Across the world, businesses are facing increasing pressure to compete and grow their operations to the next level. Technology is now a competitive cornerstone of most organizations, but web and mobile platforms have advanced so aggressively in functionality that many businesses are struggling to keep up. Client’s demand, tolerance and expectations have changed over the last few years and approaching new development projects like you did 5 years ago is not an option. Many companies are asking, should I develop in-house or outsource?
The problem is not a new one, but the technology playing field has changed. Every scenario is still unique and each company faces a delicate decision on whether to outsource their development or complete it in-house. Here’s what you need to consider before deciding to develop your next project in-house or hire external expert team as an outsourced solution:
The Arguments for Staying In-House
Over the last decade there have been several popular arguments for developing your web or mobile application in-house. First, since your staff is literally under the same roof, it’s much easier to oversee the project management directly. Depending on your staff size and expertise, you can add or remove resources to the project as necessary to hit your objectives and timeline. Furthermore, there shouldn’t be any unexpected cultural or behavioral conflicts since these people already work in the company.
The in-house route also makes it easier to own and secure your source code. There are no loose ends or question marks when it comes to ownership of the source code and you won’t be left scrambling trying to track down external staff if a problem arises some months/years later.
In the long-term (if you stick with the same technology/platforms), it is typically cheaper to produce in-house. The core knowledge stays with the team and, for tasks such as customer support or product maintenance, the staff only needs to be trained once.
The Arguments for Outsourcing
On the flipside, in-house development is much more expensive in the short-term and can put strain on cash flow as new hiring and training will almost certainly be necessary to manage the steep learning curve of a new project. When hiring new team members you first need to source qualified candidates, negotiate a full-time contract, train them, and cover all new overhead expenses (ie: payroll, workspace, computer, software licenses, etc).
Just as project management may be easier with an in-house team, it requires significant time/resources to manage properly and may even require hiring a project manager dedicated fully to the new build. Furthermore, unforeseen resources may be required to complete the project such as designers, additional developers, quality assurance testers or other specialized niche experts. Although the cost of software licenses are trending downward, maintaining several at a time will add up. Hardware can also be costly and you will likely need to maintain the most up-to-date computers, tablets, mobile devices and operating systems to properly execute quality assurance testing. Lastly, you should be prepared to bring in external consultants in the case your in-house team gets stuck with your ever-expanding library of hardware and software products.
A Third Option: Offshoring
While technically the idea of “offshoring” falls on the outsourcing side of the debate, it generally implies a significant cost savings otherwise unavailable in your market. Offshoring is the practice of placing some of your company’s requirements to an overseas supplier in order to take advantage of lower costs. Since the early 90’s, the internet has vastly disrupted global business in both the production and digital services landscape.
While the temptation of drastic savings may be difficult to counter, offshoring often comes at the expense of other benefits such as time zone challenges, language barriers and other communication challenges that come when face-to-face interaction is an impossibility.
Our take on offshoring is simple. Keep it reserved for basic projects that require minimal communication to be properly understood by the overseas company. Then, make sure you find an overseas partner that has a positive track record and trustworthy testimonials.
In the rapidly advancing and diverse technology landscape, outsourcing will likely be the preferred option for new project builds. Outsourcing allows you to hire the “right person for the job” every time and, as technology advances further into niche domains, this ability will be priceless. Even large corporations with billions in their coffers understand that outsourcing is typically the cleanest, most inexpensive and most accountable method to get the job done right the first time.
This concept is especially true for developing new products and innovative solutions. Staying one step ahead of the market is mandatory for running a successful and sustainable business. Outsourcing offers a milestone and delivery based pricing structure. Plus, external consulting teams have seen it all, so you can take advantage of their experience. In Mobile Jazz we like to think we are the right external development partner that offers you a skilled team available instantly, ideal for building an MVP and testing new ideas.
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