Because the internet has connected people worldwide, the outsourcing industry has grown by leaps and bounds over the past two decades. Another reason for this growth: Outsourcing gives entrepreneurs access to a greater pool of talent and low-cost labor. Their ability to delegate responsibilities helps them free up more time.
Key Factors to consider
Although, you need to consider and compare many factors but focusing on the right factors would enable you to make your decision easily. So let’s see the factors.
Outsourcing your project to a company located offshore is always a more cost-effective investment than hiring in-house team. In-house team, you would require to hire a team of web developers and that could be more costly.
Skills and Experience
If you have access to a crew of techies with evolving skill sets, it will undoubtedly help your company to survive and sustain. You are not just building a website but whole IT bundle when you think of running a business based on in-house team. This is where outsourcing can help and would have more talent handy to understand, develop and execute your project. You can also get people who are experienced. However, risks are associated with this option too; for instance, your project might end up costing more than you had anticipated. Or, they may fail to deliver the right product on time.
When your team is in-house, you will no doubt have full ownership and control over every aspect of the project. A good outsourcing firm will always keep you involved in the process through project management tool, emails as well as skype conversations. You would be able to communicate with the development team throughout the project lifecycle.
Building up an in-house IT team means that they can be trained to the company’s specific needs, and they will always be available when needed.
- Maintaining an in-house team means your software development projects will probably be more stable. They will stick together till completion of project or to misinterpret a critical project requirement.
- Building an in-house team means you can hire and train employees to fit your specific business needs over time. This can be best in the long run in terms of better product quality.
- Carrying out work in-house gives you complete oversight and control of how the project is conducted.
- Everyone is in the same office or company the team and clients, it’s easier to be on the same page. This means that the turnaround time from identifying to resolving an issue is typically much faster.
- Less costs: Because you don’t have to pay full-time wages to outsourced workers, the cost of outsourcing a project is generally lower than the cost of developing that same project in-house.
- Experienced: IT grows more complicated every year as new languages, ideas and frameworks emerge. Outsourcing allows you to contract with IT professionals to get exactly the knowledge and expertise you need.
- Less stress: Using outsourced talent for areas that you don’t know well frees up time and effort for your in-house team to concentrate on their own core competencies.
- Scalability: There’s no limit (except your budget) to the number of outsourcing teams you can work with. For example, if you need to speed up the pace of the project, you can use another outsourcing company to help with some of the work.
Let’s take an example of product development and challenges of In-House and Outsource
In-House Product Development
- Costly affair: Doing development in-house requires you to have up-to-date software and hardware, so you’ll have to make technology purchases on a regular basis.
- High Price: In-house developers are full-time employees who need you to provide them with salaries and benefits. This will add cost to the company
- Slower development: Because your in-house team will remain fairly constant throughout the project, you’re stuck with the developers you already have. This can be a problem if you begin to fall behind on your milestones.
Outsourced Product Development
- Cultural difference: From language barriers to different time zones and professional attitudes, working with an outsourced development team can create a number of obstacles to optimal collaboration.
- Privacy: You may have to place your confidential data in the hands of a third party, which can present legal or regulatory issues.
- Risk: There will be always risk involved when you are working with an outsourced development team, especially one you don’t know well; missed deadlines and poor-quality result delivered.
- Dependence: If you can’t perform tasks like support and maintenance yourself, you’re forced to be dependent on the outsourcing organization to provide these services. If you don’t deliver then this could be problem you would have to search for different alternatives.
Comparison of In-House and Outsourced Development
- Quality: It all depends on company’s objectives. Outsourcing can help you work with domain experts not available within your organization, but in-house development will build a stronger long-term internal team.
- Cost Effective: Outsourcing has the slight edge here, depending on which companies you work with. In many cases, the product can be built for significantly less money with a quality which you cannot get In-house.
- Time: Outsourcing can save on time if you contract with multiple companies to speed up the process. However, it also introduces the possibility of delays risks.
- Final Product Quality: In most cases, in-house development results in a higher product quality because you have complete visibility and control over the project from beginning to end.
Again, it’s important to emphasize that there’s no one right answer when it comes to in-house vs. outsourced team. If your startup is in the early stages, for example, then you may prefer to outsource because your technical team isn’t yet as strong as you would like. If you’re in the growth stage, on the other hand, then you may want to build your team for in-house development. Making the right choice for your startup will require a careful and honest assessment of your business needs and objectives.