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  • Olga Veremenko

Touchstone In-House Development vs. Outsourcing: What Is the Difference?


You’re doing your best to succeed as an IT company and now have come across one of the most challenging issues for any business owner: should you outsource or grow your internal team? What’s the real difference between outsourcing and having your own development right within your company?


Let’s see pros and cons between these two essential approaches to business.


1. Technological Capability

If you have your own development team and want it to stay its way, you’ll be able to rely on the developers you handpicked for your company. Each of them will play a significant role in your company’s success.

Sounds great? Sure, it’s amazing to have your own software engineering department. However, it also means that you:

  • Won’t be able to introduce new technologies swiftly because you’ll need more developers with a new set of frameworks.

  • Finding and retaining software engineers is incredibly challenging – and expensive.

  • You’ll need to train newcomers and have senior specialists help them integrate into your project.

With outsourcing, things are different. You can ask the vendor to provide you with developers who know the framework your team doesn’t use. Besides, you don’t have to hire several people at once. If you need an expert opinion on any issue, outsourcing allows you to consult a specialized professional.


And the most important thing here is that you can start development right away with outsourcing. By doing so, you’ll be able to outpace your competitors and get an amazing final product to the market.


2. Training Expenses

As we said above, hiring and training new software engineers is expensive. Even if your new hires are experienced specialists in the niche, there’s always a chance they will eventually stumble upon a learning curve. To avoid this situation, you need to develop your own training program.

If you opt for outsourcing, your company won’t have to cover organizational and training costs. It will be your vendor’s responsibility.


3. Recruiting Speed

The war for talent makes the biggest companies in the world fight over software engineers, and this competition is brutal. Standing against companies with deep pockets can be challenging, especially if you’re a startup. What’s more, internal recruitment processes and onboarding take months.

Outsourcing companies, on the contrary, quickly provide you with ready-to-go teams that will have a positive impact on your project. If you need custom hiring, the vendor can land the right candidate or a whole team of specialists in two to six weeks.


4. Flexibility

An internal team of developers is typically a settled unit that can’t be adjusted on cue. You can’t dismiss your teammates or call for new hires at times of seasonal or cyclical demand.

At the same time, outsourcing allows you to fine-tune the service consumption to the business needs and support your organization through the foreseeable growth stages. It’s easier to adapt to changes in internal operations and advancements. Besides, you convert fixed labor costs into variable costs, meaning you only pay for the services you require.


5. Workload

Workload is another deciding factor in the in-house vs outsourcing debate. As a business owner, you may notice that workload within your company fluctuates. For instance, you may need an expert in a very narrow field, but you only require them to work on one project. Does it make sense to hire them full-time? Not really.

An outsourcing agency, on the other hand, can help you source both full-time and part-time workers to help with mountains of work or assist with particular tasks. Thus, you meet the needs of the current project without the financial commitments of having new full-time hires. Also, you can build up or down your team whenever your company needs that.


6. Communication

When keeping development in-house, shared office space and working houtse contribute to a comfortable and clear communication process. Direct conversations also help avoid misunderstanding and reduce the turnaround time.

However, you can keep a transparent relationship with your outsourced team too thanks to communication tools like Slack. You can also articulate your business and technical objectives or provide feedback by making the project manager a point of contact. Vendors usually offer both communication options.


7. Communication Language

In-house software development suggests that both you and your team speak the same language and share the same mentality. Surely, it can create a more friendly working environment, but it actually doesn’t guarantee the success of your project.

Outsourced teams that are located in another country won’t have English as their native language. To avoid verbal misunderstanding, make sure to choose the vendor that has English proficiency tests in place.


8. Corporate culture

Strong organizational culture defines your company’s brand. It has a positive impact on employees and creates an atmosphere of positivity that is hard to ignore.

However, if your primary goal is to build a digital product, an outsourced team with its own culture might add a nice diversity. You’ll be able to set up a knowledge-sharing culture and integrate the best processes you’ve noticed into your own company.


9. Cost Efficiency

Outsourcing turns out to be more cost-effective than building and maintaining an in-house development team. When delegating technical tasks, you won’t have to worry about paying salaries and training new staff.

Besides, if you opt for an outsourcing vendor in another company, you’ll see that it’s a more cost-effective strategy.


The Bottom Line

Choosing between in-house vs outsourcing is a hard pick, since both solutions have their strong points. When in-house development is well-known for face-to-face communication, shared culture, and complete control, outsourced development offers unrivaled cost reduction and access to global tech talent. To make a decision, you should carefully think about what your business truly needs.

 

CLARITY is a market-leading SAP partner that has proven the highest quality of delivery working with the customers. We are happy to help your company with SAP support, business analysis, development and testing of your existing SAP solution as well as to increase the capacity of your project team.

CLARITY can support your project team with our certified specialists:

- SAP Developers

- Quality Assurance Specialist

- Functional Consultants

- Enterprise & Solution Architect

- Project Manager

- Product Owner

- SCRUM Master

Learn more about our services: https://www.clarity.cx/services

Book a call: https://www.clarity.cx/book-a-meeting

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