Outsourcing vs in-house team: key points for e-commerce business development

The Digital epoch brought new challenges to the business owners. To stay successful, they need to apply on-line technologies alongside the traditional means of advertisement and communication with customers. Often such renovation requires the introduction of a web site, a platform, or even the creation of a standing alone digital product.

In this situation your business faces a crucial choice…to who do I accredit the development to of the product defining our future stability? A big and important question indeed. Basically, there are two ways to resolve this question, either to build an in-house team or outsource the development. Find the pros and cons of each of these options in our article.

The first option that springs to mind for you may be to build your own team of developers.

The general team organization process often involves numerous stages. For a business this means the necessity to spend time on the auxiliary processes. An absence of these processes can result in the non-proper functioning of the team. 

The process of a team composition includes the following:

Recruiting and hiring of employees

This step can take from several days to several months. Especially if you are searching for a skilled operator. Considering the general overrun of the offers on the HR market, the companies often try to lure professionals from other companies. 

Operating expenses

You will probably have to pay for office premises, it’s utility bills, don’t forget, the more people you employ the more these bills are likely to be. Also, no one can perform their professional duties with just any old tools. For example the coders, coders require fast computers, servers, and other important often expensive equipment. 

Motivation and teambuilding

A leader should motivate and show the direction the team should be working towards. Without proper motivation, staff rarely operate at their optimum levels and this often leads to losing focus. Teambuilding is one additional thing crucial for staff efficiency, though this can require a lot of precious time.

Staff training

The world of IT changes continuously and rapidly so, to stay up to date, all staff should undergo constant training and re training. Sometimes theoretical training is not enough without practical and real-life situations. Under any given conditions, anything can happen, and the ability of coders to overcome sudden unexpected problems shows their competency or lack of. 

Accounting and taxes

A business owner building their team should also think about accounting. In some countries, this task is not so complicated, though in others it often requires specialist accounting skills and trained personnel who oversee these tasks.

Taking into account the above concerning the common processes of the team formation, we can move to the pros and cons of any in-house team composition. 

The advantages:

  • The ability to appoint the team yourself. 

You are the person who shapes the team working with your project. All success stories, as well as failures will be down to the choices you make. Decide who you want and need to perform any particular tasks for each stage. 

  • It is easier to scale the department in the event of a need for expansion. 

When you know the people on a personally that you are working with, it is much easier to grade and rate their skills. They are more likely to remained focussed on the business aims when you are overseeing their progress regularly. 

  • Having full control over the implementation of the project.

The project and its ultimate aim depend hugely on your vision. You mitigate the risks for any business losses and ideas shortage. 

The disadvantages:

  • Difficulty in hiring and training employees.

As we had mentioned above, the process of the company’s resources management, including staff, can take great pains and time. 

  • High operating costs.

When you build your team you should expect expenditure towards the hiring of office premises, resource consumption, digital means application. That is only the basic requirements which will probably be a regular feature, probably on a monthly basis You may even opt for more comfortable work surroundings with additional features to keep your team happy and productive. All at additional cost to you of course.

  • Possible problems in the team.

Numerous problems can appear unexpectedly within the team that could influence their work quality and productivity.  One of the most common reason for problems of this kind is the incompatibility of employees. Instead of supplementing each other, team members can become almost toxic and bring a shattering impact to the general workflow. Personalities may clash with disharmony a consequence.  

  • Complicated bookkeeping.

Having assembled your team you should personally perform all calculations related to the staff. Social security calculations, compensational calculations, liability insurance, healthcare costs, vacation costs etc. These are only the tip of the iceberg when it comes to calculations, They represent expenditure that should be performed to deal with the team in the legal realm. And that all is without mentioning the local requirements of legal systems of different countries. 

  • High duration of the command launch procedure.

Before you can initialise any work with the team several other steps should be completed.  For instance educational activities, acquaintance with the company’s values and policies takes time for any business. Establishment of inner processes and procedures, their testing and adjustment can take even more time. 

These pros and cons shape the conditions every business will face while building the in-house team for digital product development. Now let’s turn our attention to another option, the offshore teams that are available. What are the options, pro’s and con’s here? 

The advantages:

  • All communication is performed through a manager who sets tasks for specialists.

You have communication with the only person who knows everything about the project. The project managers are people bear the overall responsibility for the distribution of tasks among the team of developers, designers, and analysts. They serve as mediators in the orchestra to get the best results on the product launch.

  • No need to retrain employees.

Having no staff working for you means that there is no one to keep training and spending additional time and money. All you need is to demand a sufficient level of knowledge from the team dealing with the project. 

  • The work will begin from day one – all specialists are ready, and the processes are established. 

When entrusting the project to outsourcing, you literally hire the ready-made team. They do not need to start from the very beginning with business processes and their adjustment. After stating all deadlines within a signed contract, these external teams are ready to start with the development ASAP. 

  • Significantly lower operating costs.

When you do not need to pay for all office expenses, the cost of the developments becomes much lower. Though the cost of such services includes the expenses of the outsource team, such teams often include other teams, and as the result, the overall office expenses are distributed among several businesses. 

Now for the disadvantages:

  • Difficult to control the process.

When your team is thousands of kilometers away your control over the performing the tasks becomes a bit complicated. You need to specify the reporting processes and track how they are performed. In case the team is too far away, and the time zones differ greatly, it can be difficult to communicate and discuss some crucial moments. You will have to use mailing or adjust your daily routine to early morning or evening calls. 

  • Tasks may take longer to complete. 

The previous disadvantage defines this one. As communication can take more time, the discussion of all possible corrections takes more time as well. 

  • It is difficult to choose a really good team among a large number of proposals. 

Many offshore teams are very similar to each other like two pea’s in a pod. Sometimes it can be really difficult to differentiate between them on a skill’s level.  

How to find a good outsourcing company in the modern market of IT services 

To find good performers you need to follow several steps:

  1. Determine the main search channels, exchanges or remote work platforms, google search, social media.
  2. Determine the main selection criteria: is a narrow, more focused field specialist or maybe a broader skilled specialist needed? How much do you envisage paying for this service? What you wish to get from this product?  And so on. 
  3. Determine how you would like to be involved, how willing you are to get “hands on” in the process?
  4. Clearly formulate the tasks, describe the terms of reference for the team (perhaps prepare a test task for candidates).
  5. Find out what you want to see as the result and what will determine its success. Calculate possible directions of development and what features should be included in MVP and which shall be omitted for later. 

What type of team of developers to choose depends on the goals of each particular business. Though, the general recommendation is to plan according to the initial budget and the functional scope intended.

Having defined the goals you can contaсt us anytime and our team will empower yours. Sharing the experience can bring new heights.

EVNE Developers - IT service company that provides Impressive Experience in the development of web and mobile products worldwide. We help people build better software without losses.

Write A Comment