In any business, a team is one of the most important criteria for success. It is the team that creates a product or service that will help the business to open new horizons. At the same time, hiring and managing a team is a pain for many entrepreneurs, especially in the field of software development, where the market is crowded, and the search for qualified specialists turns into a real quest for both small startups and large organizations. In this article, we will talk about the pros and cons of various options for interacting with the development team, depending on your goals.
Outsourcing is the transfer by a client company of certain tasks and functions to a contractor company competent in this field. This is a great alternative to creating an internal department or transferring a number of tasks to employees who already work in the organization. If you choose outsourcing for the development of a mobile application, then the contractor will do everything: from planning the future product to its full development, promotion to the market and subsequent maintenance.
The main difference between an in-house and an outsourced team is location. Although technically you can "outsource" development to an office near you, this usually doesn't happen. As a rule, companies hire non-resident or foreign developers who have lower prices than the company across the street. But when comparing internal and remote employment, it is necessary to take into account much more factors than the location and cost of work, so let's study each of the options in more detail.
Recently, there has been a tendency among large companies to hire their own developers and other specialists. For example, instead of hiring a third-party marketing agency, companies prefer to develop their own marketing department. This allows them to get more participation from specialists and avoid various communication problems.
By creating your own development team, you get specialists who will be fully involved in your product, and you will have the opportunity to share with them not only the needs, but also the values of the company and the product.
Another advantage of our own team is the ease of communication. If the developers are in your office, you can easily interact with them. You will not need to choose a time convenient for everyone and arrange a video conference, communication with your own team is easier, more comfortable and requires less organization.
However, in order to keep developers in your company, you will need to take care of a lot of things, starting with the organization of their workplace and ending with salary, benefits and bonuses. You have to do everything possible to keep the team.
Summing up, we can highlight the main pros and cons of our own team.
- There are no problems with communication.
- The risk of data leakage is reduced to zero.
- Our own team knows all the subtleties of the product and is fully involved in the process.
- You need to search, hire and manage employees.
- You are responsible for maintaining the team.
- It may be difficult for you to balance the development and training of new developers hired by the staff.
As you can see, creating your own team has the same number of pros and cons, so the final choice in this case depends on the needs and capabilities of a particular business.
Often companies prefer an outsourced development team to save money. For example, in your city, the development of mobile applications is expensive and outsourcing is the only available option that fits within the budget. At the same time, outsourcing gives access to a large number of qualified specialists, you are not limited in choice, because you can hire developers with a set of unique skills from anywhere in the world.
Outsourcing is especially relevant for companies whose activities are carried out offline, these are rental companies, offline retailers, transport services and delivery services that focus on logistics and use mobile applications and websites to accept orders and improve the quality of customer service.
Often such companies do not have sufficient technical experience to evaluate developers at the hiring stage and then train them. Outsourcing software development companies manage all the hiring and management processes themselves, which can save you a lot of time and nerves.
Outsourcing developers can also offer more approaches and solutions, because they have already faced similar problems when developing products for related fields and using different technologies.
Another advantage of outsourcing developers is the diversity of their knowledge. Usually outsourcing companies offer a variety of technologies, from web development in various languages to mobile development, even native, even cross-platform. This gives more opportunities for your product, because you can always change the technology, add new features and chips.
The outsourcing team also has disadvantages. The outsourcing team may be slower to respond to urgent business needs, for example, due to time differences. They are not as much involved in the product as the team working in the company's staff. Difficulties may arise due to the difference in mentalities if you work with foreign specialists.
Let's summarize and highlight the pros and cons of outsourcing.
- Various technologies and a wealth of experience in various fields and projects will be at you disposal.
- Quick start of work, since companies offering outsourcing services have significant human resources, their specialists can immediately get to work.
- In most cases, you can get a great product at a lower price.
- There is no need to deal with hiring and management issues, this is the responsibility of the contractor company.
- There may be problems with communication due to a different time zone, different mentalities.
