Moving from In-house Software Development to Outsourcing

When the company decides to extend their development they can either enlarge the current in-house office or  externalize some parts of their development to the outsourcing company.

In-house development is well-known standard course of events when you hire employees who will work in your office, buy equipment for them, meet all these people to discuss questions face to face everyday in comfortable time. The other way is outsourcing, were in fact you rule people who are thousand miles away from your workplace.

Usually people can understand risks that can arise when they extend a team in-house. However, moving all or part of the business to another country seems like a big challenge. Among the advantages of outsourcing there can be:

• Cost saving: you reduce costs for renting office premises and buying equipment and licenses as usually a outsourcing company, or vendor, takes care of all these things.

• Global pool of specialists: a vendor will find the specialists or the whole teams that have the skills necessary for you projects.

• Sharing risks with vendor: usually vendor can help you to mitigate the risks which is a big deal that often oversight by companies.

• Opportunity to focus on core business: delegating a part of your development needs to the outsourced team you can focus on more important direction of your business.

At the same time, there are some difficulties about outsourcing which customer should be prepared to and know how to overcome them.

For example, because of cultural, language and time difference aspects people who work on your project offshore cannot fully dive into the atmosphere of your industry and some business goals may be not so clear for them as for the in-house staff. You may easy solve this problem if you dedicate some more time to your new people at the beginning of the project. Regular skype meetings and chats, availability for questions, arranging trainings and assigning some people from your in-house team to coordinate the work of the offshore team will help the outsourced team to involve into the process faster. Do not neglect people’s questions and requests for help – they just try to understand your goals and ideas better to make their work the right way.

One more thing that companies often are afraid of is uncertainty about information confidentiality. In fact, this is very tricky question as you cannot be 100% sure about anyone and the geographical location does not mean less reliability and compliance. Vendor obliges its employees to sign non-disclosure agreements that are only the one way to prevent information leakage. You can ask employees to sign the same agreement with your company.

The distant location fears companies as their managers think that they will not be able to control the employees the same way as they used to do with in-house workers. In fact, outsourced employees are even more diligent and disciplined. They have the managers in the vendor’s company who coordinate their work. It would be good if you could go to the outsourced team’s office to meet with people who work for you, set personal contact, tell about the company and perspectives from the first person, and try to understand what approach of communication will fit this team. Seeing you personally will also calm the employees as they will understand that you are a real person, not just a mythic customer.

There are thousands of positive examples as for the moving from in-house to outsourcing. Of course, there are also negative experiences, but risks always accompany any business, so everything is in your hands. Both in-house and outsourcing kinds of work have their advantages and disadvantages, however, it is up to you to create a strategy on how to minimize the effect of disadvantages. Only constant work on improvements and achieving progress as well as building bridges in communication can give beneficial results.