In-house software development vs outsourcing?

What is better? As with most things, it depends. It depends on the type of software you want to create, it depends on the plans you have for that software, and it also depends on your existing infrastructure.

That is, if you are just looking to build a simple web page, or you just simply want to kickstart some project, or you just want to expand your software with an specific functionality, I think outsourcing makes more sense. Cost-wise and time-wise.

Cost-wise because it’s usually cheaper, and time-wise, because you don’t need to spend time building a productive software development team.

But there is another scenario, where I think in-house developers make a lot more sense.

Product development

And by product, I’m talking about a software that should live through the years, be released from time to time, and be built over the previous source code base. A product doesn’t necessarily needs to be released to the public, but can be an internal product that is used in-house.

Develop software it’s an art, and write good code, in the same way as paint a nice painting, singing professionally or writing a good book, requires a lot of experience. You cannot be sure you are going to get such kind of experience from an external company, as you usually don’t know the profiles of the people working on your project. You don’t interact directly with them, so you lose the control over what it’s being done and who is doing it. You just simply cross your fingers hoping they will do a good job.

A software product with several years in the market, usually is made up by thousands and thousands of lines of code, and the knowledge gathered during the creation process, cannot be easily transferred to other developers. You cannot simply hire an outsourcing company, hand over them a big code base and expect to get nice results. That simply doesn’t work.

Also, the reaction time to changes working with an outsourcing company, tend to be higher, that is, if you want to change the requirements, it takes more time to get a new quote from them to cover those changes than hand over a new set of requirements to your employees.

Another hidden cost, usually overlooked, are the communication costs, it’s not the same having to communicate with your employees, and if there are misunderstandings, you can make any change to the process, or even to the company culture. But you cannot do that with an external company, you will need to accept the way they work or find another company.

So if you are serious about creating high quality software products, you need to hire developers, and not outsource to external companies that are not fully aligned with your goals. They are NOT part of your company, and you are just another customer to them.

Developers that are your employees write code that they know they will need to maintain, revisit, refactor and make it grow for several years, so they have that in mind when they are coding.

Outsourcers just want to get the job done as soon as possible, so they can send you the invoice.

Outsourcing your software development makes you lose control of the process, quality tends to be lower and response times are usually higher.

So what’s the solution to have employees, ensure the communication flows and keep costs under control?

Creating captive units of your business offshore, so you are setting up an office in a foreign country.

But this process could be daunting unless you are a very big company, so in order to help with this process, we created BranchCreation.

BranchCreation

We are a team of professionals who are dedicated to providing the necessary services to manage the Spanish branch of your US/EU company. We help you create the branch and also to manage it once the branch has been established so that you can focus on running the business.

Our customers are USA/EU based software development companies looking to expand their workforce by hiring the best software developers, but at a fraction of the cost. We are not an outsourcing company, instead, we build the team you need to your exact specifications; this team becomes your employees.

Want to get more information? info@branchcreation.com

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