To outsource or not to outsource?

Guidelines on making the right decision for your venture.

What if I told you that you should leave your newborn with a total stranger until maturity. Nuts right? Now, what if I told you that you need to stay with your newborn 24h/7days a week until self-sufficiency. Even more scary right? How about taking care of the baby alongside a trained professional, a certified and caring Nanny? Perfect, isn’t it? You are still the shot caller but someone else changes the diapers when You want to go for that romantic diner for two.

Outsourcing companies are those Nannies in the IT World. The perfect balance of efficiency, budget and control.

Of course, there are good and bad nannies. Expensive and cheap ones. Ones that have certain areas of expertise, niche skills developed to better take care of your baby. Not everyone can afford a nanny and not everyone has good experience with nannies. But no one can argue that the concept is a damn great idea. Now the question is not if, but when will you need a nanny. Because let's face it, You do treat and think of your venture as of Your baby.

I will help you decide by answering the following questions via this article:]

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·?????The Why? and When? of partnering outsourcing companies?

·?????What benefits are included with outsourcing and is it effective?

·?????What can go wrong with outsourcing?

·?????What to ask an outsourcing company before my decision?

·?????When outsourcing is not a good idea?

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WHY and WHEN?

Let’s not kid ourselves, It’s all about the people, skills, and experience. You have the same tools to acquire those people - the one and only perfect fit. The difference is that Outsourcing companies have a much much larger pool of talent. After all, more than 70% of people are hired due to recommendations. And on top of that, outsourcing companies cooperate, assuring that the team is well fitted. Great talented people, good work organization are bound to achieve better results. If on top of that, you add a good leader that knows what he/she is doing. You end up with a team that is capable of working smart. ‘Smart Work’ is success fastlane. This is exactly the “WHY” of outsourcing.

“If you think hiring a good employee is expensive. Wait until you hire a bad one.”

Contrary to popular opinion, outsourcing is cheaper than building an inbound team. The reason is simple – better productivity at cost-efficiency. Experience allows savings. Just think how long much longer do you perform any given task the first time than the hundredth. However, with the increasing demands for outsourced developers, the industry grew to have outsourcing companies that hire just about anyone, those You have to look out for. A few “good to know” insights into outbound software teams:

-?????????Experience. Outsourcing agencies provide you with credibility, a dedicated office, and an established working pattern.

-?????????Productivity. A team of 3 developers shows the productivity of 5 individuals.

-?????????Skilled management. Outsourcing companies have one goal – to develop software. When You do something daily you get good at it.

-?????????It’s convenient. When someone else is responsible for developing your project You have more time to ensure it succeeds.

-?????????Up until a certain level of the enterprise, outbound software teams are the Best Value For Money

So that answers why? Let’s talk about when? Because Companies outsource for three reasons.

1. Because they have limited time and the investors are pushing.

2. To overcome problems of finances, office space, lack of knowledge, etc.

3. They did it before.

In the two first scenarios, the common element remains that outsourcing the software development process at the right time can save the company, or entrepreneur, a lot of stress. The third one is due to familiarity and experience. When you already have a system that works well, there is no natural need to change it.

Different types of ventures have different needs and therefore outsourced teams solve problems of those ventures at different moments of their life cycle.

Small ventures:

For single entrepreneurs and smaller ventures, it is always a good idea to outsource software developers early. At best, if you don’t have tech skills or a tech-savvy friend, probably during the idea stage itself.

The business plan and road map are done and down on paper, it’s time to involve the development team or architect. They need to make a tech evaluation and share their inputs as to how the idea can be executed. The “outsourced” part allows a better perspective because they are not emotionally involved and can be sincere with their opinions. Allowing the founders a better perspective by providing a fresh set of eyes.

Having someone well-acquainted with the project right from the very beginning gives an advantage by making developments more adaptable to future scenarios.

Startups

Startups have high potential and unlimited possibilities. But the truth is that 80% of new ventures blow out within the first 3 years. Internal conflict and bad planning aside, there are two core reasons for them to fail. Those are: running out of funds and poor execution. This is something that can be avoided with the right mindset and planning.

