Written by Cort Buchholz
6 minute read
Choosing a high quality software development team to build the latest mobile or web application your company needs can be stressful. You’ll encounter a myriad of opinions on the topic, many boast about the benefits of outsourcing, many argue that a dedicated team can only be found in house. Considering overall project requirements, budget, and required time to market are among the most important qualifications to evaluate before making a decision.
We often encounter statements like; “I’m planning to build an eCommerce Application. Should I outsource or hire an in-house team to build my app?”. Our response is simply a slew of clarifying questions.
Answering these questions on a per project basis gives us understanding and insight into whether or not your team should leverage an outsourcing partner, or build an in house team. Your goal is (always) to cultivate a long term competitive advantage for your digital product.
We’ve taken the time to debunk some common misconceptions and break down the key differences, pros, and cons of outsourcing, offshoring, and in house software development.
Development of in-house software involves employing an organization’s resources (in-house unit) to create or execute software according to the needs and requirements of the client. Within larger corporations, the in house software development process looks a bit like this: There’s a flexible team of designers and developers that move around within the organization, to work on and deliver for the needs of other parts of the organization. However, the arrangement nearly mirrors what you might see with a professional services team.
For example, let’s say that the marketing department for Intel wants to build an AR marketing application for the conference coming up in November. Money isn’t an issue, they simply need it done quickly. The marketing team will then pay the in house developers and designers to build the app, using dollars from their budget. The in house team only needs to charge the marketing team its overhead costs (i.e developers salary + benefits).
Simply put, outsourcing is the redistribution of a job/s. Basically, an agreement made by a corporation to pay a third party software vendor to do the work related to the technology/application rather than doing it in-house. Software development outsourcing is extremely common. Outsourced services have grown immensely within the last decade. As of 2020, there are 53 million freelance workers in the US. Within a large corporation outsourcing traditionally takes place through a procurement department. For example, that same marketing department at Intel (you, know the one needing that AR app?) would go to procurement and say “Hey, I need a design and development team to build this augmented-reality application for the conference we’re going to in November”. Procurement would ask the marketing department to provide the project requirements. Then, the procurement team, leveraging its unique expertise, would begin their search. Their goal is to get the best price and terms for the company. Once they are satisfied with the software development agency they’ve found, the team will hand that company back to the marketing department.
Outsourcing software development companies can be tricky but when done correctly can yield incredible results.
Offshoring is the act of hiring lower-cost resources in another economy (and different country). For example, offshoring in Saudi Arabia means hiring from Egypt. American’s often offshore to India. Every country has its own labor dynamic and there will always be lower-cost labor that people are trying to get access to.
Through it all, intelligently choosing a design and development company to partner with is vital to your project’s success. Truly, the best way to make a decision that fits your needs is to answer the ultimate question; how involved do you want to be in the process?
Written by Cort Buchholz