Entrepreneurship & Small Business

Is outsourcing the best decision in case of software development?

  • Last Updated:
  • Apr 20th, 2019 4:38 am
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Banned
Mar 13, 2018
7 posts

Is outsourcing the best decision in case of software development?

I need to make a decision for my company about making several apps and programms for our specific pusposes. What do you think?
9 replies
Deal Addict
Mar 16, 2015
1590 posts
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Need more info...
You are talking about 10 MM deal or a 10000$ deal.
For outsourcing to work effectively your deal need to be large enough for lets say a TCS or Wipro or infosys to touch it.
Else try to explore local smaller companies who have done such work to other customers in your business domain. YOu will get better support locally
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Nov 22, 2017
16 posts
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USA, Colorado
Depends on certain specs of your task, you should provide really more info about them for getting more detailed response :) But in general it's the same like in case of outsourcing for solving all types of business tasks. The main pros of outsourcing are:

- more qualified and fast work (because your tasks are completed by the specialists in the certain sphere) http://www.josephchris.com/9-pros-and-c ... rcing-jobs
- reducing risk factors because of dividing the job between you and the external vendor
- reducing general costs (especially in case of recruitment and operational ones, it's one of its main advantages)
- providing more time for concentrating on core business processes than the supporting ones https://idapgroup.com/blog/why-outsourc ... velopment/

It's fair also for outsourcing for the software development too, besides for completing the tasks you mentioned you need to have good programmer skills and not all companies can provide internally such professional workers. So if it's your situation too, than it's better to choose outsourcing.
The future is bulletproof, the aftermarth is secondary (c)
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Mar 23, 2008
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Are you talking about out-sourcing locally, or off-shore? The first I've seen work fine, the second has been much less positive.

C
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Mar 13, 2019
1 posts
Santa Clara
Outsourcing has both pros and cons. And a lot more cons than people realize. First off obviously the pro is you will save money. Hiring people in India or wherever else you want to hire from is going to cost you less than hiring here. However as with most things in life you get what you pay for. Many of these developers https://diceus.com/software-development-outsourcing/ are pushed into it by their parents and aren't especially good at it, learn at colleges that often times dont even have computers to code on, and in general are not as well versed with things as a college grad here.

Are there exceptions? Of course. There are many good foreign devs but the problem is you will have to sort through a lot of trash first and if you are hiring a team, they are going to have several of the lesser skilled people on it.

Secondly is lack of face to face communication. You may think you can just Skype or do video conferences, IMs and phone calls but there is no substitute for sitting down with someone and going over things face to face. When there are real problems or close deadlines to hit you want to be able to sit down and go over things in person, it saves multiple hours of extra work.

Thirdly is a differing culture and expectations because of it. This is something that is not talked about enough but ends up derailing a lot of these outsourcing deals in the long run.


So while outsourcing seems like the best of both worlds it is quite this easy.
Last edited by Ufioni on Mar 23rd, 2019 3:34 pm, edited 1 time in total.
Newbie
Mar 31, 2019
2 posts
Call for help. The only ways I know. Well, you can study that subject but I wouldn’t. There are professional guys who can help you. All the question about IT control costs, advisors, scale economy and so on could be helped very fast and easy. Just visit their website to know more about that team. I like what they are doing and consult with them each time when I got a question like this one. I think that there are other resources, but this one is the best.
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Apr 8, 2019
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Clifton, NJ
Have you ever wondered, what is your true employee cost? Based on research from Joe Hadzima, a senior lecturer from MIT, the true cost of your new in-house developer could be 2.7x the base salary. If you cover all employment taxes, benefits, rent, equipment, and all non-billable hours (organization, meetings, trainings, business trips, team integration events etc.), you could pay, for a full-time developer, not only $100k, but it could add up to $270k!

Toptal, which is a platform for freelancers, made a tool to calculate the true cost of an employee and consultant. Based on their research, the base rate for an internal employee of $50 per hour will double to up to $100 per hour if you add all the costs. For a consultant, the cost of the same hour for $50 will in the end cost no more than $60.

It’s a huge saving per one in-house developer.
Thanks,
https://diceus.com/10-ways-can-deceived ... pers-2018/
Last edited by Mirent on Apr 23rd, 2019 12:31 am, edited 1 time in total.
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Aug 15, 2015
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Kognisjon wrote:
Jun 18th, 2018 7:10 pm
I need to make a decision for my company about making several apps and programms for our specific pusposes. What do you think?
I think you are asking the wrong people. No one here knows what your situation is.

What are you currently working with? Why do you need to make your own apps and programs? What is the problem? What are these specific purposes?
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Nov 18, 2002
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Mirent wrote:
Apr 16th, 2019 6:20 am
Have you ever wondered, what is your true employee cost? Based on research from Joe Hadzima, a senior lecturer from MIT, the true cost of your new in-house developer could be 2.7x the base salary. If you cover all employment taxes, benefits, rent, equipment, and all non-billable hours (organization, meetings, trainings, business trips, team integration events etc.), you could pay, for a full-time developer, not only $100k, but it could add up to $270k!

Toptal, which is a platform for freelancers, made a tool to calculate the true cost of an employee and consultant. Based on their research, the base rate for an internal employee of $50 per hour will double to up to $100 per hour if you add all the costs. For a consultant, the cost of the same hour for $50 will in the end cost no more than $60.

It’s a huge saving per one in-house developer.
You mean an outsourcing shop made a tool touting that outsourcing is best? Shock and horror.

FT employees are evidently higher cost but I would argue much higher value also. It's nowhere near 2.7x base btw but glad someone made a 'study' out of it. No shoe fits all sizes, there's a model that can work both ways or indeed there's nothing stopping you from a hybrid approach of having both onshore staff and offshore resources for added scalability.
Member
Aug 16, 2013
467 posts
100 upvotes
Toronto
Need more details and I might be able to help.

If it's a very small business, better to outsource completely.

If SME and you are working with big guys, hire local tech leads or solution architects. Actual devs can be offshore.

Again, will need more details to suggest the best option for you.

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