When Does It Make Sense to Outsource My Project?
Once you’ve decided that custom software is the best solution to reach your business goals, it’s time to think strategy. Will your in-house team do the build? Or should you outsource it? If you choose to outsource, you’re not alone. Big companies including Google, Skype, MySql, Slack, Basecamp, and others have used outsourcing as part of their strategy to get the job done. Whether due to business growth, a side project, or too many projects in the queue, the results for these companies yielded success.
Outsourcing on the rise
Unfortunately for some small businesses, custom software may not be an option. But when the budget and time allows for it, many companies choose to outsource for lack of a skilled, in-house team. They may also lack access to the latest technological capabilities.
Whatever the reason, many companies are expected to turn to outsourcing this year. According to Yahoo Finance, “43 percent of U.S. brands outsource software development projects.” In fact, according to Gartner, outsourcing is expected to grow 8.4% in 2019 in the U.S. alone to $421 billion in enterprise software.
Do you really need help with your custom software project?
There are multiple factors to consider if you’re thinking about outsourcing your custom software project.
Projects you currently outsource.
If you feel you are not equipped or have the expertise to tackle a full-blown software development project, outsourcing may be right for you. For example, think about other areas of your business that you currently outsource to other companies (e.g. accounting, customer support, human resources, etc.). When and why did you decide to leave that work to someone else? What reasons brought you to that decision?
Your core business.
If your core business is not related to software development, you could get off track and derail your business objectives. Software development is time consuming and could affect progress on your current projects if done in house.
Purpose for your software.
Ask yourself what you are trying to achieve with the new custom software. Are there issues with your current software that are holding your revenue potential back? Is there a new product you are looking to develop? Or, is your goal to improve the operations of the business you’re currently running? If your in-house team does not have the expertise or capacity to execute a new overall strategy, consider outside help.
Your own business strengths.
Once you’ve determined why you are in business and what you are trying to achieve with your new custom software, think about your own strengths. For example, is software development something that you’re personally familiar with? How proficient are you at leading a software development team? Do you know the signals that could flag the project is headed in the wrong direction?
Putting a team in place.
If you don’t have a software development team in place, will you be able to handle the hiring? How many people will you need on your team? What roles will each team member handle? What skills, experience, and background will be needed for each role? Building an in-house software team is like building a new division inside your company. Do you really have the time? Is this what you are trying to achieve?
Weighing the costs and benefits
If you’re leaning towards an in-house development team, you may want to evaluate if it truly makes sense for your business. Here’s what you can expect:
- Cost considerations.
If you’re starting from scratch, hiring and assembling an effective, talented in-house software development team can be a very costly proposition. It begins with a long hiring process that will require finding the right mix of team members (developers, engineers, designers, etc.) each with the right skills. The salaries and benefits for these talented and skilled workers are not cheap and can vary by geographic area.
The more complicated the project, the more likely you will need specialists who would command a greater salary. Look at what other software development employees make at companies that are like yours in size and industry. Costs also increase if you are faced with a need for increased employee training and expanded office space.
- Time is money.
Your newly hired developers and engineers will need to assemble the rest of the team members. In addition, they will need to establish a strategy and the workflow of others in the group. Of course, this means that there could be a delay in the process until all members of the team are hired and ready to begin work on the project. And don’t forget, this is a regular monthly expense, whether they’re spending all their time on your project or doing other company-related tasks. Once the project is finished, the costs will likely continue as you will probably keep most of your team on for maintenance or other IT-related work.
- Project size and deadlines.
How big is your project and what size team will you need to get the job done? The size of your in-house team should be based on the scope, details, deadlines, and amount of work your project entails. The larger the project, the larger the team. If you’re deadlines are tight, you may need to hire more people on to get the job done.
- Continued team support.
Having such a skilled, talented team can be a huge asset to your business. The question is what plans you have for keeping them motivated and engaged in the long term. Will the project quickly scale your company and be able to support the team before and during development, and beyond? If not, how will you justify the costs of keeping them onboard?
Outsourcing your project, on the other hand, is an investment that is specific to the custom software build.
- Costs are directly related to project.
Every outsourcing dollar spent is tied to every effort and moment that is dedicated to your software development solution. These expenses are estimated up front and transparent. As a result, the return on investment (ROI) will be more easily estimated and projected.
- Start your project sooner.
When outsourced, your project can begin sooner as a dedicated team will be quickly assembled from individuals who know their way around software development projects. This outsourced team will be made up of talented professionals who will save time because of their experience working on custom builds. Many times, these teams of specialists have worked together and collaborated on other projects that require the same skill sets. They have a tried and true process in place that ensures successful outcomes sooner rather than later.
- Reduce error and increase value.
With an in-house team, there is a risk of error that could affect your other business processes. On the other hand, an outsourced team is guaranteed to produce the results you’re looking for. You won’t have to turn elsewhere when the project looks as though it’s going in the wrong direction. In addition, it’s important that an existing IT team stay focused on adding value to your current business. This will help keep your current processes running smoothly to help ensure productivity and efficiency.
- Stay safe and secure.
If your in-house team is not well-versed in security, you may be faced with security breaches that put your company’s sensitive information at risk. With outsourcing, you’ll be protected against breaches as coding and processes of development are secure.
- Stay focused.
But maybe the greatest benefit to outsourcing, is that you can stay devoted to your core business and not sidetrack any company priorities. Do what you do best to keep your business on track without being distracted with major diversions that are best accomplished by trained professionals.
Still on the fence?
Contact Bitbean to learn more about what our talented team can do for your project and business success.