Co-Development Done Right: How to Integrate External Teams Without the Headache

Research from Harvard Business Review shows that outsourcing can cut business costs by 20–30%, which can give your business’s ROI a direct boost. But there’s a better way to get those benefits without the usual trade-offs: co-development. 

It’s like outsourcing, but built for speed, flexibility, and deeper alignment with your internal team. The real challenge? Many teams jump into co-development without a clear strategy and end up dealing with rework, misaligned products, delayed timelines, and frustrated developers.

That’s why we created this guide to help you optimize this strategy. We’ll explore: 

• What external development really is and when to use it
• How to choose the right external teams and integrate them without losing velocity
• Best practices for sustaining co-development success and much more. 

What Is External Development?

External development means bringing in a third-party team, like a software development company or a few skilled developers, to contribute directly to your product. 

They might support your codebase, strengthen your infrastructure, or handle parts of the software project your house team doesn’t have the time or expertise for.

However, not all external collaborations look the same. So, what type of collaboration actually works for your product? 

There are three main models you can usually choose from: 

1. Outsourcing 

Outsourcing is the most hands-off approach, with 92% of G2000 companies choosing IT outsourcing. You hand over the entire project (or parts of it) to an external company, and they handle everything from planning to execution. 

It’s efficient for well-scoped projects where your internal team doesn’t need to stay involved. But this distance comes at a cost, as your house team remains on the sidelines, and control over the process you outsource is limited.

2. Staff Augmentation 

Staff augmentation, on the other hand, is more of a plug-and-play solution. You temporarily bring software development team members on board to fill capacity gaps or add specific technical skills. 

These developers integrate into your team, follow your project plan, and work under your direction. It’s a quick way to scale without long-term commitment, but if your onboarding process isn’t strong or your team isn’t used to integrating outsiders, it can feel messy.

3. Co-Development

Then there’s co-development, arguably the most collaborative and strategic model. Instead of handing things off or hiring a few extra hands, you combine your house team with a dedicated development team from outside. 

This model demands more effort upfront, including setting expectations, clarifying project requirements, and choosing the right communication tools, but the payoff is huge. For complex projects, it builds trust, speeds up delivery, and produces better results as your team is working in sync, not in silos.

When Do You Need External Development?

Knowing when to bring in an external team can be the difference between falling behind and moving forward with confidence. 

These are a few moments where it just makes sense:

• Building and launching new products
• Covering gaps in technical expertise
• Meeting tight or high-stakes deadlines
• Easing the workload for your internal team

Note: Platforms like Chrono give you capacity on demand with dedicated squads to speed up your roadmap. It also delivers top vetted talent to strengthen your internal team when you need it most.

Benefits and Risks of External Development

Let’s break down what you really get when working with an external development team, including the upsides worth chasing, and the risks you can’t afford to ignore: 

Benefits

• Faster delivery through team extension without overloading your house staff
• Access to niche technical skills that your house development team may lack
• Flexible resourcing to match changing business requirements or priorities

Risks

• Misalignment with your internal software development team can cause friction
• Delays due to a slow onboarding process or time zone differences
• Concerns around security, intellectual property, and code quality when working with an external team

Want to catch these risks before they slow you down? Chrono gives you real-time insights into delivery velocity, time usage, and contributor activity across internal and external teams, so you can stay ahead of problems.

What to Evaluate When Choosing an External Development Team?

You’re not just picking a vendor, you’re choosing a team that will shape your product. The wrong call can halt progress. The right one? It can accelerate everything. 

Here’s what to look for before you commit: 

1. Domain Expertise in Your Product Area

Select a team of developers who’ve worked on similar platforms, industries, or architectures. Familiarity with your business model and user expectations means smarter contributions from day one. 

2. Proven Delivery Track Record

Ask about previous clients, request case studies, and check client reviews. Bonus points if they’ve handled complex projects or contributed to long-term success with measurable outcomes.

3. Communication Rhythm and Transparency

Smooth collaboration starts with an aligned communication style. Make sure their tools and reporting habits match your needs. Daily check-ins? Weekly updates? You need to know how they’ll keep you in the loop.

4. Time Zone Compatibility

Time zone differences don’t have to be a blocker, but they can be if there’s no plan. Look for teams that already work across geographies or offer overlapping hours with your technical team.

5. Willingness to Integrate With Your Workflows and Tools

A strong outsourced team won’t work in a silo. They should be ready to:

1. Plug into your project management platform 
2. Use your existing communication tools
3. Align with your business processes
4. This is especially critical if you're following agile approaches or working within a hybrid model.

Vetting Tips For External Development Teams 

Anyone can talk about a big game in a sales call. The real test is how a team performs under pressure, communicates day to day, and fits into your workflow. 

These quick checks will help you separate the smooth talkers from the real partners: 

• Request retrospectives: Don’t just ask for a polished portfolio. Ask how they handled tough moments, shifted scope, or responded when things didn’t go as planned. 

