Outsourcing was widely used before. Way before the pandemic started, companies gave subtasks or projects to personnel from all around the world and enjoyed fruitful results. Now we may say that it is at the peak of its popularity. Offices are closed or are closing so there is no really much sense in insourcing anyway. With everyone and everything going online, outsourcing becomes a more and more attractive option due to its costs and opportunities.
However, is IT outsourcing a really good option for your business? What benefits outsourcing has that insourcing has not? It is natural to ask yourself these questions. This article can help you to make a solid decision and provide you with detailed information about all the pros and cons of outsourcing. Take a thorough look at our list and find out whether it is worth it to start outsourcing software development.
Outsourcing has, in fact, numerous benefits that make this option more attractive than hiring an in-house team. Let’s dive deep into the outsource pros.
One of the main benefits of the outsource development process is that you have the whole world to choose from. When you are hiring an in-house developer, you are limited by the location. It may happen that you do not have highly qualified developers in your area or you need a person with very specific knowledge. What do you do then? Usually, companies have to choose the best from the worst. You can only imagine which quality software will be with such staff.
With the outsourced team, you are free to choose whoever you want and from everywhere you want. Borders are not a problem anymore and you do not have to be satisfied with an okay option. It is a known fact that developers from Eastern Europe and Latin America have been getting a much better skill set and wide knowledge lately. So some of them may be way more skillful than any insource developer you can find in the USA or Western Europe.
Hiring a full-time developer or a team of software developers is an extremely time-consuming process. You have to go through job postings, numerous interviews, onboarding, team buildings, and explanations of the project.
Outsource software development is way easier and faster. First of all, hiring an IT consulting company means that you will have your team ready in 48 hours or less. Such companies usually have a contact list of the best developers with whom they have already worked. Therefore, they just need to find those who will be a great fit for your project. Secondly, outsource developers are used to jumping between different projects so they are likely to grab the concept of your company and the problem that has to be solved very quickly. At last, they have a big experience in all types of projects so it is likely that they will know the solution right away. In-house developers may need more time to figure out what they have to do.
In terms of software development, companies consider outsourcing mainly because of the cost reduction. Developers from Eastern Europe and Latin America that we have already mentioned charge not as much when compared to the developers from developed countries. It depends on the lower salaries in such countries overall, not on the quality of their services. Secondly, since time and money spent on onboarding and HR are reduced to the minimum (consulting company takes care of that), the company can take advantage of reducing development costs.
Managing people is not as easy as it seems. You have to check how every other member works, whether KPIs and deadlines are on point, and if you are moving in the right direction. It is especially exhausting if your manager does not work with the development team only but with other departments as well. Then it is easy to lose track of everything that has to be controlled or changed.
Luckily, consulting companies do take care of that because they have their own project managers. There will be one person to curate your project and make sure that everything is fine. Moreover, this management and teams worked together for years and they know each other, they know how team members work and what they are good at. So you will not have to spend any effort on management and busy yourself with more important tasks.
Nothing is perfect so outsourcing has its cons as well. However, they are relative and can be fixed easily. So that you understand that better, let’s discuss every point separately.
Some people see it as wonderful that you can free your project management. However, there are those who want to keep everything under their control. It can be due to the lack of trust in employees or a simple desire to know everything. Anyway, such people do exist, and outsource will become a great problem if they are like that. You can not control every detail when you have weekly meetings online and that is all of the interaction with employees that you have.
However, if you hire IT consultant company that has a good reputation, there will be no need to be afraid of anything or lack trust. You can get daily reports about what is going on as well.
When it comes to outsourcing, there are quite a few hidden costs. For example, you have to pay for every minor change in the project which will not be an issue with insourcing. Consulting can cost you more in the end than you have expected. Moreover, there are costs of inappropriate sales and operations planning.
Usually, these problems are easily avoided thanks to a good scanning of companies during the negotiation process. But still, if you meet such red flags, it is better to change your development partner.
There are companies that have sensitive information that has to be protected at all costs (fintech, for instance). Therefore, you do not want to give your data to unknown and unreachable people. Still, companies with a good reputation are still your best friends.
Outsourcing is a truly beneficial way of software development. You can hire talents worldwide, lower costs, free management, and finish the project in a short period of time.
Outsourcing has its cons as well, you can not hide them. Hidden costs, lost control, and security risks are disturbing for many. Yet, as long as you have a trusted IT consulting company, there is nothing to worry about.