In-House vs Outsourcing: development In-House vs Outsourcing: development

Finding a good developer can be a tall order, especially when you’re still working on building your company and don’t have much to offer a potential candidate. In turn, the candidate has a lot to risk when switching to your Startup.

Keep in mind that most developers are risk-averse and pragmatic thinkers—as a result, many companies find it challenging to recruit programmers with an appropriate skill set.

One solution to this problem is using remote developers (outsourcing).

 The merits of outsourcing include:

  • fast resource acquisition
  • high level of project continuity regardless of holidays, sick leaves and unexpected events
  • lower costs of labor
  • easy settling and budgeting
  • no fixed costs and improved business flexibility

Some prime examples of enterprises that rely on outsourcing is Odesk (three fourths of the staff, more than 150 employees) and eCommerce Fab.com (most of the development team, nearly 130 employees).

Silicon Valley Startups that hire only local developers risk getting themselves into a cost spiral. Think of a fisherman who chooses waters popular with other anglers rather than picking a lake full of fish. It’s not surprising then that they can’t catch a trophy fish there. Outsourcing is a solution that can help entrepreneurs hire the best talent as it gives them the opportunity to widen the search area. Let’s say this again: developers do not like risk. They usually prefer to stay in their hometowns, and only a handful will consider relocating abroad.

 But that’s just a part of the picture. Outsourced work has some disadvantages as well:

  • communication difficulties
  • quality risk
  • no building up of knowledge at the client company

We work with many clients and references and testimonials are a priority. So far, we’ve been doing a good job: Divante ranks among the highest-rated companies in Clutch. This is why we don’t always recommend clients to choose Divante and only suggest it for some specific projects.

When should you outsource development?

  • You use a standard technology like Magento, Demandware, hybris, OroCRM, Angular, Cloudera and others: you will be able to move development back whenever you want.
  • You have IT experience or you team up with an IT company, so knowledge is build up also locally.
  • You have limited funds and are time-strapped to offer a fix: these are often emergency projects.
  • You need to expand your IT fast and want to create a scalable structure that will accommodate the constant arrival of new developers.
  • You have to create a new solution prototype.

Things to consider when outsourcing:

  • The outsourced resources are part of your team.
  • Learn the basics of SCRUM. You’re the product owner.
  • Spend at least 15 minutes daily to communicate with your team and collaborate.
  • Choose companies rather than freelancers. A company gives you stability, a SLA and quality standards that will prevent you from going up a blind alley.
  • Be cautious when hiring new team members and give the recruitment process all your attention.

Last but not least—if you pay peanuts, you get monkeys. Don’t settle for the cheapest option. If an hour of in-house labor costs $100 and your outsourced offers are respectively $50 and $35, the former company probably has a competitive edge to justify the price. It’s best you understood pricing factors before you choose the lowest bid. Regardless of the company you choose, at 50 or 35 you still save a lot—just be sure the quality you will receive is equivalent to what you would get by paying $100 locally.

If you’re interested in how Divante carries out their work, check out ‘How We Work’ Infographic! 

Source: divante.co/blog

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