IT Development: In-House Or Outsource?

Way Signs "Outsourcing - In-House Solutions"

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The question posed by this article is one that has plagued many business owners all over the world. How do you decide between hiring an in-house team for your IT development or should you look beyond the walls of your office and look for an outsource team to help you with the development of your IT section? There will be no perfect answer because at the end of the day it all boils down to personal preference.

 

However, the team here at ThunderQuote will strive to ensure that you get the answers that you need from this article. Handling a business is hard on it’s own, from the management to the bookkeeping and just making sure you make a decent profit. Hat’s off to all you entrepreneurs that are doing well now because we know that it’s not easy. However, even if you’re a small company of 5 to 10 people or a large firm, you will know that there will come a point in time where you decide to hire more people because the current workers can’t handle to workload anymore. The same applies to IT development. Therefore, when this time comes, do you know if you should in-house or outsource your company’s IT development?

First things first, we need to break down what exactly does outsourcing or choosing to use an in-house team means for your company.

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What does using an in-house team mean for the company?

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Here we list down the benefits of hiring in-house :

  • You already have a proper established relationship.
  • There is no need for introductions or a trial run before starting the job.
  • The skills developed for the projects can be used later on because the team stays in your company.
  • They have a bigger buy in into the company because they have a vested interest in the company. The company is their rice bowl and therefore they will work as hard as possible to make sure that their job isn’t compromised.
  • An in-house employee has greater familiarity with your company thus reducing the communication and feedback time because you can just walk over to the worker’s office to discuss what needs to be done on the spot.
  • You have greater cost control because if the job goes overtime or if the deadline gets pushed back, you still owe them the same amount of money – their monthly wages.
  • There is a sense of dedication to the team because he has invested time and effort while working in your company.

It does seem that hiring an in-house team brings a long list of benefits that will definitely make you happy. However, there are certain setbacks that might worry you because there are advantages and disadvantages everywhere. So let’s weigh them out.

What are the disadvantages of hiring an in-house team for your IT development?

  • It can cost a lot more to search and hire for the best team for your in-house IT development team and this might drag on and cost more money in the long run.
  • It might be more time consuming developing an IT system from scratch with a the team because they need to start from nothing since you would not have a prototype ready.
  • If you decide to sell the software or switch it over to something else, it might be a hassle since it’s so personalised and too tied-in into the identity of your present company.
  • Workers might slack off if they’ve worked there for a while and they think that they can get away with it.
  • It might take a longer time since the time constraints would not be as harsh as hiring a third-party to do it.

Well, since we’ve looked at the advantages and disadvantages of hiring an in-house team, let’s look at what it would take to outsource your IT development.

 

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What does outsourcing the company’s IT development mean for your business?

Here are the benefits of outsourcing the IT development :

  • Simpler process, this is because hiring a third party company will just mean that you look for them and sign a contractual agreement with them. There is no need to go look for a specialised worker, there is no need to pay for their insurance or have to train them to follow company policies. Just hire the studio, sign the papers and leave it to them to get the work done.
  • Cost is much lower. Well it is pretty obvious that labor costs overseas will be much cheaper because you can pick and choose who you would want to work with and most of the time it’s much cheaper. It is even better if you money’s worth more than the country that you’re outsourcing from. This means you get an even better bang for your buck.
  • No office distractions. This might seem a little odd but it does make sense. The office environment is an experience of its own. The office gossip, the lunch hours and all that hanging out might result in a downward spiral for productivity.
  • No need to invest in equipment. This is great because if you have an in-house team you would need to set up an office specifically for their needs and this can cost thousands. When you outsource, they should already have these equipments so your wallet stays safe!

What are the disadvantages of outsourcing your IT development?

  • Communication problems. This might be the most prominent disadvantage because if the worker does not stay in the safe office as you, it might be hard to ensure proper communication.
  • Quality control. Sure you can hire someone who has raving reviews on their work and all that. However, it might be a problem to always make sure that the quality is up to par since they are not going to be working in the same office space. Sometimes their portfolios are projects that have been done by their best designers, so how would you know if the person in charge of your project can deliver similar results?
  • Time differences. This might pose a serious problem to your logistics side because if you decide to hire someone halfway across the world, you might have to wake up at ungodly hours for a meeting. You can meet halfway but it does pose a slight hassle if you think about it.

If you really think about it, it’s not necessary for all your projects to be fully in-house developed or a hundred percent outsourced. You should pick and choose your projects to see which one needs more attention and you can then weigh your options. Personally the team here at ThunderQuote feels like it’s always easier to get a professional to come in and properly evaluate what you need to be done because they have the better experience, but at the end of the day it is all up to you and what your company needs.

 

ThunderQuote is the “Gebiz for businesses” and most comprehensive business services portal in Singapore, Australia and ASEAN , where hundreds of thousands of dollars of procurement contracts are sourced every month by major companies like Singapore Press Holdings, National Trade Union Congress and more.

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