• Start with a trial sprint: Set up a low-stakes sprint that mirrors your actual business requirements. It will expose gaps in their technical skills, alignment, and how well they integrate with your team of developers.
• Check onboarding and async habits: A reliable team will have a clear onboarding process and strong async communication, especially if they’re remote. Ask for documentation and see how they handle updates without constant check-ins.
• Assess cultural fit: You’re not just hiring a technical team, but adding to your company culture. Make sure their soft skills, communication style, and general vibe match how your product team already works.

How to Integrate External Teams Without Losing Velocity?

Choosing the right external team is just the first move. The real game begins when you have to integrate them without slowing everything down.

We have shared some tips to nail that: 

1. Assign an Internal Point of Contact

Pick one person, your project manager, engineering lead, or senior dev, to be the go-to for the external team. They should be available for: 

• Quick decisions
• Review deliverables regularly
• Keep both sides aligned on goals and blockers

2. Establish Clear Responsibilities

If everyone knows their role from the start, you keep the development process tight, efficient, and way less stressful.

Let’s see who should be in the lineup, and why it matters:

• Software delivery manager: Sets up the dedicated team, keeps an eye on skill development, updates you on any staffing changes, and ensures seamless communication. 
• Product owner: Plans the backlog, manages shifting project requirements, checks the team's work, and keeps everything tied to your bigger business goals.
• Team lead: Supports the product owner, helps the technical team plan and deliver solutions, validates technical choices, and steps in practically when needed to move the work forward.
• Scrum master: Clears bottlenecks, sharpens the Agile team’s process, minimizes risks, and makes sure both the developers and the product owner stay aligned.
• Frontend and backend developers, QA engineers, and specialists: These are your builders, who focus on executing the work and bringing the product to life based on their expertise.

3. Sync Sprint Planning Across Teams

Two timelines = twice the confusion. 

Set up one shared sprint calendar that locks in start dates, stand-ups, reviews, and retros. Use tools like Jira or ClickUp to keep everything visible to both your house team and your co-developers. Furthermore, always plan sprints together with the same priorities and deadlines, so no one’s guessing what’s next.

4. Share Full Product Context 

Give your external developers access to your live backlog, feature roadmap, and product goals via your project management tool. Walk them through the priorities in a kickoff session, and explain how features tie into overall business objectives. Clear context from day one means better decisions and fewer delays.

5. Share Coding Standards and Workflows

Strong collaboration starts with shared standards. Give your software development team members access to coding guidelines, CI/CD practices, and versioning workflows. The key is to store everything in a shared repo or internal wiki and review it during onboarding. A few hours upfront saves weeks of fixing misaligned code later.

6. Run Productive Meetings 

Every meeting should have a purpose. Before you even send an invite, ask: what are we solving? Build a simple agenda around that and share it early. Bring only the people who can move the work forward, not just everyone with a calendar slot. 

During the meeting, stay anchored to sprint goals, unblock issues fast, and avoid getting lost in debates. Let your project manager or team lead guide the flow and keep discussions sharp. Lastly, leave with clear action items, owners, and timelines. 

If it doesn’t need a live discussion? Push it async and save everyone’s time. 

7. Implement Transparent Reporting 

When you’re managing both internal and external teams, guesswork isn’t good enough. You need a clear, real-time view of how projects are moving, where time is going, which tasks are blocked, and whether teams are staying on track. 

That’s where transparent reporting changes everything.

Tools like Chrono pull all the critical pieces together: project timelines, resource usage, delivery velocity, and potential bottlenecks. You can add different activities and users to get a complete, real-time view of your project progress and workload distribution. 

8. Communicate Effectively

Without clear talks, tasks slip, assumptions build up, and problems stay hidden until they cause real damage. Thus, strong collaboration habits and the right tools aren’t optional. In fact, studies show effective communication can drive a 25% boost in productivity.

Some of the top tools you can leverage for this purpose are: 

• Slack, Notion, and GitHub for async communications 
• Chrono to track workloads, spot time drift, and catch delivery blockers early
• Protect sensitive work by using VPNs, encrypted channels, and access controls, especially across distributed setups.

External Development Best Practices

We’ve seen how to integrate external teams, now it’s time to make it stick. 

These best practices will help you turn external collaboration into real results.

1. Adopt an Agile Mindset

Adopting an agile mindset means thinking beyond rigid plans and focusing on adaptability, teamwork, and delivering real value at every stage.

Agile principles emphasize exactly this and involve: 

• Delivering value to customers early and frequently. 
• Embracing changes in requirements, even late in development. 
• Shipping working software frequently through shorter cycles. 
• Encouraging daily collaboration between business and developers. 
• Building projects around motivated individuals and trusting them to deliver. 
• Using direct, clear communication to move work forward. 
• Measuring progress by working software, not documentation. 
• Maintaining a sustainable, steady work pace. 
• Paying continuous attention to technical excellence and strong design. 
• Keeping things simple and avoiding unnecessary work. 
• Letting self-organizing teams define the best solutions. 
• Regularly reflecting on how to improve and adjusting as needed. 

