In the early days the offshore story was dominated by large multi-national companies, often with existing in-country presence in places like India, doing big deals with big established Indian players. However, as the market has matured many more medium sized companies are being drawn to offshoring, if nothing else to ensure they remain cost-competitive when compared with their larger rivals.

The needs of medium-sized businesses are very different to those of large players. They are often domestic rather than international businesses and have little or no experience of working with other cultures. As a result they need a greater degree of handholding and want a closer relationship with a trusted partner who can help them make difficult decisions. And of course they work on a different scale. We regularly come across customers who want to build an offshore development capability with an average headcount of five or so. The big problem here is that five people, particularly in the hierarchical Indian context, give little room for movement. The relatively immature IT industries in places like India, Vietnam, China and Poland tend towards teams of people who are more specialised than in the more mature markets like the UK where people tend to be more multi-skilled and multi-tasking.

Very small teams with specialised roles place great emphasis on particular individuals and as a result allow very little room for error. At Arrk our rule of thumb is that 8-10 people is a minimum size for a stable productive offshore team. We have had many smaller teams - our smallest being a team of three who worked very productively for a Customer for three years - but such situations are unusual and we have come to the conclusion that the risk of failure in such small teams usually outweighs the benefits.

One of the other dangers here is that associated with having protracted decision-making processes. Although we’ll cover it later, the offshoring project with no detractors or doubters is a very rare thing. Spending too much time prevaricating over a move offshore (perhaps following a mediocre performance of an ill-conceived pilot project) can create unexpected HR/stakeholder management issues. Such delays can play into the hands of those stakeholders who would like to see the whole offshoring thing fail.

The best approach is to find the right partner and work with them to formulate a credible strategy. Then act decisively to build up the team size as quickly as possible to an average minimum team size of 8-10 team members.