In house or outsourced software development team? Both!

#General | 3 min to read by Abulfaz Ahmadov on Oct 04



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Today, the idea that “every company needs to become a software company” is considered almost a cliché. Marc Andreessen penned his famous “Why Software Is Eating the World” essay in The Wall Street Journal five years ago. Nowadays, all of the companies are becoming a software company, the software revolutionized almost every industry, starting with taxi ordering and flights booking ending with food delivery. Even the most conservative industries, companies automate a lot of processes, analyze the market, improve customer service all with the piece of code.

Thus, there is a great demand in software developers and here are two ways to go, the first one, you can set up an in house team or outsource to nearshore or offshore provider. Both these approaches have some pros and cons.

Most people are inclined to prefer in house team and it’s quite natural. You have your team in front of you just sitting in one office, it’s easier to set up a communication, you manage directly everything that is happening. All in all, you can grab some bear on Friday with your mates!

On the other hand, it’s quite hard to find a candidate quickly, it takes some time and costs quite a lot. On average it takes up to 3 months to find the right software developer you need and 10-15 000 USD per hire if you ask a recruitment company to help you. What is interesting, the company spends a similar amount of money even if they hire on their own and it looks like the scarce in developers grows because the demand grows – every company becomes a software company nowadays.

What about outsourcing to offshore or nearshore provider? It some advantages and disadvantages as well. The biggest risk here is to run into a poor-quality provider, that would fail your projects, waste your money and time, unfortunately, it happened to many companies and after the bad experience, they are inclined to avoid this idea.

But does it mean everything is so horrible with outsourcing your projects to another company? Not, because of there plenty of startups and enterprises that have an offshore development team that helped them to achieve their results, providing high-quality products, saving them a lot of costs and time. Let us just name a few companies that have remote teams in Ukraine: JustEat, Lebara, Here, JustAnswer, Thomas Cook, Daimler AG, Similar web and many others. Thus, it’s not the outsourcing bad, there are bad providers. If you chose a reliable partner – you are going to benefit a lot and build great products to win the market.

How to choose the right partner? First of all, not only the partner matters but also your approach and the model of cooperation. We at Mindecs believe that the best working model is a staff augmentation model when the company directly interviews all the developers suggested by the offshore staffing provider and manages the development process directly using talents provided by a software development partner. In other words, in this case, the company uses remote software developers provided by the third party, just like their regular full-time members and takes part in hiring, managing and controls every developer they are billed for. In this case, you will extend your team flexibly with remote developers, that would cost less than in house team, producing the same result and minimizing the risks.

When choosing a vendor, pay attention to the attitude they approach your request, the proposal they suggest. It’s a great idea to check for some feedback of existing customers and even talk to them directly to ask for their experience. If your company is not a big enterprise corporation, then it’s more reasonable to consider small and medium-size development houses, where you can talk to Founders directly and make sure if the company has the similar values with your company.

To sum up, companies should mix both in house and have a reliable offshore development partner to grow effectively and produce great products. You need an in house team and strong CTO, Tech leads in a house that can set up the development process and then you would grow your product team easily both in house and remotely just like many companies already do.

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