Simply said: NO.
Don’t get me wrong, I strongly believe that every company looking for additional resources should consider to outsource. This is not a simple yes or no question. if you want to make sure that it makes sense to outsource in your case you need to consider various factors before doing so.
Every IT-conference I attended, I met some sales people from software agencies located in Eastern Europe or Asia that believe outsourcing is always the right choice. They promise fast and easy solutions and claim that your projects can’t fail when outsourcing with them. Maybe you know how it feels like to get 10 mails a week from companies that are trying to sell you their IT-Talents. For decades CEOs and CTOs got bombarded with paroles like
“we are the best solution for your IT-product”.
I believe, this is the main reason why many people get frustrated when they hear the word “outsourcing”. I am aware of this dilemma and know that not all outsourcing-companies are really worth considering. With this article I would like to share the main points you should focus on when you consider to outsource your IT project.
When you shouldn’t outsource:
1. Is the product your Core Business?
Never underestimate the danger of outsourcing your core business. The real essential part of your business should be done by yourself. Direct control and loss of essential business knowledge could be at risk. If there is no other way of outsourcing your core business due to whatever reason, it is very important to find the right strategic partner with whom you can essentially trust your business with. Synergies between your outsourcing partner and you are a necessity to assure a cooperation that is long-lasting. Nevertheless, if this product represents the core of your company I would advise you to firstly do it yourself and hire employees to develop it. And secondly, outsource your core business, however only if there is no other way.
- Are you having a financial crisis?
An important part to understand when you consider to outsource is that it is not just an option to save money. It also is an investment to assure that a project can be done in a certain time frame & at high quality. At the beginning you will have to spend some time on building a communication standard and plan resources accordingly. Obviously outsourcing is cheaper than hiring a local team. However, I would not advise you to outsource just because you cannot afford your own developers. Projects with high expectations often fail because they are not done with enough commitment and engagement. So consider other advantages, like having experts right away who are specialized in that specific field or being able to begin your project much faster than if you would hire these developers. By working with an experienced software agency you benefit from the acquired knowledge & experience in a particular field the company brings to the table.
When is outsourcing an option to consider?
- Do you need a partner with a specific expertise?
For the lifetime cycle of every company you will be confronted with the famous buy or make decision. Do you want to hire experts for the development of a project and do you need this specific IT expertise in-house after that project is done is an important question to consider. Therefore you are desperate to find a qualitative & cost-effective way to get the job done. Well, that is the ideal spot where outsourcing comes into play. If you think that finding a professional with a certain skill-set in your own market can be too big of a challenge or you know that you will only profit from the additional personal for this project, then outsourcing should be your choice.
- The only way to grow is to invest resources efficiently while focusing on your core product.
It should always be in the back of your head that focusing on your core product is always on the forefront. But if you have the need for strategic, monetary or any other reason to take a project on but investing heavily in an IT department that might not suit you in the long run, outsourcing is the ideal way to go. By contracting a competent software agency you not only have the advantage of working with a team that already has the experience in working together and tackling similar projects for other clients, but also does not make you change your team dynamics due to one project.
3. Hiring is not an option?
HR experts know that the process of finding the right people for your company, can be frustrating and exhausting. When deciding if projects are worth to take due to the fact your company has to hire a certain amount of people with a niche expertise, outsourcing can be a viable option. It can allow you to avoid spending a lot more money in the future and still give you the learnings of this project.
All in all, if a company has to decide whether to outsource or not, these factors should always be considered carefully. Outsourcing is a big decision that tends to provoke strong reactions. The decision on whether to outsource or not can differ based on what industry you’re in, what experience your colleagues have had or what opinions you take seriously. However, it’s important to have the basic pros & cons of outsourcing at your fingertips when the time comes to make a decision.