While the idea of outsourcing isn’t new, you’ve heard the horror stories.
It seems like a great way to save money, but what about reliability? How easy will it be to find the developer(s) to whom you outsourced when you need maintenance, feature enhancements, and bug fixes?
With today’s tight budgets, it’s imperative to make the right decision because there often aren’t resources for a do-over.
Here are some caveats and possible solutions to consider.
Is the project short and discrete or long term and open-ended?
For short projects – or segments of larger projects – with a very clear and limited scope, outsourcing can be a fairly low-risk solution. You wouldn’t want to add a staff member for a short-term need and it’s easy to manage the resource and keep a small project on track.
For long term projects or ongoing concerns that are more open-ended in scope, it’s more important to choose carefully – do you want to tie up your in-house team on the project, ramp up payroll to add permanent people, or find an outsourcing company that is designed for long-term collaborations?
For long-term situations, checking references, using a team lead or project manager, and making sure you’re allowed the option to keep the same members on your team become much more important.
Long-term also affords the most agile development methodologies and cost-effective pricing. Retainer-based service fees are much more predictable versus project-based costs, which can easily escalate any time the design is changed.
Assembling your own team can be challenging.
If you don’t already have a team in-house – or one with available resources for your project, you also have to consider the cost of equipment, office space, continuing education, and other expenses in addition to the cost of talent.
With a long-term outsourcing service company, all of that overhead is already built into your fixed rate, plus you don’t have to spend the time, money and energy to bring in new staff – a cost which often proves to be incalculable. If you outsource with a service company you’re likely to get a flexible team that already has an established workflow and rapport with each other.
Make sure you have a realistic budget.
While outsourcing usually costs much less than ramping up your own team, equipment, and real estate, it’s important to remember that it’s difficult to estimate perfectly the cost of a development project. This is an issue whether staying in-house or outsourcing.
One way to avoid unpleasant surprises is to use an outsourced team that works on a fixed retainer basis rather than a project cost model, since you are purchasing a team’s time rather than a scope. The size of the team can be expanded or contracted as needs indicate over time.
Consider your future workload and business focus.
If you don’t anticipate a constant full-time workload for the next several years, building an in-house tech team won’t make good financial sense. If you’re doing in-house work, that should be your main profit center – rather than something you hope will continue to pay for itself once the project in question is off the ground.
With outsourcing, your service contractor shares many of the risks with you, and you’re able to focus on your core business – including the all-important marketing of your software product – without the distractions and pressures associated with managing and maintaining an in-house team.
Pulling it all together
In summary, once you have reviewed the timeline and scope of your project, evaluated the opportunity cost associated with assembling your own team to do the work, considered your budget carefully and looked at your future needs, you should be ready to either start researching outsourcing companies or ramping up your in-house staff.
For a software-centric company with ongoing development needs, working with a long-term retainer-based outsourcing team could be the right choice – since they will know your project well over time and be there to support it as you continue to add and improve features.
