Software Development: In-House Or Outsourcing?
Posted 4th December 2013 at 06:37 AM by MobiDev
Outsourcing has acquired a stereotype of being cheaper but far less reliable than in-house software development. It's easy to agree with the 'cheaper' part, otherwise outsourcing wouldn't be such a popular solution nowadays. And it is, both for mobile startups and for businesses with different core competences. That's even more acute in terms of budget, if the need for software developers is temporary. If you are in this situation when you need nothing less but a right choice, which questions should you ask yourself? How will you understand what you exactly need? If you are still in doubt, here we would like to share our thoughts, which may prove useful to you.
Short-term or long-term?
For a short-term work on a new project it's reasonable to hire a remote contractor. The end goal of the project is usually rather clearly defined, and if the project is admittedly small (or is a separate section of a bigger project), it makes sense even more to outsource development for a limited amount of time.
For a long-term collaboration opinions may vary. On one hand, if the company's strategy requires an IT department, it can be assembled for constant work. On the other hand, many businesses have fruitful long-term partnerships with offshore companies. Security issues, which are also often raised, are usually managed with corresponding agreements. Here we can say that it's a matter of finding a good contractor.
If you have to assemble a team from scratch, should you?
Assembling an in-house team concerns many challenges. Most of them are easily overcome by outsourcing your development to an IT company. The business owner doesn't have to supply the team with equipment required for software development - neither with spacious rooms to house this department. It's also problematic to establish efficient workflow. If you build in-house, with a number of full-time employees you seemingly get better control over costs (which are salaries). But it's more expensive to provide an IT specialist with all the necessary equipment, possibly training or other hidden costs.
All of these problems are initially absent if the business owner hires an offshore/nearshore company for development activities. A specialized software company has all the abovementioned, plus teamwork, experience and well-established management. What's more, it's the opportunity of implementing the full cycle of development by one company. However, many business people may state that it's extremely hard to find a reliable offshore development team to work with, especially when a bad personal experience took place.
What about your existing team?
It can be that you already have an in-house IT team that handles your tasks. The further decision depends on your resources, the current workload of your team, their skills and competences, and the priorities of your new project and the ones your employees are currently working on. If your team is fully capable of doing the required task, you'll answer this question quickly and move on to the next one.
Do you have reserve budget?
That's the question that defines much. On one hand, you need to finish the project with minimum budget consumption. And generally outsourcing costs much less, and that's the ace up the sleeve of offshore companies. On the other hand, software projects can never be accurately estimated beforehand, and often take more time and money than initially considered. But that's not the problem with outsourcing, rather with the specificity of software development.
Do you have enough time for communication?
One of the most frequently stated advantages of having in-house IT staff is that they can immediately react to any problem, they are always within reach, you can discuss everything face to face. Distance is distance anyway. But a good, flexible IT company will suggest communicating with you the way it's convenient for you. Be prepared that you will have to participate in the project - so that the company would be able to create the product you want to receive. Professional project managers are the ones who can save your time in this case. Communication is one of the most important issues of collaboration with an offshore contractor.
Both solutions have their own advantages and drawbacks. If we take yet another look at these thoughts, we'll see that building an in-house tech support team will not be reasonable if it doesn't receive cost-efficient workload and all the necessary work conditions. In-house work costs more and should be your core competence. Outsourcing can become the most perfect cost-saving solution, with the needed professional teams at your service. You share risks with your contractor, and you are able to focus on the main business directions without excessive distractions, maybe on the marketing of your future product. As for difficulties, they take place, not only in outsourcing, and you should be prepared to them.
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