When is Outsourcing a good idea?
When should a company should outsource application development? Our project management and custom development
solutions at Knowa.com are a perfect solution for companies looking to outsource custom development of web
applications and websites. But is it really a good idea to outsource large, long-running development
projects rather than staffing up internally? Here are some thoughts:
Outsourcing offers several clear advantages:
- No hiring/onboarding necessary. This is important because recruiting/hiring is an expensive proposition and a long-term commitment. A company can potentially save money by outsourcing if the project is sufficiently short by avoiding recruiting costs and avoiding down-time for full-time staff when there's not an expectation of continuing need.
- Opportunity to gain access to specific skills/knowledge. Training existing employees could be more expensive and time consuming than hiring a consultant that already has the desired skills.
- Assumption of risk. If the contract is structured in a way where a consulting company is penalized financially if the project is delayed or missing expected functionality, some of the risk of a development project is transferred to the consulting partner.
So what happens if the project is longer and transfer of risk is not important to the client? Is there a conflict of interest for a technology consultant between his/her employer's desire for continued long-term business and the customer's desire for a quality product at the lowest cost? The answer is yes, in some cases there might be. Traditionally, outsourcing application development is more expensive on its face than developing an application with available internal staff because the consulting company is in the business of making a profit. But, with Knowa, the cost of development is probably less than inhouse because of our offshore connections.
So, is there a trade-off between cost and quality?
No! With Knowa, you get a highly functional team and superior development practices that produce a higher quality product in less time. Even though the cost per hour is less, the actual cost and total cost of ownership are also dramatically decreased because of speed to market and total quality management.
That sounds great! Except wouldn't it be even better if the customer made THEIR staff highly functional and incorporated those superior practices into THEIR organization so they can produce all of their software with our efficiency and less cost using staff that already has the necessary domain knowledge? In most cases it probably would, if delivery of the particular application in question is not extremely time-sensitive (the transition, of course, doesn't happen over night).
To be a full-service consultancy and a quality partner to its clients, Knowa offers training, mentoring, and outsourced application development and our corporate values state that we're always happy to work ourselves out of a job.