Outsourcing allows you to put a price tag on your product. Signing a fixed price contract puts the risk on the service provider, not You. That scenario works with small ventures. Bigger ones need a different approach.

Medium and larger ventures also have financial bindings and limitations. But they need to have a core team to provide the initial due diligence of how the long-term road map should be. If you’ve seen “the social network” it’s exactly the moment when shares are established. Outsourcing comes when development is in the implementation phase. This way, the start-up also has the exact blueprint of the product ready to make the outsourced developers understand exactly what is expected from them so that no time is wasted.

The thing to remember here is that the start-up needs to be 100% sure of what and how they want their project to be. Small changes and pivots are natural, but if the core concept flips, that can turn out very costly for any development process. Outsourced or not.

Mature companies

The reasons behind outsourcing in MNCs are completely different. They don’t have the financial crunch like star-ups, nor any scarcity of managers. Also, depending on the scale, inbound teams are a financially liable decision.

For those companies, a good reason for outsourcing is the lack of assets. They have the work order, the deadlines are established, but there is no manpower to do it. At scale, the larger the organization grows the bigger the managerial costs and the ordinary hassle of it all. In these cases outsourcing the work to partners is just rational and convenient.

By now You already realize that there are a lot of benefits.

·??????The additional experience

·??????Value for money

·??????The right set of skills

·??????Time efficiency

·??????Organizational efficiency

But it’s not all fun and games. Some things might not work out just as smoothly.

WHAT CAN GO WRONG?

With outsourcing it's like with marmite, some people love it some hate it. While some can say they found the best of the lot throughout sourcing, some might have turned skeptical because of a bad experience.

The approach towards outsourcing should be rational not emotional. If a company is making decisions based on bias, it puts itself in unnecessary boundaries.

Bad experience comes with past failures. The reasons for those might lie within your outsourcing partner but some factors may be in our control. Other, unavoidable factors cannot be identified. Outsourcing is not something beyond control, it actually makes controlling easier by distancing yourself from the problems that occur within HR management.

Furthermore, just because one doctor made a bad diagnosis, doesn’t mean that all doctors are bad. Just be careful who are you deciding upon, and keep in mind the following:

Cost-effectiveness

It’s simple math, an outsourced developer who charges $35/hour but takes 100 hours for project completion, turns out to be costlier than a company that charges charge $50/hour but may take only 50 hours.

Specialization not generalization

With the advancement of different technologies, you can find two types of engineers. The first type knows all the technologies, the second type is the one who has mastery in one (or two) technology. Don’t get me wrong, sometimes generalization is good. But to master a technology takes a lot of time. That’s why experts stick with one or two technologies max.?

Don’t force anything

Sometimes your intuition is right. Even with skilled engineers, if the conversation left a bad aura and you’re not sure about the person, let go. You need good communication with the engineer. Don’t get me wrong, he doesn’t need to be your friend, but he needs to understand the idea behind the project. Especially if it’s a long-term commitment. Apart from the skill-set and language, it helps when the developer has a good work ethic. This may include things like better reporting practices, flexibility & adaptability in working, and so on.

Go for outsourced teams rather than individual developers.

In software development 1 + 1 = 2,5 (or even 4) It’s better to outsource a whole task because it’ll become an internal “problem” of the whole relevant team and the team leader. When one developer is on the job only he knows what is to be done, he doesn’t chat about it with his work colleagues so he gets no immediate feedback. This is ok when the tasks are clear and simple, or with “support” work, but not good for creativity. When outsourcing creative tasks to an outsourcing company, the whole team is talking and thinking about it constantly. And that is a huge benefit for You. Because You only pay for the team you hired.

Do a background check

You check google reviews when you buy your flip-flops. It would be irrational not to ask your partner for case studies and contact their clients. Your choice needs to be a rational one. Don’t go for the first company that reached out and has a great presentation and offer. You know very well that we all have them.

Remember! One bad experience cannot be considered as a measure of the capabilities of all outsourced developers. The easiest way to ensure successful project completion is by making sure you find the team, that fits your idea is capable and reliant. ?

