Each organization that associates its activities with a website or web service comes to the same question: which is more profitable – to organize your own IT department or outsource web design and development. There is no single answer to this question, each approach has its pros and cons. In this article, we will try to parse them. Meanwhile, according to Clutch companies choose to outsource to:
- Increase efficiency
- Increase available expertise
- Increase flexibility
- Free up employees’ time for other tasks
- Increase available resources
- Reduce operating costs
Recruiting and Onboarding
If you were to ask anyone from the HR department, they would most likely say that looking for a specialist in IT, and in web development, in particular, is not an easy task. Professionals with extensive experience either already work for full-time, or cost more than one would expect. You can hire young or inexperienced specialists, but as soon as they gain some experience and master a few skills – they either ask you for a bigger wage or looks for someone who is ready to offer one. The selection of programmers, designers, layout designers is a long and dreary process of checking test assignments, CVs, communicating and waiting for answers, which can last for months or even years.
Obviously, when hiring a ready-made team or a specialist, this problem completely disappears, and you will not have to deal with recruitment issues. All that remains is the process of choosing the team itself.
Building and Motivating Your Team
It’s not enough to hire people, you still need to organize their workflow. Having different people work on the same project often means having conflicts and miscommunication between them. Most likely, the IT department will bring together people of different ages, sexes, and certainly – completely different characters. As a result, the tasks of the head of the department will be not only technical but also psychological: to find an approach to each member of the team, organize the communication in the most efficient way, deal with any conflicts or misunderstandings.
The issue of salaries and motivation is also quite important. Often, the lower development cost is the main reason to outsource web development. For a reference, just compare, let’s say, web developer salary in Ukraine and the UK – the difference is incredible. Each employee has a different approach to work and therefore different requirements regarding material compensation. One way or another, the delicate money issue will have to be addressed with every specialist.
In the case of the outsourced development team, in most cases, your subcontractor deals with all of these issues while all you need to think about is hour rates and project deadlines as per your agreement.
Employee Training
There are no absolute specialists in all matters, especially in the IT field. Technology is one of those industries where knowledge becomes obsolete in a matter of weeks. Each programmer is undergoing a constant process of obtaining additional information and knowledge. In case it’s your in-house team, employee training comes at the expense of working time, that is, at the expense of the employer. Training in an outsourcing team is laid down in the normal hours only if you need to introduce a special new technology or upgrade to new software versions. At the same time, it is quite likely that the specialist working in a team on projects of various types has already encountered a similar problem and knows the ways to solve it, so you do not have to spend time on training.
Accounting
HR accounting is a complex task. It’s the process of calculating salaries and bonuses, holidays and sick leave, contributions to funds, taxes. When the staff grows, a separate accountant has to be allocated for personnel management, which additionally increases expenses.
The subcontractor will independently solve all issues with personnel accounting as part of the work of its company. The customer only needs to draw up standard service agreements and formalize the work with ordinary acts.
Operating expenses
The activities of the IT department are associated with considerable operational costs. You would need to rent more office space, providing hardware, software, cover corporate expenses and other small expenses. With the outsourcing team, you save on all these things.
Outsourcing vs In-House: Pros and Cons
Still wondering why companies choose to outsource work? By choosing this model you get to significantly lower operational costs. You won’t have to face any recruitment issues. There’s no need for micromanagement as well. The work starts from the first day – all specialists are ready to go and the workflow is established. On the other hand, you should also take into account the following disadvantages. You would not want to interfere with established processes or change much about it. The response time may be delayed (depends on time zones). It’s harder to control the protection of commercial information.
These are by far not all of the nuances to take into account when making the decision but it really depends on what kind of company you choose as your subcontractor. Some may promise you the moon but will fail you eventually while others may be modest in their promises and deliver you the solution of your dreams. In other words, one should know how to outsource work properly to make it successful.
Building an in-house team is not a piece of cake as well. It’s never fast and you should be ready to face tech talent shortage (depending on your location). The advantages of building your own team are as follows. You get more control over the project. It’s much easier to protect work results. Faster reaction times to tasks, especially small and urgent ones. It’s also easier to protect intellectual property. You get to organize your own workflow. You get the ability to grow specialists from inexperienced interns.
But you should also consider the disadvantages of this solution. You might face challenging staffing issues. Be prepared for comprehensive accounting and higher operational costs as well as higher salary rates. You can have problems with workforce compatibility. It takes a lot of time to set up a team from scratch
Usually, only large companies, for which the disadvantages associated with costs do not exceed the advantages of controlling the situation, build their own development team. When a large offline business wants to go online and can be afraid of large investments in a website or other web services, this choice will ultimately become optimal.
Outsourcing has been popular since companies from the USA started setting up call centers in India and since then, it has become much more efficient. Successful outsourcing examples make it very tempting for new to choose this particular hiring model.
