The in-house vs. outsourcing debate is nothing revolutionary new, especially in the ever-developing IT industry. Companies had been outsourcing processes or entire departments for decades now, but there are some solid reasons why outsourcing nowadays has become a more widespread business strategy than ever before.
In this article we are going to explore the subject of outsourcing from a variety of angles, and we will try to give short, understandable, and accurate answers to the most pressing questions about it - why has it become such a widespread practice; what are the benefits of web, mobile and app development outsourcing for the different industries; how to decide if there really is a need of outsourcing; what are the risks, and how to minimize them in time.
What does the term outsourcing really mean?
Outsourcing is practiced in many industries, and it means hiring an individual, a team, or a company from outside our corporation to take care of a specific part of a working process. This may include a wide variety of responsibilities, such as project management, marketing and advertising, web, mobile and software development. In this article, we are going to focus mainly on the later ones, and namely IT-related outsourcing practices.
How does web development outsourcing make business sense?
The digital era creates a new, pressing and inevitable need for every company out there - to be mobile, accessible, and user-friendly. Tailored software, developed for the specific needs of the company is neither something exotic nor something futuristic anymore - it is rather an absolute must for every business which aims to stay anywhere close to being competitive.
Put simply, this means that business owners and managers are obliged to make a decision - to either form and support their own IT department or seek a competent partner from outside the company. In-house development is often a complicated and expensive endeavor. It requires a budget for the physical structure, talent recruitment and training, as well as continuous financial support for the members. Outsourced development, on the other hand, also has its risks and pain points, but also some advantages which are hard to ignore. We are going to discuss all of them in detail later on.
Which are the industries which could benefit from web, mobile and app development outsourcing?
The answer to this question is short and straightforward - literally every industry could greatly benefit by reaching out to a trustworthy development partner. The process of digitalization is rapidly taking over all aspects of human existence, and service providers have no more time to waste.
Even brief research will show you which are the most successful companies for the last few years, and why exactly they happened to succeed in their niche. Manufacturing, healthcare, media, ISP and Telecom, the automobile industry and every other industry you could imagine are nowadays obliged to do better in terms of digital maturity. It's not always possible for a company to support a skilled and professional team of developers. And even if it is - it's not always the wisest and most practical thing to do. Let's talk a bit more about this particular decision.
How to decide between in-house and outsourcing?
Determining whether your business could benefit more from embracing the in-house or the outsourcing approach is an uneasy, but crucial task. The decision should be a result of a careful investigation of the company's business goals and assessment of financial, technological, and engineering capabilities.
Business owners and managers should precisely determine the role of web development and maintenance in their business strategy. Should a team of developers be available at any time, all-year-round? Will their work pay off and return the considerable investment? Does the company have the time and resources for meaningful recruitment and training? Usually, only very big companies answer positively to all three questions. If that's not the case, outsourcing may happen to be a wise thing to consider. We are now going to explain the benefits of this business decision.
What are the benefits of outsourcing?
Here are some of the obvious and not-so-obvious advantages of trusting your company's web & mobile development to third-party vendors:
- The affordable prices, compared to in-house development, are definitely a huge benefit for companies with different sizes and budgets. What's important to realize is that lower costs don't mean lower quality. Savings come mainly from the lack of additional team-supporting expenses, and not from the competent development itself. Many highly skilled developers will charge you less just because of the lower cost of living in their region, and that will have nothing to do with the quality of their work.
- The flexibility and project-oriented working arrangements keep companies from having a costly department, which doesn't always operate in its full capacity. Outsourcing the web, mobile and software development allows optimization in matters of time, financial resources, and efficiency.
- The additional skills and competences of external service providers are something very common, and there is a good reason why. The ever-increasing demand of third-party vendors logically leads to raging competition in the sector. Standing out and being noticed usually happens through providing lots of additional perks to companies and businesses. That's why you don't need to be surprised to find out that .NET developers can (quite successfully) be also good technical project managers.
- The advanced technical expertise of external developers usually spares the time and trouble of having to re-discover the hot water yourself. Being genuinely professionalized into their specific subject, be sure that they have managed tens of projects and have learned some lessons in the process. That kind of experience allows them to directly provide a smooth process, hand in hand with adequate decisions, and valuable knowledge for certain emerging technologies.
Keeping all of the above in mind, every business owner and manager would probably like to learn more about the different options for reaching out to external services. And yes, there are different outsourcing practices, which we are about to tell you more about.
What are the different kinds of outsourcing, and how do they work?
In case you're up to outsourcing the web, mobile and software development of your company, you need to know that there are different options for doing so in matters of working arrangements and partner location.
Working arrangements include:
- Remote teams, which are just what they sound like - temporary hired dedicated teams of professionals with different competences. The members of these teams could be freely chosen, hired for a specific amount of time, and managed by the company. This type of working arrangement guarantees the team members' availability and therefore provides an advanced feeling of security and what feels very much like the "conventional" in-house atmosphere, but online.
- Time & Material working arrangements, which are more flexible - the company can state their aims and requirements, and then pay the external service providers based on the time spent on the task. This model of a partnership may include different additional activities, offered by the third party, and is usually built upon the work-per-hour pricing principle.
Apart from working arrangements, there are also two different types of outsourcing models, based on the location of the partners. They are as following:
- Nearshore outsourcing has some significant advantages, which include a higher probability of a shared time zone, and therefore easier communication. It also minimizes the chance of significant cultural and language barriers, which could make the working process harder, slower, and even near impossible. Nearshore partners are usually able to react faster (or react at all) if there happens to be a pressing need for a personal meeting sometime in the working process.
- Offshore support may sound scary after all of the above, but it definitely has its advantages in different situations. For example, having an offshore partner can be very convenient for the performance of your web and mobile customers since updates, bugs and fixes can easily happen at night, instead of getting in the way during the working hours. On the other hand, initial software development doesn't require matching working schedules, and can easily be provided from any part of the planet.
What are the risks of outsourcing and how to minimize them?
Every business initiative holds certain risks, and software development outsourcing is not an exception. We are not even discussing the worst-case scenario where improper research might lead companies to inexperienced or unprofessional partners. To avoid such a catastrophe, always search for feedback, ask for examples of prior work and past projects, and be very clear about your expectations, your aims, your deadlines, and your budget.
Apart from that, even after you've found a trustworthy partner, keep in mind that you might encounter some difficulties or have to deal with facts that simply feel unusual to you, such as:
- Lack of absolute control over the process due to the different working places, the little or none face-to-face communication, and the lack of a conventional co-working atmosphere.
- Unclear goals and different misunderstandings can happen when you have to work with a complete stranger over the internet. To avoid that, always make sure to explain yourself in detail, and don't assume that the other party is obliged to know somehow the details which you're not speaking out. A good step towards an open and transparent partnership is the flawless documentation.
- Cultural differences and time zone-related inconveniences are also a commonly spread concern, regarding the smooth outsourcing processes. In reality, they don’t occur very often, especially if you choose to work with experienced European developers. If you want to avoid certain communication discomfort, discuss the ways to match your time zone working hours so that it could fit everybody's preferences.
In conclusion, outsourcing can be the wisest solution for the digital prosperity of your business or company, once they make sure to choose the right partner and maintain a long-term professional partnership with them.