Outsourcing versus In-house – a picture of the market in a pandemic era

Having an ambitious, talented team of programmers is very tempting for almost every company – in terms of accessibility, communication and prestige. The problem, as in many other cases, can be money. Creating your own team of IT professionals is not a cheap undertaking. In many cases it is much more profitable to resort to outsourcing. 

In-house, that is everyone on board

We talk about in-house (also known as insourcing) when all the professionals required for a specific process are employed in our company. We have them at our disposal and at any time we can gather them in a conference room or visit the department they occupy. These are people who know the company from the lining, and thus its specifics and requirements.

The great benefit of creating your development team is full control over a group of committed and loyal professionals, focused exclusively on the development of your company. Knowledge of the company’s philosophy, and therefore cultural fit to it, is a great advantage in-house. What’s more, an in-house employee who got his or her job on the road of the – often tedious – recruitment process can be emotionally involved in the tasks assigned to him or her. Working with colleagues also means ease of interaction and less risk of miscommunication. This is especially helpful when it comes to sudden, unexpected corrections and changes in the project.

All of this sounds wonderful, but if in-house was a panacea for all ailments, we wouldn’t see so much popularity for outsourcing today. So what’s wrong? In what categories does having your own team of professionals not work?

What’s wrong?

The problem usually arises where the conversation about money begins. As we have already mentioned, maintaining an internal team costs money – and it’s not bad. Creating jobs and infrastructure for employees, implementing new people and training – all of this has its price. The bigger the number of employees, the bigger the long-term investment. Another problematic issue is time. Before a specialist takes his or her position in the company, he or she has to be found. Publishing a job offer, collecting applications, selecting candidates for interviews, holding meetings and making an informed decision is often a very long process. Because, let’s not charm ourselves, we don’t always manage to hunt a real magician in our profession.

The last issue is related to the limited talent pool. A company that has an ironclad team of programmers – no matter how great it would be – is bound only to them! It is then difficult to talk about the possibility of going beyond the conventional, finding unusual solutions in unexpected places and thinking “out of the box”.

Pandemic and the outsourcing boom

The use of external companies is not a novelty in the IT industry. In recent years we have begun to trust and appreciate more strongly the support of companies providing such services. The report prepared by the editors of the New Outcourcing portal states that last year’s global outsourcing market reached 92.5 billion dollars, 6.9 billion more than in 2018. In turn, according to data presented at the beginning of 2020 by NTT, by 2022, more than 45% of organizations plan to increase their budgets for outsourcing IT services. Companies with more than 50 employees are most likely to decide on this form of collaboration.  

Not without influence on this jump in popularity of outsourcing is the coronavirus pandemic. Lockdown has forced many companies to reorganize their work, and thus reduce contact with business partners and switch to remote work. Moreover, there was no time for long days filled with meetings and debates – you had to act quickly and effectively. Many companies coped with this perfectly thanks to the IT infrastructure under the supervision of external IT companies. In their case, adapting to new realities and quick transition to home office was not so painful.

Outsourcing, or talent diversification

To make sure that work from home runs smoothly and without major disruption, companies around the world have begun to appreciate the knowledge of IT professionals. With multiple potential partners to choose from, you no longer have to rely on one team. Today, the strength lies in the selection of specialists who are best suited for specific tasks.

No interviews, no workstation equipment or high salaries, but unlimited access to talent scattered around the world for a fixed amount – these are the main advantages of outsourcing.

By delegating part of the duties to external specialists, the entrepreneur has a chance to fully concentrate on the basic activities necessary for the functioning and development of his company. What if the work of an external team does not meet the client’s expectations? Well, then you can always look for new heros. In case of in-house, it is much more difficult.

Outsourcing is an optimal solution for startups, providing them with support of talented, experienced specialists without additional investments. Larger companies will also benefit from it by dressing up among international professionals without having to move from one place to another.

Unconvinced? An alternative option may be an in-house connection with outsourcing. Such a solution means strengthening the internal team with talents that for various reasons we have not been able to employ in the company. They will support the knowledge and experience of full-time programmers, infecting them with new ideas and pulling them out of the box. However, everything depends on the analysis of actual needs and possibilities.

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