in: for business / for startups

Build in-house or outsource – that is the question

In recent years, companies and organisations have constantly been faced with a dilemma – outsource certain tasks to an independent company/freelancer or hire in-house employees.

Outsourcing is possible in many fields of business, with software development being one of the most prominent examples. This is primarily because businesses often require tailored solutions and it is difficult to employ one person with all the required skills.

This is, however, a debatable matter with some industry experts supporting the idea of outsourcing, while others are in favour of hiring in house employees. Before we dive further into this argument, let me give you some examples.

Examples

Skype, a multi-billion dollar video call company that was acquired by Microsoft for $8.5 billion, started as an outsourced project. The founders, Niklas Zennstrom, and Janus Friis outsourced programming tasks to Estonian programmers who executed their ideas and Skype was born as a result. As of today, there are approximately 4.9 million active users of Skype with the mobile application recording over a billion downloads. How impressive is that for an outsourced project!

Alibaba.com – probably I don’t have to explain what company is that, but this example shows, that you don’t have to outsource core of your business, but the only part where your employees are not enough.
Jack Ma (founder of Alibaba) writes in ‘The Inside Story Behind Jack Ma and the Creation of the World’s Biggest Online Marketplace’ about outsourcing website creation to the US company in the early days of Alibaba.

WhatsApp – another amazing example. Long story short, WhatsApp moved most of its development work to Russia to reduce costs, used talent located there and scaled much faster. It was done when the company had about 35 employees. Later, some of the Russian developers have been relocated to the company headquarters in Mountain View.

Pros and cons of building software in-house vs outsourcing

Dedicated software is in high demand. This is because businesses nowadays offer unique solutions to their clients that cannot be automated using general over-the-counter software. For this reason, business owners are forced to seek bespoke software solutions.

Due to the rising demand for custom software, businesses frequently find themselves in a predicament. Should they hire a developer to take care of all their software needs? Should they outsource? For this reason, let us have a look at some of the reasons to consider outsourcing.

  • Focus on core business value

Hiring in house developers requires creating a proper organisational structure. A business will need to recruit the right people – not only coders but also project managers, testers and so on. This not only increases the operational cost, but also the operational risk in case of an economic slowdown.

Hiring a specialised company mitigates the risks and ensures that your own employees can focus on what they know best – doing business and with proper input, a software company will produce a system that achieves all assumed goals.

  • Cost-Effective

Cost is always a major factor in the decision-making table of any profit-driven company. For this reason, outsourcing has been an amazing option for businesses. Statistically, In-house experts are much more expensive in comparison to their outsourced counterparts, who are equally qualified. Besides, when outsourcing, you do not need to incur operation costs like purchasing new equipment to get the job done which greatly reduces cost.

  • Access to new talents and creativity

Software outsourcing is helpful when you are looking for new talent and creativity in the industry. It gives you a wider range of professionals to choose from. Business owners benefit from highly skilled and proficient remote workers who deliver quality services.

Although outsourcing is good for businesses, there are a few hurdles along the way. The major ones being the possibility of compromising quality and standards when you land a wrong outsourcing partner.

Another issue might be a different culture between your company and outsourcer – this should be definitely discussed in details before the start of the project.

Why cooperation with the outsourcing company is easy

A case of concern for most business owners and employees is the control. When software outsourcing, you let go of some control over the project and for that reason, cooperation is key.

In this new age, services such as trello and slack have been made available to facilitate easy work collaboration and project management keeping everyone in the loop. This makes it quite easy for businesses to co-operate with the outsourcing companies ensuring smooth workflow.

Where to outsource

The main challenge in the software outsourcing process is how and where to find the right company to outsource to. There are several routes to take, several regions to consider, and even a wide price range to accept. Research is always needed to understand what you need and what you expect from the company where you will outsource your project.

Region advertisement

We work with many polish programmers. They have risen in the ranks and are recently sought after by many companies in the US and Europe. In a study by HackerRank that involved over 1.5 million developers working through their platform, developers from Poland came in 3rd place, behind China and Russia in solving programming challenges. This gives an even clearer picture as to the level to expect form polish software developers. In the same study, the US was ranked 28th followed closely by the UK at 29th.

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