Outsourcing Product Development : Pain or Gain?

Outsourcing Product Development

Fast growing Tech companies are always faced with the dilemma of in-house vs. outsourced software development. Challenges to scale product/ technology can be real; lack of technology skill set within the firm, lack of talent pool in the market, cost of hiring software engineers, managing a technology team, in-house development resources encapsulated by day to day firefighting etc. Outsourcing to an external vendor can also be challenging; how to pick the right vendor, keep IP secure, risk of over budgeting, trusting someone else with your product, lack of control etc.

From our experience there seems to be no right answer as every situation seems to be different and can only apply to the specific company’s needs.  For every successful project outsourced there are more horror stories. With the ability to find freelance developers offshore that can work at one-fifth (sometimes less) the cost of onshore or in-house developers many especially young companies have burnt time and money.

What’s the first step to evaluate such a decision?

Speak to peers in the community who have outsourced and analyze what pros/ cons might apply to you. Also, interviewing multiple vendors to collect information about their domain expertise, delivery model and pricing can be a useful benchmark to have even if you develop in-house. Certain things should be kept in mind while going for outsourcing, choosing the right outsourcing partner is the most important one.  A good outsourcing resource can deliver convenience, efficiency and best cost solutions to your developing problems. There are always some knowledge gaps in a team; one can be good in management and other in HR. Or you can even have a product wiz on your hand but still there are always some knowledge gaps within the ecosystem of a startup, so they should be filled-in intelligently with outside help. To outsource doesn’t mean that you are just getting rid of the development phase; it means that you are ensuring that it’s in the best hand with your approval and directions.  

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