- The outsourcing team is less interested in developing your business.
In some cases, partial outsourcing of development is an excellent solution. Let's see when an in-house team and an outsourced team can do the work together and provide a great result.
When should I think about outsourcing?
If you already have your own team, you may still need to outsource some development or maintenance processes. Here are the most common situations where this can happen.
- Your team does not have any special technical knowledge.
Technical experience means knowledge of certain programming languages, architectures, or integration with third-party services, such as payment systems, CRM and chatbots, which can be written in a completely different language than your product.
If there is no developer on staff with the specific knowledge needed for the project, outsourcing companies will help you find them quickly and start development almost immediately. To do this, your internal developers will simply need to provide an open API and a technical specification so that a third-party developer can work on individual tasks in the project.
By taking care of integrating a new development participant into an existing team, you can quickly get the desired feature in your product.
- Your highest priority is time to market
If you need to launch your product as quickly as possible, but your own team does not meet the deadlines due to the amount of work, you can hire a third-party developer. Since outsourcing development companies have a lot of employees, you can scale your team as soon as the need arises.
This saves a significant amount of time, since the process of hiring an internal team can take a long time. Moreover, to hire a new employee to a full-time team, you will need the resources of the HR department, as well as your own developers, to evaluate candidates and make sure that they are suitable for the company. Outsourcing almost completely solves these tasks without your participation.
When time to market is of great importance, outsourcing is one of the best options: you get a new team member almost instantly. As a rule, a new developer takes part in daily meetings and waits for full integration into the development process. It is a common practice for an outsourced developer to use a software tool to manage your company's projects.
Of course, you will still have to involve your own developers to evaluate third-party employees, but it will be much faster than finding candidates and interviewing them on the spot. It is also important to remember that a remote employee, like a full-time employee, needs time to study the project and get used to it.
- You need to develop a product for a new platform
In this case, we are talking about outsourcing a more complex project. For example, many companies have their own web developers who are responsible for the backend and website. However, they do not have mobile developers, in which case the development of a mobile product is outsourced.
This is a common practice for companies, since hiring a completely new team of mobile application developers can be quite expensive both in terms of time and money. Outsourcing companies already have experts who can advise on various technical solutions, for example, for which platform it is worth developing a product, making a native or cross-platform application.
If you are planning to hire your own team after all, it is convenient to start with third-party developers so that they can start working on the architecture of the project, and then help evaluate the developers you will hire yourself.
- Your own team is too expensive for secondary tasks
It's not practical to pay a full-time developer for simple tasks like application maintenance and support while the product is evolving and you need developers to focus on new features. It is in this case that an outsourced developer can help you.
Often outsourced developers are cheaper than full-time specialists, which makes delegating part of the tasks to them (maintenance, support and implementation of secondary functions) cost-effective. In addition to saving money, you will receive high-quality maintenance, which will take place in parallel with the main development process.
- The local market is overheated
When the hiring market overheats, prices rise, and the competition for talent grows strongly among companies. Today, this is happening in many countries with software developers. Since this is a lucrative profession, many people appear on the development market every year, but their experience is minimal and companies compete for more experienced specialists.
This leads to high costs and requirements, as well as problems with hiring: most experienced developers have already been hired, and companies offer them excellent conditions so that they are not lured away by competitors. The lack of talent is one of the urgent problems in many countries. IT specialists occupy the second place in the ranking of professions experiencing a shortage of talent around the world.
If you are acutely aware of a lack of talent, outsourcing can be an effective way to attract professional, qualified developers to work on your product. Although it's easier than competing with other companies for talented developers, outsourcing is not without its problems.
What are the risks of outsourcing?
Although combining your own and outsourced teams to develop one project is convenient in many ways, there are certain risks that may force you to continue searching for staff and postpone the project until you complete the team. Let's discuss possible risks and ways to work around them.
- A different mentality can make communication difficult
If you outsource development to a company from another country, most likely, developers will look at many things differently than you. Some countries are characterized by extreme punctuality, while others are measured and unhurried; in some cultures they talk about everything directly, in others it is considered rude.
