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Hiring Developers vs Project-based Outsourcing: What is better?

Hiring Developers vs Project-based Outsourcing: What is better?

The ultimate aim of every business is to maximise their revenue while cutting down on costs and resources. Cost cutting can extend to hiring employees as well. This is why companies prefer to hire freelancers or outsource their projects. However, in some cases, companies prefer to hire in-house. Which is a better option? Hire or outsource? This is a question most companies face at some point or the other, but can you really give a one-word answer this this? Perhaps not, because there are a lot of factors involved in it.

Here are a couple of stories:

Versace Ceramics

  • The problem:
  • The large Italian tile retailer, Versace Ceramics had a successful e-commerce shop. But they wanted to make it even better by having a custom search feature integrated into their website. They had a team of developers in-house, but they lacked the technical know-how on how to handle the task. They didn’t know how to integrate the complex range of products released by the company with custom search so the visitors can see not only the products they searched for, but also product suggestions ( featured products on same categories) that would help in making a purchase.

  • The solution:
  • Versace Ceramics outsourced their job and got access to talented developers who supported them right from the start. They dug deeper into the problem, did the business analysis part and submitted a WordPress solution that addressed their business needs.

    General Electric

    General Electric or GE is a pioneer in several branches of business, including outsourcing. In fact, it was one of the first countries in the world to transfer its operational departments to countries that demand a low price for labour. They created a special GECIS (General Electric International Service) department while outsourcing their work to India.

    Eventually the company realised that they could bring more revenue to their company by evolving the GECIS from being a subsidiary company to a standalone unit. They decided to go by the following ratio – “70:70:70”, where 70% of the work will be outsourced, 70% of that is given to dedicated offshore centers, and 70% will be delivered to India.

    By looking at these examples, (both of them on project based outsourcing), it is evident that there are so many benefits to outsourcing work. Apart from the benefits of getting the work done well, you can expect these benefits too:

    1. Less investment

    When the project is outsourced, you can outsource it to a country where labour is cheap. You don’t have to worry about infrastructure cost, certificates, software cost, electricity and so on. The company you partner with, will handle all this, so you don’t have to pay for any of them,. It is their responsibility, and if they face any infrastructure challenges along the way, that will also be handled.

    2. More focus on company goals

    As you hand over the app idea to an experienced team, you can channel your energy into looking after the company goals. You can perhaps conjure up a great strategy that would make your app marketing highly successful and efficient.

    3. Bigger talent pool

    If you need really experienced people on the project you have in mind, and if your in-house team lacks the skill, you can most definitely rely on the outsourcing team. And the good news is that you can cast a wider net because there are no boundaries and no limitations anymore. You will have a huge talent pool at your disposal, and you can screen them according to their skills and talent, and make sure the right team is hired.

    4. Low-risk job

    As experts handle the task, you can be assured that the market will receive the end product well. This is because the product quality is high, being made by experts in the job. They will be more sensitive to market needs when compared to an in-house team.

    When can in-house development be a good option for you:

    • When you need the developer with you at all times
      • When you constantly need to update your apps and add features and functionality, then you can hire the developer rather getting someone from afar. This way, you can keep tabs on the quality of the product, and ensure the releases happen on time. Your customers are getting increasingly mobile, and when they make online purchase, you get a loyal customer for life – provided your site is user-friendly, free of bugs and responsive. Having an in-house development team ensures that everything goes according to plan.

        When you need a team that has a deeper understanding of business requirements
        It would be advisable to choose an in-house team when your team should be clearly aware of the market competition and business goals. Sometimes, nobody can understand your team better than a team that keeps close ties with it. This may not be possible for you if the work is outsourced.

        • When you need better resource management

        You can manage your resources in a better way when the team stays in-house. You will know the potential of each team member, so you can use their skills in a better way, tap their hidden talents and drive better outcomes. Similarly, you will be more aware of their limitations, so you can always outsource the areas they are weak at.

        Closing Thoughts

        By looking closely at the above mentioned arguments, you can reach a conclusion that both – getting an outsourced team and hiring in-house developers are good enough, depending on what you want, and what the project goals are. Perhaps, you will have to hire a specific expert team to complete a project, and at other times, you might need your in-house team and a few experts from outside, advising them on how to proceed.

        If you feel that you want to closely observe the product that’s been developed, then getting an in-house team would be a more feasible idea. With an outsourcing team, your level of freedom to watch the proceedings might be a bit limited.

        Interesting Articles:
        Check out this copmarison between Neashore & Outshore
        In-House VS Outsourced Software Development
        German language article “Softwareentwicklung in Indien: Ein paar Tipps”

        Pictures: Flickr.com/ Pedro Lozano/ Stefan van


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        The author: Reema Oamkumar is engaged as a thought leader at www.Software-Developer-India.com which is a part of the YUHIRO Group. YUHIRO is a German-Indian enterprise which provides programmers to IT companies, agencies and IT departments.

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