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How do you know if you need an outsourcing team?

In the world of rapidly developing technologies and business practices, more and more companies are faced with the question of choosing between independent product development and attracting external resources.  According to the results of a study by the Kazakhstan Association of IT Companies in the first half of 2023, the growth of IT services amounted to 476.8 billion tenge, which is 56.4% more than in 2022.

In this article, we will look at how to determine if your company needs an outsourcing team.

Outsourcing is the transfer of certain business processes or functions to a third party. In this case, the company engages external service providers to perform certain tasks, which may include development, accounting, marketing, etc.

Outstaffing is a process in which a company hires employees through a third—party intermediary, usually a personnel outsourcing firm. Such employees work within the company, but are formally employees of another company. 

Consider an example

Let's say we have a clothing store that is creating its own marketplace and during development decides to use outsourcing to hire a frontend developer. Since before the release of the platform, one of the developers leaves the company, and it is not so easy to replace him in the office.

To solve this problem, the company turns to Sailet, which provides an hourly development service and can provide the right specialist. Sailet provides an experienced frontend developer with five years of experience working on React. A project manager is also attached to it. The manager creates a BackLog, gives programmers access to the site and gives the customer the opportunity to control the creation process every two weeks.

Now let's look at the pros and cons of using team outsourcing in this context:

Positive

1) Saving resources:

One of the main advantages is the ability to reduce staff maintenance costs. The company can avoid the costs of training, insurance and other social benefits associated with hiring employees.

2) Specialization:

Allows companies to use the services of experienced specialists in a particular field without forming their own team. 

3) Flexibility and scalability:

Companies can easily scale their operations by attracting additional resources from outsourcing partners if necessary. 

4) Focus on key tasks:

Allows you to focus on your core functions and strategically important tasks, delegating operational and support issues to external suppliers.

Minuses

1) Loss of control:

A company may have difficulties managing external suppliers and ensuring compliance with standards.

2) Data security issues:

By transferring confidential data to external contractors, you may face risks to their security, especially in areas where it is important.

3) Communication difficulties:

Differences in time zones, cultural characteristics and language barriers can cause difficulties in communication between the company and the outsourcing partner.

4) Dependence on external factors:

The company depends on its outsourcing team, and their problems can have a bad effect on its business processes.

Focus on core competencies

When a company wants to focus on key tasks, outsourcing can be an ideal solution. By shifting routine work to external performers, the company frees up resources for important purposes.

Seasonality and project load

During periods of high workload, outsourcing helps teams quickly increase the number of employees as needed, minimizing financial and time risks.

Saving resources

If a company faces financial difficulties or seeks to reduce operating costs, outsourcing can provide access to quality services at a lower price than the maintenance of internal divisions.

Global work

For companies focused on global markets, outsourcing can be an effective way to maintain operations in different time zones and ensure continuity of work.

Now let's analyze all the pros and cons of self-development

Positive

1) Full control:

The team has the ability to form strategies, make decisions and change the direction of the project without the restrictions of external parties.

2) Flexibility and quick adjustments:

Self-development allows you to quickly respond to changes in requirements, technologies, etc., minimizing time costs and providing flexibility in project management.

3) Full understanding of the product:

Internal developers have a better understanding of the company's goals, which helps to create products that exactly meet the requirements.

Minuses

1) Limited resources:

The opportunity to face limited resources in the form of time, experience and personnel. This is especially critical when a large amount of work is required in a short period of time.

2) The risk of problems:

Without the support of specialized experts, the company may face risks in the form of technical problems that can slow down the development process and affect the stability of the product.

3) Responsibility for all aspects:

When a company develops a product independently, it is responsible for all stages of the process, from the idea to the support. Which can be difficult and risky, especially for large projects.

Long-term projects

If your project is focused on a long-term perspective, for example, involves the development of a product with a long-term lifecycle, internal investment in the development team may be justified. This will provide a stable foundation for the success of the product and will allow you to flexibly respond to changes in strategy and market requirements.

Critical Privacy

If your project requires a high level of confidentiality, internal development can provide a higher level of data protection. Working within your own team, you can more effectively control access to confidential information and manage the level of security, which is especially important in sensitive industries such as medicine or finance.

Project complexity and unique requirements

If your project is characterized by high complexity or unique requirements, then internal development can be a good alternative. It allows you to manage the development process more flexibly, adapt to changing conditions and respond faster to customer requests.

Process control

When full control over the development process is important to you and you want to avoid dependence on external vendors, internal development may be the preferred option. This makes it possible to manage time, resources and priorities more flexibly, taking into account the specific needs of your project.

To make a final decision between forming your team and using outsourcing, you need: 

1. Evaluate the deadlines, budget and level of expertise required for your project.

2. Analyze whether your company has the necessary competencies or whether you will have to create them from scratch.

3. Evaluate your readiness to manage risks and remote team.

After collecting and analyzing all this information and reading our article, you will be able to make an informed choice. If the choice fell in the direction of outsourcing development, we are ready to provide you with hourly development.

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Максим Беляков

Nov. 27, 2023 14:55

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