 

Likewise, an outsourced development team will almost always have “more collective experience” than any team you can put together. That’s exactly what you need today to launch a quality product for your target audience.

Boost the integrity of your startup

An outsourced development team will provide your business with a sense of legitimacy and integrity. You can make promises to stakeholders more confidently, knowing that you have a team on your side who can provide you with the results you need. 

This allows you to deliver on your promises, contracts, and sales — even as you scale up in a short period. 

3 more benefits of IT outsourcing

Want even more reasons why software projects outsourcing is the better choice? Here are three more to consider:

  • Larger talent pool – Outsourcing lets you go beyond your local job market. You can tap into specialized global talent that may be rare or expensive to hire domestically.
  • Proven teams – Working with established teams speeds up your project. They’re already synchronized and have effective workflows, saving you time and reducing risks.
  • More expert knowledge – Outsourced teams can bring fresh insights and innovative solutions. This can be especially valuable for complex or novel challenges or when you need a fresh perspective.

How to hire an outsourced software development team

Sold on the benefits and want to hire a development team to help your SMB? Here’s a step-by-step guide to prepare you for finding the right outsourced development team:

  1. Understand your project – Clearly outline your project’s scope, objectives, and specific requirements.
  2. Set your budget – Factor in the app’s complexity, project timeline, and other elements that could influence the final cost.
  3. Interview and assess – Speak to various software development outsourcing companies, check their portfolios, and ask for client references.
  4. Consider cultural and language factors – Choose a team that effectively communicates and aligns with your business culture. Nearshore software development is often better than offshore development in this regard.
  5. Make your decision – Outsource to a software development company that meets your needs and budget constraints.
  6. Engage and manage – Work closely with your outsourced team through regular updates, reviews, and feedback loops to keep the project on track.

Key factors to consider when hiring an outsourced development team

During the process of vetting offshore teams, keep these things in mind to help guide your decision.

  • Architectural approach – Look for well-defined development, project management, and quality assurance processes to ensure your project stays on course.
  • Technical expertise and portfolio – Check their relevant experience, certifications, and key employee profiles to assess their qualifications.
  • Infrastructure and technologies – Verify that they have the necessary hardware and software for your project, and can invest in specific technologies if needed.
  • Security, privacy, and data protection – Ask about how they guard their clients’ data against unauthorized access and theft.
  • Market reputation – Use review platforms like Clutch and Glassdoor to check their credibility and reliability.

The best countries to outsource software development 

For companies in North America and Western Europe, nearshoring to Latin America is often the best choice regarding costs, time zone alignment, and cultural compatibility.

Brazil in particular is a rising star in nearshore software development. The country has a community of over 500,000 software developers, including the world’s largest group of Java experts. Its growing tech and IT investment scene also makes it a prime outsourcing destination.

Brazil-based Cheesecake Labs is proud to be the number one provider of software development outsourcing services in Latin America. With our strong foothold in this booming tech landscape, we are uniquely positioned to deliver world-class services that are both cost-effective and culturally aligned with Western business needs.

How does nearshore outsourcing work at Cheesecake Labs?

Cheesecake Labs has a four-phase approach to product development, emphasizing customization and client collaboration throughout the process. We work closely with you to make sure the digital products you build align with your SMB’s goals. Here’s how we do it:

Phase 1: Product definition

We kick off with strategy alignment and dive into market analysis and preliminary tech assessments. By the end of this phase, we deliver a development roadmap, customer journey map, and initial wireframes — all setting the stage for success.

Phase 2: Product design

This phase is about early tech validation and creating low-fidelity layouts. Our UI designers breathe life into the app, adhering to a design system that reflects your brand identity.

Phase 3: Product development

Depending on your needs, you can choose between two product development options:

  • Full-product delivery – After completing Phases 1 and 2, we create the entire product for you, managing all aspects from additional development to final testing.
  • Dedicated team – We provide a team of experts to act as an extension of your company. Composed of project managers, UI/UX designers, and front- and back-end engineers, this team works solely on your project to deliver a polished final product.

Learn more about Cheesecake Labs’ approach to dedicated teams.

Phase 4: Product optimization

We offer two product improvement approaches for dealing with undiscovered bugs, UX hiccups, and other performance bottlenecks:

  • Ongoing optimization – We proactively monitor your app’s performance, suggest enhancements, and remain alert to changes that may affect it.
  • Here when you need us – We can also provide periodic updates as needed, rather than constant monitoring.

Remote-first culture

Since becoming a remote-first company in 2020, Cheesecake Labs has honed its long-distance collaboration strategies. We can seamlessly sync with clients worldwide, ensuring clear communication and timely delivery regardless of location.

Our remote-first culture has also expanded our talent reach beyond our Florianopolis base, making us even more agile.

Although our physical offices remain open for face-to-face meetings, our remote flexibility meshes perfectly with diverse working styles — a skill our nearshore clients appreciate.

A proven track record 

For a real-world look at how we transform concepts into successful apps, check out some of our recent projects:

  • We built a robust mobile and web interface for Europe’s first helicopter booking platform, FindHeli.
  • We also helped the German car subscription firm FINN quickly expand its US user base with our app development expertise.
  • Check out how we built CRU — the first app to combine social networking, event management, GPS, and chat features for car enthusiasts.

Read more about our past projects to see the results of our app development process!

build scalable applications

About the author.

Jeremy Stephan
Jeremy Stephan

Jeremy Stephan is no stranger to building digital products. In fact, he's worked with Disney, NBC, Mercedes-Benz, HotelTonight, and many other companies in helping to guide them through the app design and development process. Jeremy has led client engagement in the digital space for over 10 years and served as a mentor within the TechStars network.