In-house software development vs outsourcing. What to choose ?

There are many reasons why companies are faced with a choice – an in-house team of IT professionals: programmers, server maintainers, engineers and more, or handing over these responsibilities to an entity dedicated to providing technology-related services to a wider customer base. Certain considerations should guide these considerations, and we will consider two scenarios in which outsourcing and an in-house IT team will work. We will also present an alternative which, although involving the outsourcing of technology-related services, meets an ever-growing customer need. It is worth knowing that the IT industry constantly creates for its customers such an offer as flexible as possible.

Outsourcing vs in-house software development – ​​which is better to choose?

Let’s take an example: we are considering the choice between in-house software development and outsourcing in two companies:

– the first company sells car parts: it uses an online store for its sales process, which is managed by an internal team of IT specialists. However, several functionalities must be developed within the e-commerce platform. The company has an HR department with well-functioning recruitment processes.

– The second company has so far only sold auto parts via external sales platforms such as auction portals. Due to the fact that this activity must be developed and that it is part of the strategy to go to other markets: it was decided to develop a mobile application and a web platform where one can buy the necessary auto parts. There is only one IT specialist in the company, who mainly takes care of the computers and networks used in the office.

Depending on our situation, our decision on choosing between software development outsourcing and in-house team should be different. We also emphasize that the examples presented here should not be treated as “absolute”. Just as there are many businesses in the world, there are many unique business needs and goals. Therefore, each case must be treated individually and taking into account the whole. There may be only one reason for choosing another software development option in your company.

A company with its own simple sales platform

Considering the fact that the number one company already has its own sales platform in the form of an online store and only needs to develop a few features in its store, as well as already has its own IT team consisting of specialists who maintain the infrastructure – it will be more optimal to keep this model of work on the software. The project that this company intends to develop is not particularly complicated and only developing the team already present in the company can be quite sufficient. Given that in this company the recruitment processes are present and, as we know from the basic assumptions, they work correctly: it can be expected that finding the right specialists who will be able to develop the desired functions at time will not pose too many problems for this company. The costs of such recruitment should not be high, and it will not take long to find the right programmers/software engineers.

On the other hand, the team that will be hired for this project will most likely stay with the company for a longer period of time – so it will not generate too much cost later on. Overall, given the scale of the project, the capabilities of this company, along with the existing employees, should be able to seamlessly achieve the functionality that matters most to the business. In such a case, indeed, the best way will be to develop your internal software development team. The company’s current employees already know each other well, have created processes and procedures. This does not mean, however, that outsourcing should be completely barred. Consulting a company such as a software company can be a very useful experience for this company and guide them on how to create even better features for their store. There is another option to grow this company’s team and outsourcing can help here!

Many companies engaged in providing IT services to their customers provide access to innovative models of cooperation. It turns out that outsourcing adapts to the needs of its customers and often exceeds the boldest expectations of companies that have not even heard of this type of solution before. Many companies engaged in software development offer the option of “hiring” their software engineer for the duration of an internal project. In this cooperation model, we have quick access to the specialist we are interested in, who will work with us only for the duration of our internal project. When the project ends, the “hire” period of the developer also ends and we no longer have to worry about the cost of hiring a given specialist. Such a cooperation model has emerged in the market because nowadays many companies do not necessarily need to develop their team over a longer period of time – it is not uncommon to require an increase in the number of people on the team just for the duration of a project, small compared to the scale of the whole company.

In such a situation, we do not have to bear the recruitment costs for a position related to software development. A specialist is immediately available. Our partner to whom we entrust the project must give us the guarantee that he will choose the right employee who will be delegated to our project. If it turns out that we are not satisfied with this person, or that they do not have the desired skill set that we need for our project, the partner is obliged to find us a better candidate for the position. . Such an employee will most likely be delegated to us remotely – not a big deal these days. The SARS-CoV-2 pandemic has changed the attitude of many companies towards remote working and it is now an unwritten norm. Although, of course, in projects where the presence of a developer/engineer in the company is necessarily necessary, the “developer hire” model can be a bit problematic. Despite its great flexibility, this model will not be able to solve absolutely all problems.

A company that wants to create its own store and mobile application

In this case, we are already dealing with a much larger project that will require a team of experienced developers. As we know from the basic information about this company, there is no such group of people and the needs are very wide. Also, due to the fact that this company probably does not have a lot of experience in the IT industry, recruiting for positions related to software development could take a long time, or be very expensive. Therefore, in this case, it would be wise to take advantage of the opportunities that come with working with an external software development company, i.e. operating in a de facto outsourcing model. The company that is going to create software for us is probably very experienced in developing programs, mobile applications, websites and other IT solutions. Moreover, cooperation with such an agency will be cheaper than hiring a whole team “from scratch”.

In the outsourcing model, we do not bear the costs related to recruitment and also receive a guarantee regarding the quality of the software. If something goes wrong in this regard, our partner will be obliged to fix everything. Additionally, companies that develop software for their customers have a much wider range of specialists on their teams – in case we need help from specialists in UX/UI, software security, team devops, blockchain and many more – we’ll make it easy for us to access these people. Moreover, in addition to the money expressed in the costs associated with recruitment, we also save time and peace of mind. It is also worth noting the enormous flexibility of this cooperation model – if during the project our needs change, the company that creates the software for us will be much better prepared to meet them.

Software development companies today are also able to provide advice on business matters. In fact, they also provide consulting services related to IT activities. This is what is done at Concise software – more than 10 years of experience in the market means many projects carried out for the biggest brands in the world, many hours of workshops and many satisfied customers for whom we provide complete IT services. For many companies, such a model of cooperation – regardless of the sector – has proven to be a chance to enter the world of the many opportunities resulting from owning their own high-quality software. Today’s world can no longer function without it and we fully understand the changing needs and expectations of the market.

Which collaboration model will work best for you?

Many companies, regardless of their industry, will need to develop software in the near future. The needs are constantly growing and, at the same time, the emphasis is on the quality and speed of project implementation. Many companies may feel confused by cooperation models and software development methods. Before making a decision, it is worth contacting professionals to discuss the matter in depth.
The article was written in collaboration with the concisesoftware.com

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