© 2023 Tino Digital Agency

Web Dev

Outsourcing vs. In-House in Web Development: Which is Preferable for Your Business?

Max Kardasevich
Max Kardasevich
April 16, 2021

There is a dispute fiercer than Gulliver’s confrontation between pointed and blunt points. It starts with the question, “How do you get the most out of your web design?” Try to ask it at an industry conference, and you will hear two opposite opinions: “100% outsource” / “Unambiguously trust the team in-house.” We could not resist and also enter the battle. Every organization that connects its activities with a website or web service comes to the same question: What is more profitable – creating an internal IT department or hiring outsourcing developers? There is no definite answer to this question; each approach has its pros and cons. And here is our vision.

Recruiting and hiring employees

Ask a familiar HR officer, and most likely, he will say that finding specialists in IT, and in web development, in particular, is not an easy task. Experienced professionals either already work full-time or cost a lot of money. You can hire young or inexperienced specialists, but there are no guarantees that they will not leave for a more lucrative place, barely gaining experience. The selection of programmers, designers, and layout designers is a long and dreary process. It can include checking test items, interviews, forming proposals, and waiting for answers, which can drag on for months or even years. Obviously, when hiring a ready-made team, this problem completely disappears, and you will not have to deal with personnel issues. There remains only a question of choosing the team itself.

Team building and motivation

It is not enough to hire people. You also need to form a working team out them. Conflict situations are inevitable in work processes, which quickly develop into hostility, affecting the quality of work. Most likely, the IT department will bring together people of different ages, both sexes, and indeed – completely different characters. As a result, the head of the department’s tasks will be not only technical but also psychological in nature: to find the keys to each employee, limit the communication of poorly compatible people, and extinguish all the most minor conflicts at the root.

The issue of salaries and motivations is also quite relevant. Someone is ready to work efficiently on a salary. Someone needs plans, over fulfillment of projects, and bonuses. One way or another, a delicate monetary issue will have to be resolved with each specialist. In the case of outsourcing a development team, these issues also remain on its leader. The discussion of payment takes place within providing specific services under a contract, most likely with one person.

Staff training

There are no absolute specialists in all matters, especially in the IT field. Knowledge becomes obsolete in a matter of weeks. Each programmer is in a constant process of obtaining additional information and expertise. The training of an employee in the state is carried out at the expense of working time, that is, at the employer’s cost. Training in an outsourcing team is laid in standard hours only if necessary to introduce a unique new technology or switch to new software versions. Simultaneously, it is pretty likely that a specialist working in a team on projects of various types has already faced a similar task and knows how to solve it, so there is no need to waste time on training.

Accounting department

HR accounting is a complex task. This calculates salaries and bonuses, vacations and sick leaves, deductions to funds, taxes. This is an extract of accounting certificates, signatures of statements, orders, safety logs, and many not very useful but obligatory papers. When the staff grows, a separate accountant has to be allocated for personnel management, increasing costs. The web development team will independently resolve all issues with personnel accounting within the framework of their company’s work. The customer only has to draw up standard service contracts and formalize work with ordinary acts.

Operating expenses

The activities of the IT department are associated with high operational costs. This is the rent of a separate office, the purchase and maintenance of computers in working order, a good Internet connection, preferably from several providers, the very same coffee cookies, the cost of corporate events, and other minor expenses. Absolutely all these costs are borne by the outsourcing team. When calculating the benefits, do not forget about this considerable share of the costs.

Trade secrets

The spy war in the IT business began at the very dawn of the industry. Information security of companies has long been no longer a luxury but a basic necessity. They can steal both a simple idea and a ready-made customer base or even the whole product. In the case of a full-time development department, the company is better protected by the law. 

In addition to agreements on non-disclosure of trade secrets, the employer is automatically protected by the law. All the fruits of the employee’s work at the workplace automatically become the employer’s intellectual property. On the other hand, this right still has to be defended in court. In any case, it is easier to organize protection against data leaks on your own territory than on someone else’s.

On the other hand, when concluding a contractual relationship with an outsourcing production company, an additional non-disclosure agreement (NDA) is usually completed, which clearly sets out the parties’ responsibilities. Although tough sanctions are a good incentive for observing trade secrets, excessively high requirements can scare off the contractor.

Performance control

It would seem that it is easier to control your own department than a third-party firm. Put the software, set up cameras, and watch. On the other hand, you also need to either spend your time on this or allocate the time to another employee. And who will guard the watchmen? The only thing that needs to be controlled in the work of the outsourcing team of developers is the work’s timing. If the work is progressing on schedule or not very much, it is not so important how they do it and which projects they do more or which less. The main thing is that there is a result, and the “process” can be left alone.

In-house development department: Pros and Cons

Control over the entire situationComplex personnel issues
Easier to protect labor results Harder to keep books
Faster response times to tasks, especially small and urgent onesHigher operating costs
More straightforward way to scale the department in case of rapid project growth High costs of specialists’ salaries
Possibility of self-optimization of processes Possible problems in employee compatibility
Long organization of the work process “from scratch”

Usually, only large organizations open their own development department. The disadvantages associated with costs do not exceed the advantages of controlling the situation. Suppose a sizeable offline business wants to go online and is not afraid of significant investments in a website or other web services. In that case, this choice will eventually become the optimal one.

Outsourcing development team: Pros and Cons 

Significantly lower operating costsNo possibility to interfere with established processes
No problems with recruitingResponse time to tasks can be
No need to retrain employees
Working in one window – all communication through a manager who sets tasks for specialists The necessity to choose a good team
The work will begin from the first day – all specialists are ready, and the processes are established
No continuous salary costs

A ready-assembled team is the best way to accomplish the result swiftly and affordably. Companies that cannot yet afford to employ several employees and spend time on selection and training are primarily used by companies. Suppose the result is needed as quickly as possible, or budget savings are essential. In that case, a hired outsourcing team is the best choice. But do not forget about the triple constraint: there is a work speed, there is a cost, and there is quality. Choose the team wisely to get all three, not two out of three.

Outsourcing + In-house

Many companies also use a mixed-method: for example, they hire PHP programmers and layout designers for outsourcing, and the designer is kept on the staff because he is also needed for other work (design of labels, offline advertising, etc.). Or vice versa, the programmers are their own. Still, several designers are needed to draw illustrations and copywriters to fill the project with texts. Different possibilities determine different needs.

Working with Tino Agency: Our team cooperates with many organizations and business entities and performs all types of work – from developing new sites and services from scratch to technical support for existing projects and customized concept design. We can take on any project entirely or strengthen your team with specialists of different profiles. Together we will develop an optimal work plan to fit all your business needs and aesthetic vision.