Outsource or build an internal development team? A question that pops up in nearly every firm that aims to build a digital product. This article might help you decide which approach is the best for you. Let's dive into it!
Who can outsource software development? Basically, every firm – be it a startup or even a large enterprise. You should ask yourself which path will be most efficient and beneficial for you – will you rather build internal knowledge through in-house dev teams or find yourself a reliable partner that will take care of the development? Both strategies can be successful. In fact, a large part of our clients uses a mixed approach to maximize their agility and output. Check out the 11 benefits of outsourcing you should know before you call the shots.
1) Blazing fast team scaling and instant access to resources
Speed is crucial and often determines the failure or success of a project. Outsourcing is amazingly flexible and helps you push forward through your roadmap at the speed of light. Enlarging internal capacities is difficult. Imagine you want to hire 5 new senior high skilled software engineers. That can take months, and you'll probably need help from a capable HR professional. Even if you manage to find candidates, there is no guarantee that they will collaborate effectively or fit your company.
On the contrary, when you choose to outsource, you get a ready-to-go team that has already proved itself, fits your requirements, and can quickly boost your capacities. Usually, it takes only a couple of days or weeks to set up the partnership, straight out processes, and get to work, while onboarding new employees take way longer. This time gap is almost impossible to fill, so a new internal team always drags a burden from this point of view.
2) Full access to essential knowledge
By hiring an external company, you don't only get the workforce but also a lot of knowledge. There are many different types of knowledge in software development. Still, they are all equally important – you need technical knowledge to implement the right technologies, product knowledge to understand product needs and prioritize accordingly, or industry expertise to anticipate the exact challenges that lay ahead.
Let's say you need to migrate to the new database but nobody from your company has advanced knowledge of the required database. You could let your employees create the solution, which will probably lead to many setbacks and dead ends, or you can hire an external experienced dev team and gain this knowledge immediately.
For example – we've built many products in the automotive and other industries. Therefore, by hiring us, you automatically gain our expertise in the field that can save you from costly wrong moves and help your product succeed. Your company can't have all the necessary skills. Thus it's way more effective to collaborate with reliable dev houses that can provide the latest methods and save you money.
3) Fresh ideas and unbiased external view
We always stress the crucial role of unbiased feedback in product development. Sometimes all you need is a fresh and broader perspective on the matter. I experienced it many times – in the team, you usually think that the use cases for the product you are building are apparent and crystal clear. But then someone who hasn't been involved with the project comes and says: "I don't see how this is helpful" or "I don't understand how I will be able to use the product." So you step out, try to take a different standpoint, and realize that adjustments are necessary.
Good dev houses will flood you with feedback and fresh ideas because they have a lot of experience from many different fields. Use this external power as a competitive advantage – it's always easier to implement relevant input in the product's early stage than after it has been finished.
4) Stress-free flexibility
The moment you hire an internal developer, you need to keep him occupied with relevant tasks. Otherwise, you waste your money. That sounds easy and obvious, but many companies get burned by this approach. Why? Because they don't realize that an internal developer will be lost and useless without other essential parts of the development team. Not to mention that hiring a developer is not an easy task – posting a job offer, communicating with possible candidates, preparation of the contract, and other steps will take your time, and you might not even achieve your goal.
Also, from a legal point of view, when you hire someone, you can't fire him the second day. But what if you don't have enough work for the internal person because you need help only with specific projects from time to time?
Software outsourcing gives you the option to use a team just for a single project or specific period. By hiring a remote team, you can scale up and down its size in only a few days.
5) Cut your costs
As we mentioned, hiring, onboarding, and housing staff is expensive. According to this study, in 2016, it took on average 42 days to hire a person and cost up to $33,251, as described here. Plus, there are much bigger expenses to manage development. You need CTO, managers, HR who will cost even more money. Save your time, energy, and money by having instant access to a ready-to-work team instead of searching for internal employees who will fit your collective. Outsourcing projects is cheaper than hiring each employee individually and building internal teams. Moreover, outsourcing to Eastern Europe may reduce costs by another 50 %. You can also save money by implementing nearshoring.
6) Stay focused on core business
A project can be outsourced, your strategy, product vision, and business development cannot. Don't get caught in the micromanagement while the big decisions slip through your fingers. If development eats up your whole calendar and brain capacity, so there is no space for business growth, you won't succeed in the long term. Let specialists take care of software-related tasks so you can concentrate on managing your business.
7) Clear responsibility for the tech part
When you hire an external agency, you give them responsibility for your business's particular part and its success or failure. That's not an easy call, so you must choose the right partner. Check out 8 signs of a reliable dev house that might help you.
If you manage to pick the right partner, it's a win for you. You can rely on his knowledge and skills while not having to deal with the tech part, which means more time and energy for your business's strategic elements.
8) Pick the world's best talents brains
Software agencies and dev houses are full of gifted and experienced people. At least some of them, haha. With nearshoring or working with foreign companies, you can access the most promising talents worldwide that you wouldn't be able to hire or afford in your country. Think globally, act locally!
9) Low product maintenance costs
Every software or app needs constant maintenance and support. Those are not big tasks, but they have to be done promptly so that everything works properly. When you transfer internal people to a new project, it's inconvenient to divide their focus. Therefore it's easier to hire flexible external power, which will help you out for a couple of hours per week.
This approach proved valuable when a company has a running product on the market that must be maintained, but it's also developing a new version from scratch.
10) Use the dev house to boost your own knowledge
Software agencies are experts in their field. They have time-tested methods and approaches that were successful in dozens of projects. So if you want, you can learn a lot from them!
I witnessed many clients embracing our frameworks and processes that helped them be more efficient – like setting up and running the development team, outlining the development processes, working productively remotely, etc. Acquiring such knowledge would take years and multiple tries and errors to gain without an experienced external team from which you can learn.
I experienced the same thing when I used to be on the client's side. I saved so much time and avoided many errors thanks to the external partners simply by learning what they already know.
Cooperating with a good external agency is an enriching experience for both sides.
11) Lower risk
By outsourcing, you decrease risks in many fields. As compromising internal projects, learning through failures, or fixing technical issues. You get an experienced team that can take care of itself and has all the required skills and knowledge. Therefore you mitigate the likelihood of a complete blunder.
Secondly, you lower your financial risks. Not having to onboard employees and being able to scale up and down as you need is a big help for driving a healthy cash flow. You also don't have to invest a large sum upfront.
I hope I gave you a good overview of outsourcing's benefits and helped you decide whether to go one or another way. It's important to know that all that's written above applies only if you hire a reliable and trustworthy outsourcing partner. Otherwise, the outcome will be very different. I experienced both.
Reach out to get more information.