There is only one way to find out if the selected remote team is suitable for you: conduct an interview and evaluate not only hard skills, but also soft skills of developers and managers.
- Technical skills can be difficult to assess
This is true for outsourcing in general, but if you have your own development team, it will be easier for you to evaluate the skills of the contractor.
To make sure that you are going to hire a professional developer who will create high-quality and understandable code for your product, you need to do two things:
- conduct a technical interview, involving your own developers in it;
- hire a third-party developer to work on a small project and evaluate the results.
- Intellectual property is transferred to third parties
When you outsource the development and support of an application, you need to provide access to your current project so that a third-party company or one developer can work with it. Some companies don't want to share code, business processes, and even ideas with third parties, so they prefer to hire their own developers.
If you feel the need to expand the team at the expense of third-party developers, be sure to sign a non-disclosure agreement (NDA). This document includes penalties for violation of the contract and the client's intellectual property rights. All the code created by the outsourcing company belongs to the client, so the company cannot legally use your code or ideas to make its own profit.
- Remote employees may not have enough engagement
Lack of involvement is another risk that turns an outsourcing company into a pure code producer who is not interested in the fate of the product as such. In some cases, this is enough. But if you have never started an online business before or are not familiar with a particular platform, you may need not only technical advice, but also business advice to ensure that the software fully meets your business goals. In this case, your own developers can provide more information.
How to choose a reliable outsourcing company
Choosing the right outsourcing partner for a project is 60% success. Since outsourcing a project means remote work, you need to make sure that your partners are real, professional and honest. In this situation, it helps to compile a list of all outsourcing companies that specialize in developing mobile applications that meet your needs. You can make a list of contractor companies using search engines, asking for recommendations from business partners, or examining lists of software developers.
After compiling the list, send a request-offer to the selected companies. This will help you understand whether the company meets your needs and financial capabilities. We also recommend evaluating the quality of communication to know what to expect in the future.
Be sure to pay attention to the following points in order to make the right decision.
Quality of work and experience
You can determine the quality of a developer's work by reviewing his portfolio, studying reviews from other clients, and arranging a technical interview with a software development specialist you trust.
Cost and efficiency
Many companies choose outsourcing in order to save money and direct it to marketing and other activities. However, choosing the company with the lowest rates is not always the way to success. A lower hourly wage does not always mean lower costs: a team working for $20 an hour can spend 100 hours on your project, while another team with a rate of $40 will do the same in 30 hours. Therefore, it is important not only to compare the cost of an hour of work, but also the time that the company expects to spend on development.
Agreement and terms of cooperation
Ask for a sample contract and make sure that there are points concerning:
- intellectual property rights;
- protection of confidential information;
- regular progress reports;
- provisions on termination of work and termination of the contract.
Before the start of communication, the outsourcing company should also offer you to sign a non-disclosure agreement so that you can be sure that your business idea is safe.
In the process of such selection, some of the companies will be eliminated and you will need to choose the right one from those who have good reviews, a thoughtful contract that protects your interests, and will be able to create a mobile application on the right conditions in a timely manner.
It is impossible to unequivocally answer the question of the need to hire an outsourcing company. But if you feel that you don't have the time, capacity, or need to hire your own development team, outsourcing is an ideal option.
Many companies are hesitant to outsource projects, fearing disclosure of their intellectual property or facing communication problems related to remote work. However, outsourcing is still one of the most effective ways to expand your own team and accelerate work on a project.
Moreover, good outsourcing companies are well aware of all the risks. Therefore, they are ready to meet with their clients, sign an NDA with penalties and make sure that the client's expectations are met. To successfully outsource software development, you need to choose the right vendor. When looking for outsourced developers, consider not only the hourly rate, but also their efficiency and communication skills.
If you need to expand your team or quickly launch your product to the market, the Anchante experts are ready to help you with these tasks.