HOW TO FIND THE RIGHT TEAM?

Here is a set of questions to ask yourself before choosing the right fit for You. Just to help You out, We also prepared the answers to look out for.

1. How to monitor the work progress?

There are applications that you can use to automatically monitor progress, screen sharing, reminders, and everything in between. So the only thing you need to be concerned about is whether the developer understands the tasks at hand, no matter if they live in the same city or miles away.?

2. Are outsourced developers better?

NO THEY ARE NOT, and anyone who says differently is misleading you. The market of software developers (please excuse treating those as an asset in this sentence) is available to all of us. Some specialists prefer to work with startups other with software companies and others with corporate end clients. Anyone can find great talent, the only benefit of software companies is that we have it a lot easier than others due to a large pool of insiders.

They are also devs who have worked in the industry and started something on their own after gaining considerable experience. But they also work rather with software companies due to a very bad reputation of freelancers.

Freelancers might be a good choice for smaller web projects. But prepare yourself for delivery delays.

3. What is a reasonable choice.

It all depends on the work that you want to get done, as well as the skill level of developers available for hire. Companies spend mountains of cash on finding and hiring local/in-house developers and this move results in budget costs for other areas. Overseas outsourcing enables you to choose from a pool of highly skilled software developers and get a precise estimate.

So the best answer is, do the math on your side first and then check the offers from outsourcers.

4. Won’t multiple companies providing single developers end up with a headache?

Yes, it can be challenging. But When you hire from an outsourcing company, they can also provide you with a project manager to overlook all the outsourced developers for your project. One PM for the whole project to coordinate the work of all companies. This not only leaves you relaxed, but it also helps you to stay focused on other aspects of your business.?

5. What about bad apples?

Here outsourcing has a big advantage. Because we all spend resources on obtaining good candidates. We test them thoroughly, just as you would but… If you decide upon our developers and some turn out not to be a good fit, we just substitute them, and that’s it. If you hire an in-house developer, after all the great filters that you’ve set up to check the candidate it might end up that after 1 month of trial You have to let him or her go, but the costs of hiring are already spent.

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WHAT TO EXPECT FROM YUR PARTNER

So, your mind is made up. And The most reasonable action to take is to outsource your development team. Great! Now, what Should you expect from your new partner? Many times, a project starts off well and problems arise later on, how to be prepared that this doesn’t happen.

How do you work?

The most basic question to ask any outsourcing company. It helps you to understand if your processes and that of the 'outsourced developers' match. It is also a good way to judge how serious the company really is.

Do you have experience with similar projects?

Gain experience from past mistakes. If you find an outsourced team that has worked on similar projects. This gives some kind of assurance that the team is a good fit, but also, it can give a good measure of the capabilities. Looking at past achievements also acts as a natural reference point.

How to communicate

Good communication in any venture is crucial. Ask your potential partner if there will be a single point-of-contact, whether you will be able to talk with the 'outsourced developers' directly, daily/weekly reporting, and such questions. Also, it will establish your role in the project and the level of your needed intervention.

Be wary of companies with complicated communication procedures.

Storage and safety

Sometimes you will require certain code parts after the job is done and you may find them missing. It is always good to have the entire files and codes with you for future use, as well as a backup. Ask about the storage procedures and safety

What if I’m dissatisfied with the services provided to me?

Yes, it happens that the cooperation isn’t working out. Look at the warning signs we mentioned before and try to react in real-time. A major f*up might happen on the companies side, check that they are properly insured.

Why should I hire you?

Because we are professionals. We listen and react accordingly. We are not magicians and will never tell you different, but we are very good at what we do!

We hope this article will help you to make a well-informed decision when choosing your software team. There are positives and negatives in each system of work. It is all about finding balance and the best solution for your project.

Going with trusted companies with a good reference and experience is always a safe bet. But it is also a smart move, it allows you to focus on sales, investors, marketing, and strategy. With outsourced engineers, you only need to control rather than organize the tech team. Outsourcing companies are in demand and for a very good reason.