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Published On: Tue, Feb 27th, 2018

In-house Team vs Remote Team: Is Outsourcing a Viable Option?

Many great products were built by outsourced teams: The list of companies successfully utilizing this approach includes some world-known names. However, can we claim that a remote team can be as reliable as your in-house workers? Of course, not. Both options have their pros and cons, and neither of them is a silver bullet approach to handling software development most effectively.

photo: photologue_np via Flickr

To help you make the right choice with your next project, let’s compare the process of software development when working with an in-house team and with an outsourced one. So, let’s address the most common arguments against outsourcing and explain the differences between both options.

1. Communication

From articulating the initial requirements to internal day-to-day interactions within your team, communication is an ongoing process which has a strong influence on the outcomes. When it comes to the in-house vs remote team choice, many business owners are afraid that they won’t be able to communicate effectively with the team.

 

  • In-house team

 

Working side by side with your team, you can have a total control over the work of each of its members or over the progress in general. Thus, you will be able to solve all issues as soon as they arise.

On the other hand, most of the managers don’t strive for constant supervision simply because it might harm the team’s productivity.

 

  • Remote team

 

With a remote team, your communication will be limited to calls, messaging, and project management tools. While this might seem like too little, properly organized remote collaboration might in fact be much more efficient than endless in-person meetings. You won’t be distracted by the questions that may arise during the day: All issues will be discussed and solved during the call.

Despite certain inconveniences, you can still have personal meetings from time to time. You can visit your team at their location, set up regular business trips or organize employee exchange programs.

2. Management

Successful project management means much more than simply communication. It is an art and science of balancing the requirements and deadlines, solving all possible and impossible issues and making sure that the final product will meet or even exceed the expectations.

 

  • In-house team

 

With the in-house staff you can manage all processes by yourself and be in a full control of the situation if something unexpected happens. Yet, efficient software engineering project management requires solid technical background and relevant experience. To manage the engineering process effectively you’ll still need to invest in hiring the required talents.

 

  • Remote team

 

Hiring a remote team you will have to rely completely on the project manager, assigned by the company. To be able to keep up to date with the process and track the progress in real time, you can (and you should) take part in the process as a product owner.

In the meantime, you can focus on your core business and leave the software development to the specialists.

3. Team building

Often being overlooked by business owners, team building is very important in terms of keeping your staff motivated and engaged. Your staff should always work as a team, no matter if they work from the same room or from different continents.

 

  • In-house team

 

With on-sight staff, it’s traditionally easier to build collaboration skills and company’s culture. You can take an active part in this process personally or communicate closely with your HR team. By establishing friendly relationships within your team, you create favorable environment for your company growth.

  • Remote team

With an outside provider, team building typically depends on the outsourcing company’s existing rules, principles and culture. While dedicated team model offers more opportunities for establishing better relationships with your team, being geographically distant, there is still not much you can do in terms of team building.

4. Time flexibility

Often quoted as one of the drawbacks of outsourcing, time difference might be hard to get used to. Yet, there are still ways to turn it to your advantage.

 

  • In-house team

 

With the standard working hours, your in-house team is reliable and predictable. It is in sync with your own schedule and always in touch when you need it (at least in the business hours).

 

  • Remote team

 

Working in two time zones at the same time can be puzzling sometimes. You always need to sync your schedule with your team’s office hours and find a way to keep in touch without having skype calls in the middle of the night. It is hard, but it is doable.

On the bright side, you can allocate some tasks to different time zone to improve effectiveness. Thus, you can review the work your team has done while you were sleeping.

5. Office expenses

While you can operate a startup from your own room or even a garage, as soon as your company grows you will need to invest in a more suitable location to run your business from.

 

  • In-house team

 

With an in-house team you basically have no choice: You need an office space. This includes rent and facility expenses, to say the least. Moreover, as your team will continue to grow, you might soon face the need to move to a bigger office. And a bigger office means even more expenses.

 

  • Remote team

 

Thanks to outsourcing you can significantly reduce your administrative cost or forget about office expenses at all. Your outsourcing provider takes full responsibility for creating adequate working conditions for your team. If you decide to grow your team, you won’t need to worry about additional expenses either.

6. HR expenses

Even with a stellar team of experts you will eventually face the need to hire more staff or fire some of your team members.

 

  • In-house team

 

Running an in-house team you will have to handle all HR activities by yourself or find a professional to do the job for you. In both cases you will face the need to spend some of your precious resources on the process, be it your own time and effort, or HR services cost.

Among the benefits of such approach, you can personally evaluate the candidates and choose only the best experts.

 

  • Remote team

 

If you choose outsourcing, your provider will take care of all staffing activities. You don’t need to worry about hiring or firing people, the agency will make sure you have the agreed number of team members assigned to your project regardless of the circumstances. Moreover, you can always take part in the staffing process, reviewing the CVs or interviewing the candidates on skype.

This proves to be specifically important for startups: finding and hiring the right people might take months, not to mention onboarding and training. Thus, the expenses for finding and retaining the right candidates might be overwhelming for a startup.

Final Word

Offshore developers typically have lower rates than specialists from the USA or Western Europe. However, with a remote team you will need to invest more time and effort to set up proper management and collaboration processes and have a contingency budget to cover all the risks.

Thus, motivating the necessity to outsource by the price only is wrong. It’s better to look at all the benefits of outsourcing combined, such as flexibility, professionalism, quality and speed, hassle-free staffing and management.

Author: Mariia Aleksandrova

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  1. Top 5 Benefits of Building a Dedicated Development Team | The Global Dispatch | The Global Dispatch says:

    […] Back in 1995, IBM introduced the process of remote work. Thanks to the reorganization, the company was able to vacate 78 million square feet of office space. Now IBM has about 40% of employees at remote work. It should be taken as an example. Leading the dedicated development team you can hire dedicated programmers that will reduce costs to you. It will please remote software engineer also as there will be not necessary to spend remote software developer salary to get to the workplace, daily coffee, working lunch, etc. Basecamp founders Jason Fried and David Heinemeier Hansson in their book “Remote: Office Not Required” named offices as “interruption factories” as people in offices spend much time on small talks, time to get to the job, and other different interaction factors. More about comparing in-house work and remote developing you can read here. […]

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