In light of recent events (Covid-19, the rise of remote work, economic downturn, project closures, and mass layoffs), the outsourcing of IT services is gaining momentum. And for aspiring developers from countries known as "outsourcing hubs", companies of this business type may now be the most attractive option to start a career in IT. However, it's worth noting that working in the outsourcing sphere has both its advantages and disadvantages.
To provide you with a full understanding of the "joys and challenges" in different types of companies, we're shedding light on working in product-based and outsourcing IT companies. Hopefully, this article will help you decide which path holds more promise for your needs.
What Is an In-house Team?
An in-house team of developers is a group of specialists who work in a team and are directly employed by some organization. Unlike outsourcing, where tasks are delegated to external parties, an in-house team works exclusively for the company to which they are employed.
The main benefits for developers working in-house include:
Clear policy. In-house developers have a deep understanding of the company's goals, vision, and culture. They also often work closely with other teams and departments within a company, which results in better communication and alignment with the overall project objectives. Hence, better control over the development process and decision-making.
Stability. As a rule, in-house teams work on long-term projects that span multiple stages of development. This stability allows developers to delve deeper into the project and build expertise in specific technologies.
Greater client interaction. In-house developers usually have direct contact with clients, allowing them to better understand user needs and incorporate customer requirements more effectively.
When it comes to disadvantages, the most common ones are:
Lack of external projects. In-house developers typically work on projects within their organization only, which may limit their exposure to different industries, technologies, and development approaches.
Limited skill set. From the above point, it's easy to conclude that in-house developers have fewer opportunities to expand their skill set beyond the technologies common to their organization.
Heavy workloads. In-house developers may be prone to project overload since they are solely responsible for critical projects. The result? Increased stress levels and no work-life balance.
Resource limits. In-house teams can be subjected to such limitations as tight budgets and restricted access to specialized talent, which may lead to the team's disability to quickly scale up or access expertise in emerging technologies. In addition, in-house developers should often adhere to the organization's standards and procedures, which sometimes limit flexibility and creativity.
What is Outsourcing?
Outsourcing is the process when a company attracts a remote team and delegates certain projects to it. In the area of IT, such projects may include the creation of a mobile or web app, software development, product design, business analytics, etc.
For example, if a restaurant wants to make a website or appropriate app, its owners aren't likely to hire an in-house team of developers to do that. The best option is to hire an outsourcing development agency to conduct the full development cycle from A to Z.
Outsourcing gained popularity even before Covid-19, but afterward, it became a huge trend: remote hiring become an integral part of almost all companies across the globe. And the global market size of outsourcing services is expected to further expand and grow up to US$904.948 billion in 2027. What's the catch? Outsourcing offers numerous advantages to enterprises of any size. Namely, outsourcing offers greater control, over 50% reduction in the development cost, and complete consistency in the development workflow owing to the dedicated talents.
3C benefits – Control, Cost, and Consistency
Besides that, outsourcing gives access to the broader talent pool, thus, helping companies to keep up with competitors. Also, outsourcing wins in terms of a quick and flexible workforce, which can become a rescue in case of an emergency project. Outside specialists are ready to dive into work within the shortest time possible.
Well, what about developers working in outsourcing teams? What benefits do they get?
The benefits of working in an outsourcing team
Diversity of projects. Developers in outsourcing teams have the opportunity to work on a variety of projects. This exposure to diverse projects and technologies can expand their skill set and provide valuable experiences. Plus, if you like non-boring tasks, you may always stay challenged with new interesting projects.
Access to expertise. Working in an outsourcing team allows developers to collaborate with experts in various fields. They can learn from experienced professionals, acquire domain-specific knowledge, and gain exposure to industry best practices.
Professional growth. You can climb the career ladder as fast (if not faster) as working in-house. As outsourced developers often have the chance to work on complex projects, they can enhance their portfolio and improve their technical proficiency. Now, it's all about the experience!
Knowledge boost. In outsourcing teams, developers often work with other talented professionals, which encourages knowledge sharing, teamwork, and the opportunity to exchange ideas and approaches.
Yet, there are also some disadvantages of being a developer in an outsourcing team. For example, if you're working on an international project, there may be communication/language barriers and cultural/workstyle differences. Also, you may experience a lack of direct client interaction and, therefore, miscommunication.
Last but not least, job security in outsourcing teams can be influenced by project availability, client demands, and the overall performance of the outsourcing company.
Why Businesses Prefer Outsourcing
As already mentioned, there are many reasons for companies to look for IT talent outside their organizations. Outsourcing offers various potential benefits, including scalability, cost-effectiveness, access to expertise, and enhanced operational efficiency.
