Simple steps for deciding when to outsource development
By 10Pearls editorial team
A global team of technologists, strategists, and creatives dedicated to delivering the forefront of innovation. Stay informed with our latest updates and trends in advanced technology, healthcare, fintech, and beyond. Discover insightful perspectives that shape the future of industries worldwide.
Considerations and Best Practices for Deciding When to Outsource Software Development
In today’s fast-paced and competitive tech scene, businesses must often decide whether to handle software development projects with in-house teams or outsource them. Although outsourcing development projects can offer numerous benefits, it may not always be the right choice. In this article, we explore when to outsource software development and when to keep it in-house.
Blog contents
Outsourcing software development executive decision process
Is your project clearly scoped?
Consider scoping it first. Need help? We can assist! Learn more
Does your in-house team have the skills to complete it?
Outsource fully or get a consultant to guide your team. Learn more
Does your in-house team have the bandwidth for this project?
Augment your team with extra support.
Learn more
Is this project aligned with your core competencies?
Outsource fully/partially based on your team's skills. Learn more
Do you have the budget to hire and train staff?
Augment your team for a cost-effective solution. Learn more
Will those staff be needed for the long term?
Augment your team and focus on flexibility.
Learn more
Are there strict time constraints?
Do it in-house or collaborate with external experts! Learn more
Augment your team for faster results.
Identify your project requirements
List the full scope of your project, including:
- Goal: The project’s final goal.
- Deadline: The final date for project completion.
- Tech stack: The platforms and systems dev teams will use.
- Timeline: The steps required to complete the project and expected completion time for each. It’s usually best to create a timeline by working backward from the deadline.
- Development skills: Specialized development skills necessary to complete the project.
- Bandwidth: Number of man-hours required to complete the project.
If you lack the skills or experience to scope your project clearly, a consultant can help. This step is crucial to help ensure you select the best tech stack, identify the skills you actually need, and develop a timeline that makes sense for your project. Missing the mark on any of these components can put your budget, timeline, and the success of your project at risk.
Once you have a clear and complete project scope, you can assess whether it’s best to complete your project in-house, augment your team, or outsource it.
Assess your in-house expertise and bandwidth
Does your team have the skills and experience required to complete the project?
To be successful, your team should have prior experience with the range of your entire tech stack and cover the full range of development skills needed to complete the project. Ideally, they will already have experience working on a similar project from start to finish, so they’ll know what roadblocks and challenges to expect.
Your team will also need to have enough available bandwidth to complete the project according to your timeline. Compare their available bandwidth to the hours required to complete your project on your timeline.
- If your team has sufficient experience and bandwidth, your best choice is likely to keep the project in-house as long as no other competing initiatives appear on the horizon.
- If your team has the experience but needs more bandwidth to complete the project, you will need to expand your team with new in-house hires or outsourced developers.
- If your team has the bandwidth but not the experience, you can either adjust its composition or augment it to compensate for skill gaps.
- If your team has neither experience nor bandwidth, you will likely want to outsource the project as a whole or in part.
Augmenting your team with outsourced developers is an effective way to fill skill gaps. It is especially effective when only a discrete portion of the project requires specialized skills, making a full-time hire cost-prohibitive.
Fully outsourced development is a better option when a team is already at capacity or has little or none of the experience needed to complete the project. A strong outsourcing partner can help your team meet tight deadlines and keep projects on track.
Assess your budget & strategic priorities
If you need to augment your team because it lacks the skills or bandwidth – or both – you must decide whether to hire in-house developers or outsource. Your budget and strategic priorities will help you determine the best choice for your company.
Hiring developers to fill skill and bandwidth gaps is feasible if you have a budget sufficient to cover recruiting and hiring new talent, as well as onboarding, training time, and oversight. In addition, new hires must fulfill strategic medium- or long-term company needs. You also need the appropriate management experience and skill to manage, develop, and evaluate those resources.
Hiring to fill gaps is a good option when the project is a core strategic initiative for your business and will require ongoing development or maintenance. In this case, you’ll want a dedicated resource who is fully enmeshed in your team and therefore, worth the investment.
Outsourcing is a good option for limited budgets, as well as projects linked to short-term initiatives or those that lack alignment with strategic priorities. In this case, a team of developers who can start immediately and require no investment for training or oversight can help reduce the budgetary burden and keep your team focused on strategic priorities. The extent of your outsourcing will depend on how many internal resources you assign to the project and the resulting budget restrictions.
- Fully outsourcing to an Offshore team offers the cheapest option. However, it also poses the greatest risk regarding team communication and alignment.
- Outsourcing to a Nearshore team enables closer communication and collaboration with your in-house team while maintaining some cost-saving benefits.
- Augmenting your team with Onshore developers with highly specialized skill sets is the best way to access those skill sets without investing in a full-time hire.
A strong outsourcing partner will work with you to find the best balance of cost, communication, and skill level. Options may include configuring a team with both Offshore and Nearshore resources – also known as Rightshoring – to leverage the benefits of both.
Decide whether to outsource
Once you have a clear project scope and have evaluated your team, timeline, and budget, you will have a better sense of whether your team can truly handle your project in-house, or if you need to hire or otherwise augment your team in some way.
If you are considering augmenting or fully outsourcing, this is the time to explore potential partners. The right partner will have a clear understanding of your project’s scope and requirements, and can help you determine the best way forward based on your needs, in terms of budget, timeline, and skills.
Choose your outsourcing partner
As you become better acquainted with potential outsourcing partners, you’ll begin to sense which one is the best fit for your project. You want a partner that feels like an extension of your team. They should have strong systems for oversight and communication to ensure your project’s success.
You need a partner who:
- Has experience with similar projects
- Has developers with the experience your project requires
- Has developers with direct experience with your tech stack
- Has a great reputation
- Is a good cultural fit for your organization
You want a partner that feels like an extension of your team. They should have strong systems for oversight and communication to ensure your project’s success. You can learn a lot about potential partners by discussing your project with them. Always request portfolios and references and be sure to vet each one fully. Once you select a partner, make sure you have a thorough contract. This is your chance to fully confirm each side’s understanding of project expectations, so take the time to review it thoroughly and thoughtfully, and ask questions if anything is unclear.
A strong contract will clearly state:
- The scope of the project
- Project deliverables
- Project benchmarks
- Project timeline
- Communication requirements
- Provisions for changes to any aspect of the scope
- Provisions for unexpected roadblocks
- Intellectual property agreements
- Confidentiality
- Clear and transparent cost structure
Make sure that every person in your company who will be involved in the project understands the scope and expectations.
10Pearls is here to help software development
With individualized software solutions, 10Pearls helps clients of all sizes and industries transform their business operations. Our outsourcing models and engagement options let you pick what’s right for you. We have a worldwide network of top tech talent, so we can provide support and development 24/7. Thanks to our collaborative culture, you’ll be able to communicate efficiently and effectively with your internal teams.
Outsourcing to 10Pearls comes with these benefits:
- Cost and operational efficiency: Using Rightshoring and agile CI/CD development, we keep your project costs low and maximize your operational efficiency.
- Innovation: We hire top global talent with expertise in artificial intelligence, machine learning, the Internet of Things, edge computing, cloud-native development, and other emerging tech.
- Fast delivery: Your product can reach the market faster with our global reach and efficient practices.
- Collaboration: We reduce silos and streamline communication by using transparent development practices.
Get in touch with us