You know the best deal? 

Teams that fully embraced Agile saw real impact across the board, with efficiency, performance, and employee engagement all climbing by 30%, according to a McKinsey Global Survey.

2. Align on Outcomes, Not Just Tasks

If your external team only sees tickets, they’ll miss the real goal. Tasks tell them what to do, but not why it matters. Make sure they see the bigger picture by sharing the outcomes you're aiming for and the impact you're trying to create. 

Help them understand what success actually looks like, not just what needs to get built. And set clear decision-making guardrails so they have the freedom to move fast without getting stuck waiting for approvals.

3. Treat External Teams Like Internal Partners

External teams do their best work when they’re treated like part of the company, not just vendors. Invite them into demos, standups, and retros so they stay connected to the product, the goals, and the decisions. 

Build feedback loops that go both ways, and take a moment to recognize good work, just like you would with your internal staff. 

4. Create a Shared Definition of Done

Finishing a task shouldn’t mean different things to different teams. Set clear expectations around what "done" actually means, in terms of code quality standards, required test coverage, and documentation updates. 

Make sure both teams know who’s responsible for handoffs, reviews, and handling escalations. When everyone agrees on what finished work looks like, you avoid missed steps, confusion, and costly rework.

5. Track Workload and Burnout Across All Teams

Moving fast shouldn’t come at the cost of burning teams out. If you’re only tracking delivery, it’s easy to miss the early signs of overload until quality is affected or deadlines start slipping.

Keep a close watch across both internal and external teams by: 

• Monitoring how task queues are growing
• Tracking how sprint velocities are changing
• Checking if people are consistently logging extra hours

Want a clearer way to spot hidden workload issues before they slow you down? Chrono surfaces that, along with time drift and delivery slippage across both internal and external teams. That way, you can catch overload early and keep velocity on track.

How to Measure Success in External Development

It’s not enough to hire an external team, you need to know if they’re actually making an impact. 

For this, you should: 

1. Track Key Performance Indicators (KPIs)

You might be moving fast, but without tracking the right KPIs, you won’t know if you’re in the right direction. 

A few of the most important ones are: 

• Cycle time by team: Tells how fast work can move from "started" to "shipped." If your cycle time is short, it usually means your internal and co-development teams are working well together, and getting features out the door without roadblocks.
• DORA metrics: Includes deployment frequency, lead time for changes, change failure rate, and time to recovery. These metrics tell if your teams can deliver updates quickly and recover fast when things break.
• Code review response time: Nobody likes waiting days for a code review. Fast review times keep the momentum going, prevent task pile-ups, and show that both sides are actively working together. 
• Feature delivery velocity: Measures how much real product work is getting out the door. Healthy velocity reflects that your external developers are contributing features that move your roadmap forward. 
• Cost per deployable unit: Looks at what it costs to ship working code. Monitoring this keeps you aware of whether your co-partnership is scaling efficiently, or just becoming expensive without the output to match.
• Resource allocation: It is all about making sure the right people, the right time, and the right budget are focused where they will have the biggest impact. 
• ROI: At the end of the day, it’s simple: is the investment in your external team actually moving the needle? Tracking ROI tells you if all the resources you’re putting in are leading to real business wins. If you’re not seeing a clear return, it’s a sign your external setup needs a serious rethink.

2. Use Shared Dashboards

When both your internal and external leads are looking at the same timelines, tasks, and budgets, it’s much easier to catch issues early and make faster decisions. A shared dashboard, such as that offered by Chrono, keeps everyone aligned on real priorities, not just what’s in their inbox. 

Run Quarterly Retros

Every quarter, bring both teams into the same room, virtual or real, and have an honest look at how the partnership is working. Where’s communication breaking down? What’s slowing the handoffs? Spot the small cracks early, before they have a chance to turn into real blockers.

Done Right, External Development Feels Internal

When external teams are set up the right way, they don't feel external at all. With the right partner, clear expectations, and real visibility, co-development becomes an extension of your house team, not a separate operation.

Platforms like Chrono give you live insights across blended teams, so you can stay on top of performance without hovering over every task. Whether you need better tracking, extra capacity during peak times, or help hiring the right developers, we help you scale smart without losing control.

Manage external teams like they’re part of your own. Sign up for Chrono now! 

FAQ’s

What is external development?

External development means bringing in outside developers to help build or support your product. It’s more than just outsourcing one task; it’s about working together to create something bigger.

What’s the difference between co-development and outsourcing?

Co-development is a real partnership where internal and external teams work side-by-side. Outsourcing is more like handing over the project and letting an outside company run with it.

How do I keep control of product quality with external teams?

Stay in control by setting up code reviews, using strong testing pipelines, syncing sprints, and tracking progress with tools like Chrono. It keeps delivery quality high and problems visible early.

When should I consider external development?

Think about it when your in-house team is overloaded or you need quick access to skills your team doesn’t have yet. It helps you move faster without burning out your core team.