Building Your Development Team vs. Outsourcing

Nemanja Manojlovic By Nemanja Manojlovic, 20th Mar 2018 | Follow this author | RSS Feed | Short URL http://nut.bz/2_vhbfcc/
Posted in Wikinut>Business>IT & Ecommerce

This is not an easy decision to make, as both options come with different risks and require a lot of expertise to determine the correct course of action.

Intro

As your company grows, there will come a time when you will have to decide whether or not your next step in terms of development will require you to build your own in-house team or outsource. This is not an easy decision to make, as both options come with different risks and require a lot of expertise to determine the correct course of action. There is no ‘one size fits all’ answer on deciding how to approach it for your organisation; each situation is unique.

The First Steps

To determine the right direction for you, it is absolutely essential to identify the exact IT skills you require. This is true for whatever development you are building. People and their skills define a business, but they are not the only factor in its success.

The different internal and external factors you are operating in will also determine what is best for you. Undertaking an analysis of your environment will give you a clearer picture of how to proceed. SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) is an excellent way to identify those impacts.

You may find that you have been forced into this development for cyber security reasons or a competitor is attempting to bring a similar idea to the market, then you may consider the speed of your development as an overriding factor.

Once you have established your requirements, it is important to review them against your business plan.

Building Your Team

Building an in-house team is a big task, you are employing extra personnel within your organisation and undertaking all of the additional responsibilities that the process brings. Employing can be quite daunting for someone who has never done it before, but it is an essential step in business growth. There is plenty of help and guidance out there on this subject and it should not be a hindrance.

By employing people within your organization, you are in control of the skill levels – you will be able to set the standard of the technical ability of your developers and ensure that only those that meet it will work on your projects. With innovative and exclusive employment contracts with your in-house staff, you can protect your technology, as well as provide comfort to your staff by showing that you value their qualities.

Pros
There are many benefits to having an in-house team, as well as having the reassurance of staff contracts. You will have total control over their time allocation. Should urgent issues arise with your project, you will be able to focus all of their efforts on resolving the situation, they can react instantaneously, already understanding the business needs and processes.

When you value your employees’ expertise and show faith in them, they will perform to the highest standards and give you their time and effort. You are able to control the costs of the project with in-house teams, and salaries remain relatively constant.

Cons
Clearly, these skill sets aren’t cheap and you will have to remunerate at the market rate, which can be a financial burden on any business. You will be competing with other IT companies for the best people, so retaining specialised staff may be a problem if you can’t pay the highest wages.

Further fiscal expenditures will be required to provide your staff with the necessary hardware, software and tools for the job.

You will have to manage soft issues with your own team, which can be challenging, even for the most resolute business leader. From sickness, to bullying and managing leave, it requires additional ongoing efforts on your part.

Outsourcing

For anyone who doesn’t want the responsibility of managing people directly, then clearly outsourcing is the direction they should consider. Outsourcing is simply contracting out the project to a different company or freelancer to complete. You are able to specify the contract duration, required skill sets and when you require the services.

Outsourcing best practices vary from niche to niche. Blockchain based businesses are very popular lately but not all businesses have a full in-house development team and they have their own priorities based on which they hire outside help. Nevertheless some general things apply to all niches.

Pros
When outsourcing, you can bring in the required expertise as and when you need them. They will focus only on the task they are paid for and not be dragged off onto other tasks. Outsourcers can also be tasked to supply the necessary hardware, software and tools to complete the project, thus saving you capital.

Cons
Obviously, outsourcing is not cheap. The first quarter of 2018 has already seen a 12% increase in IT contractor rates in central London. A well-qualified and experienced developer can demand more than £650 per day. While these contractors can charge a lot of money, it can be difficult to find someone you trust with your project, who fits your budget and who is actually available when you need them.

Hybrid Solutions

You may have found that you will require a part of your development team all of the time, whereas others may only need to dip in and out on the various project stages. With this scenario a hybrid solution may afford you the most cost-effective and efficient approach. A hybrid solution employs those that you need almost all of the time as full-time employees and you outsource to certain specialists as and when required.

Pros
You could save a lot of finances, you are paying less staff across the year but are able to buy in IT expertise across different disciplines as required. With the in-house staff working on your projects, you will always have staff members who understand the project and who are available when needed.

Cons
While you may save some money by not employing staff all year round, depending on your skill requirements, you may still find that you have periods when you are paying a lot of money for outsourced work.

With that outsourced work in a hybrid environment, you may find estrangement on both sides of the team – a lone contractor may feel that he doesn’t belong like a full-time staff member. Conversely, a permanent member of staff may feel alienated when work is outsourced in an area that they consider themselves sufficinently skilled at.

Conclusion

Deciding on which course of action to take is not easy, but with careful planning and advice from experts, you will determine what is best for you.

Tags

Business Management, Development, Hiring, Outsourcing

Meet the author

author avatar Nemanja Manojlovic
I am an enthusiastic researcher from Podroom Creative who likes to focus his attention on topics ranging from martial arts, weight loss, fitness and cooking, to motivation and productivity.

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