To outsource or not to outsource is a question that pops every now and then in nearly all businesses, tech or otherwise. The dilemma being the answer is never clearly black or white. One thing for sure, present times call for an increasing demand of information technology in almost all businesses in every industry.
The IT yen is no longer limited to a firm’s network or security; in fact, it now encompasses all business departments from human resource, supply chain, marketing, accounting, sales to everything in between. Although networking and security still entails a larger part of any company’s IT needs, the increasing demand for cross platform and cross departmental mobile and enterprise level applications can’t be overlooked.
Moving back to the question at hand, which approach works better for the growing challenges of a business’s IT needs – in-house team OR outsourcing? Let’s explore.
En route to setting up an in-house team? Good for you!
If you are keen on having an in-house team to handle your IT solutions, then you are not alone. Many entrepreneurs strongly believe that in-house teams are the key to any business’s success. As Mark Suster, a former entrepreneur and now a VC, puts it: “If you don’t have somebody inside your organization who is setting the technology direction then I’m convinced you’ll never head for greatness.”
In-house teams are actively advocated by some entrepreneurs for their following gains.
Maintaining an in-house team of IT professionals adds the huge advantage of having the required IT experts in the closest proximity. Any crisis or emergency situations can be dealt pronto, without any delay. For instance, a crucial security breach can be handled with greater urgency by an in-house team. As it would spare the time spent in looking for a specialised expert, calling them up only to know that they can squeeze you in for the next week. So it would be safe to say that turn around time for fixing a problem is much less for in-house teams than outsourced ones.
Having an appropriate in-house development team means, it’s culturally in sync with all the other departments within the company. This allows for effective communication, greater productivity and quick problem solving. Not only are they a culturally good fit for the organization, but are also well aware of the direction the business is headed towards. They better understand priorities; hence, they can readily stir the technical or developmental aspects of the company in the right direction. This can be invaluable for the firm, as it can amount to consistency across departments and overall stability and prosperity.
In a single organisation all the interests of its employees from the top management to the entry level workers are fully aligned. If the company thrives, everyone benefits. Needless to say, the in-house dev team will be far more motivated to meet the company’s goals and objectives than an outsourced freelancer who has no direct vested interests in the company’s wellbeing.
But sometimes they are not the answer…
In-house tech teams don’t come without their drawbacks, and sometime these drawbacks largely outweighs the benefits. A few of the significant ones are discussed below.
Hiring the right tech team is a time consuming and tiring process. And time is of essence for most growing businesses. Firms do not always have the luxury to spend months building the right mix of an in-house dev team. For instance, you can’t spend 3-4 months hiring a competent dev team for a project that needs to be up and running in the next 8-10 months. This is where outsourcing becomes the ideal option, as they already have an experienced pool of dedicated developers, designers, project managers extra readily available for you to hire. You just have find one right agency, which is far more easier than finding a whole bunch of people who work well together.
Hiring a talent of permanent in-house IT personnel is not only time consuming, but awfully expensive as well. First, there is the cost of the hiring and recruitment process itself, then it’s their annual salaries, package benefits, training costs and other overheads. Majority of these costs can easily be avoided with outsourcing. When you look into offshore IT assistance, you skip the cost of direct salaries, perks, trainings, required equipment and much more.
Competence and Motivation
You might be able to take the time out to hire the best software development team and pay them the hefty salaries they deserve, but keeping them motivated enough to stay over the long haul is another challenge, unless you have a consistent supply of projects. Uneven workload might give rise to tardiness and demotivation. Then there is the issue of lack of innovation from an in-house team, as they don’t have the experience of working on a variety of versatile projects that an agency does.
The joys of outsourcing…
Outsourcing can be the ideal solution for your firm, when the work can be done better at a lower price outside than inside the company. As Lee Kuan Yew, the former prime minister of Singapore, rightly puts it, “If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.”
Of the many joys of outsourcing, let’s throw some light on a few fundamental ones.
An off-site IT or software development agency can give you the smooth flexibility you looking for. They allow you to add or remove resources as per the demands of your projects, which has a significantly positive impact on costs. Also having greater flexibility means that you can pull the plug on your agency whenever you want, which is not something easily achievable for a permanent in-house IT team.
A solid offsite development agency has the right mix of design and engineering experts that pull your project towards success. Outsourcing allows you to scale up the professional specialisation of the team towards the specific needs of the project. Professionals hired via an agency can offer you both innovative and practical solutions. They have the edge of working with multiple clients from same or diverse industries, and have first hand information regarding latest trends and workable solutions.
If you are looking to outsource your technical undertakings, cost is another important factor you
should consider. Outsourcing would not only saves you the recruitment, employee benefits and several other overhead costs, but also finds you better qualified resources at much lower rates overseas than in your home country. When looking to find such competent yet affordable resources, the best region to look into is the Middle East and Asia – where there’s a huge supply of highly qualified designers, developers and engineers.
The sorrows of outsourcing…
When it comes to working with a development/IT agency from a different time zone, scheduling conference calls and meetings can be a challenge. One has to compromise on scheduling meeting time beyond office hours and usually it’s the agency.
An off-site IT vendor will not be as familiar with the culture and pace of your organisation, as your in-house team. There might also be language and communication barriers. Every firm has its own technical jargon that an outsider might not be quick to learn, especially for short term projects.
It is much easier to control the development quality of your project’s vitals when you can physically approach and talk to the developer, than when working through a list of communication tools and protocols.
Something in between..
Most companies go for the hybrid approach. Keeping an in-house team for the most crucial IT or development work and bringing in extra help whenever things get sour or a bit too much for an in-house team to handle. This style take on the benefits of both in-house teams and outsourcing.
Opting for the hybrid approach has been the key to success for most top brands worldwide. Market leaders like Apple, Alibaba, Skype, Whatsapp, Slack etc. have time and again outsourced their design, development and other IT related needs, because they could find better quality yet cheap work options outside.
So what should you DO?
Well there is no hard and fast rule of thumb that applies to all. What works for one might not work for another. Some projects might go better if you have dedicated in-house teams working on them, whereas some might need to be partially and fully outsourced, depending on a number of variants.
However, it would be safe to conclude that an hybrid approach is something that has worked for many in the long run. An in-house team might not be the ultimate solution to all your problems, especially in today’s highly competitive market. To grow beyond a certain threshold requires bringing in fresh short term talent for an extra hand and a little perspective.