In-House or Outsource, or Why It’s Not Really a Question

Have you ever considered the possibilities that the web provides? It’s a vast knowledge base and an incredible platform for learning and finding information, but the internet’s primary value, in my opinion, is communication. In essence, the web allows you to communicate with everyone who has an internet connection at home. This brings up plenty of possibilities for businesses, such as obtaining clients, partners, sponsors, or… team members. 

Yes, we will explore outsourcing, which is a hot topic these days. But listen, it’s human nature to do so. “The fish is going for where it is deeper, and the man is looking for where it is better,” according to one saying.

In the pre-Internet age, companies started forming affiliates or relocating production to lower-cost countries. Keep in mind the “Made in China” tag. Back in the 20th century, any major equipment manufacturer, such as Apple, Samsung, Sony, BMW, Mercedes, or Fender, opened factories in countries where it was cheaper and more profitable to produce their products, thereby creating jobs and making their products more accessible to the general public. public. Isn’t it a win-win situation? It’s frightening to think how much the iPhone would cost if it were made in American factories. As a result, the central office may focus on developing new devices and features.

In the world of software development, things are not much different. Outsourcing allows you to hire the best specialists while saving money. It also has its drawbacks. Let’s look at this phenomenon under the microscope, as well as how we approach outsourcing at GreenM, and why we consider Team Extension to be the most effective version of it. 

Reason number 1: Hire the best 

Territorial restrictions also create limitations in expertise, which is especially felt in niche industries such as analytics and data engineering Let’s simulate the situation. 

Let’s say your project has received large funding from partners and the number of users has grown tenfold in a matter of weeks. You are faced with a lack of expertise in data engineering and data analytics, and you need to close this gap the sooner the better. Let’s say you decide to hire people in-house. What is the probability that top-notch data experts live right next to you, and, moreover, are not involved in other projects? You don’t have to be a math guru to realize that the odds are pretty low. Circumstances such as dire need, haste, and pressure from users and investors can push you into a series of bad decisions, namely hiring mid-level specialists and below, down to those who “somewhere heard a glimpse of the Data in high school.” How effectively and quickly these specialists will be able to plunge into the project and solve burning problems is an open question. 

And now, let’s look into a parallel universe where you resorted to outsourcing. Turning to an outsourcing company, you immediately get the expertise you need. If we talk about the Team Extension approach, which we love in GreenM, in a short period you get a team of experts who work effectively in conjunction with each other, for instance, a software engineer, a data engineer, and a QA engineer. The provider company will carry out the procedure for finding these talents for you, which also saves you time and money. Also, this is far more (and here we go to reason number 2)…

Reason number 2: It’s cost-effective! 

Let’s go back to the first scenario. Suppose you live in the USA and hire American data engineers on staff. How much money do you think a middle-level developer will ask for? Probably two or even three times more than a senior expert from Ukraine.

Pricing in different countries is different, so the services of specialists can vary greatly. These are the realities of the market: for the same amount, you can get either a team of top-class experts, or two so-so employees simply because they are from different countries where housing prices, food, taxes, and so on differ. The choice is yours.

Recruiting Costs

In addition, you should not forget about spending on recruiting. For example, GreenM has an entire human resource and talent acquisition departments with vast experience in high-quality recruiting. They know well what a senior expert is like and can understand the level of knowledge of a person from one conversation. On top of this, new hires also face technical interviews with senior or leading GreenM experts and professionals, which in turn ensures that only the best of the best are hired. Having such a well-oiled hiring system and people who know a particular niche well saves you a lot of time and money, because everything has already been built for you. 

Retainer Costs, Sick Leaves, and Vacation 

When we talk about financial savings, we cannot fail to mention the funds for the maintenance of the team. If you’re hiring a person for the office, as in the first scenario, you need to constantly maintain the workload for them to justify their monthly salary. Plus, the entire internal corporate culture falls on your shoulders: team building, company events, paid sick leave and vacations, lunches, purchase of equipment, water, coffee, and cookies for the office. If we are talking about outsourcing, you pay only for the amount of work performed.

The provider company takes care of these issues and creates favorable conditions for its employees. For example, GreenM has the practice of unlimited sick days (within reason, of course). This means that a person can get sick not 20 days a year, but as much as it really turns out, the company will pay for this time. Such pleasant bonuses allow you to avoid a large turnover of staff – people simply like to work in good conditions. Therefore, we can guarantee you a consistently high level of expertise from our talents – people come to us for years and constantly grow and develop. By the way, we also pay for all kinds of advanced training courses. Another minus one problem for you to worry about. 

Team Extension

And a little about Team Extension. There are many different approaches to outsourcing, but we consider team extension to be the most effective. Approaches such as dedicated team or IT staff augmentation work very well in certain scenarios, such as developing a project from scratch or replacing an employee who has left. However, the development vector can often change, and tasks change with it, and it is the flexibility of Team Extension that allows you to most quickly and efficiently respond to such changes, while avoiding lock-in with a vendor. However, we discussed this approach in more detail in other articles:

Data Innovation Team Extension for Software Development Companies

Team Extension vs. Staff Augmentation vs. Dedicated Team: What’s the difference and how can you benefit from it?

Conclusion 

You may need a variable number of IT specialists with different qualifications to participate in your project at different phases of development. When you work with a good software outsourcing company, you get access to a big pool of professional developers on-demand. You know each outsourcing specialist’s hourly and man-day rates, and you may upscale or downscale your outsourced team based on the talents you require right now. 

Such flexibility is impossible to achieve with full-time personnel. Finding, interviewing, and adapting the appropriate personnel is a time-consuming and difficult task. Hiring a programmer in the United States takes roughly 35 days, according to Glassdoor’s recruiting data research, and the average hiring time for technical roles tends to climb.

During this time, the outsourcing IT team can construct a minimum viable product (MVP) for your application, allowing you to begin testing your concept with real users. It is commonly known that each day of delay increases the chance of your competitors overtaking you, especially in the IT industry. 

Let’s have a look at some of the primary benefits of outsourcing software development:

If you find this article useful, make sure to check out our blog – we have more materials about outsourcing, team extension, and everything IT-related!