What types of companies typically prefer outsourcing to in-house teams?
Virtually any type of company can refer to outsourcing services, yet some organizations can especially benefit from hiring outsourcing development teams.
Startups often have limited resources and need to focus on their core competencies, such as product development, market penetration, and customer acquisition. Outsourcing development allows startups to leverage external expertise and quickly build their product without the need for extensive in-house teams. Now, you can even find dedicated startup software development companies that help "fresh” businesses achieve success faster and with minimum cost spent.
Existing businesses that are launching a new product and don't want to immediately expand their development team. Such companies believe it's better to "buy the service" rather than spend time and money on extending their team.
Small and medium-sized enterprises may opt for outsourcing development teams to access specialized skills and technical knowledge that may not be available internally. It provides them with cost-effective solutions for specific projects or tasks without the need to maintain a large permanent workforce.
Companies with limited IT expertise. Industries that are not technology-focused, such as manufacturing, healthcare, or finance, may lack the in-house expertise to handle complex software development projects. Outsourcing development teams allow them to tap into the specialized skills and experience of external professionals.
Companies with tight deadlines. Organizations that have urgent projects may choose outsourcing development teams to expedite the delivery process. Outsourcing teams can ramp up quickly, providing the necessary expertise to meet project timelines efficiently.
Companies with limited budgets. Outsourcing development teams can be a cost-effective option for companies that want to reduce their operational expenses. They can avoid the costs associated with hiring, training, and maintaining a large in-house development team.
Companies seeking scalability. Businesses that experience fluctuating demand or have projects with varying resource requirements may find it more efficient to turn to outsourcing. They can easily adjust the team size or engage additional resources as needed without long-term commitments.
Companies looking for global talent. Companies looking for diverse perspectives, expertise in specific technologies, or access to a broader range of skills also prefer outsourcing to in-house teams.
What Skills Do You Need to Possess to Become a Part of an Outsourcing Development Team?
To become part of an outsourced development team, some skills can be especially valuable. Among the most sought-after skills, we can highlight:
Technical expertise
A strong foundation in programming languages, frameworks, and technologies relevant to the project is essential. Naturally, these technologies vary from project to project. For example, startups and new businesses usually turn to outsourcing for web development purposes. For example, a popular pool is "niche" tasks like creating a website using WordPress or other platforms. So, no wonder you can come across top WordPress development companies that provide reliable solutions for "newbies". In this case, you'll need to familiarize yourself with WordPress and HTML, CSS, PHP, and JavaScript.
Problem-solving and analytical skills
No matter the technology you're going to focus on, be ready to encounter complex challenges that require problem-solving abilities and analytical thinking. So, you should be able to break down problems, analyze different options, and propose effective solutions.
Communication
Good communication skills are crucial when working in a distributed team. The ability to effectively communicate ideas, provide updates, and collaborate with team members (both locally and remotely) is essential for successful project execution.
Learning agility
Outsourcing teams often work on a variety of projects, technologies, and domains. The ability to quickly learn new concepts and technologies allows developers to easily adjust to different project requirements.
Time management
Meeting deadlines and delivering high-quality work within set timeframes is vital in an outsourced development environment. Effective time management, prioritization, and organization skills are essential to ensure project success.
Quality assurance
Knowing software testing methodologies and quality assurance practices is valuable too.
Familiarity with remote collaboration tools
As an outsource developer, you'll need to work with project management systems like Jira and Trello, version control systems like Git and SVN, communication platforms like Slack and Microsoft Teams, and virtual meeting tools like Zoom and Google Meet.
It's important to note that the specific skill set required may vary depending on the project's nature, industry, and technology stack. Therefore, staying updated with the latest industry trends and continuously improving your technical and soft skills is crucial for success in an outsourced development team.
Conclusion
To work in-house or outsource — which option is better? This is the acute question facing many developers these days. Yet, the answer is not black and white.
Working in an in-house team offers benefits such as clear organizational structure, stability through long-term projects, and direct client interaction. However, it may limit exposure to diverse projects, technologies, and industries. Furthermore, in-house developers may face heavy workloads and resource limitations.
On the other hand, outsourcing provides advantages such as access to a diverse range of projects, expertise from specialists in various fields, and opportunities for professional growth. It offers flexibility, quick access to a talented workforce, and cost-effectiveness. So, if you're not afraid of communication barriers and cultural differences, we see no reason to set "in-house" limits for yourself!
