Why do People Outsource?

Throughout our years of operation, we have had the opportunity to help many different clients realise the software components of their business goals. As one can imagine, to reach the position that we find ourselves in today, we have had to make our way through the process of approaching potential client’s more times than we could hope to keep count of. However, one thing that has continued to stand out is the repetition of a single phrase, ‘We have an internal team so we will never need to outsource’.

While the preference for many organisations will be to keep development work within internal teams, we know from experience that there are times when external assistance may need to be considered. So now this begs the question, what are the reasons that could drive an organisation to outsource a development?

For the most part, we have found that the answers to this question fall into one of two categories:

Lack of Internal Resources

Resource limitations are a big driving factor behind many organisations deciding to reach out for additional help. It may be that all existing teams are already tied up with the delivery of tasks that are equal or even greater in terms of priority. Maybe your team is too small in number to deal with a brief but rapid increase in demand, or a tight deadline will not provide you with the opportunity to bring in additional resources to meet the required demand.

Lack of Expertise

Maybe you have access to a suitable quantity of bodies but have found yourself facing a gap in the knowledge of key skills or experiences with a specific technique. Alternatively, a project may end up forcing internal specialists to complete work away from where they would give the most value, and having an external resource to provide the groundwork would help improve efficiency.

But why would I choose to outsource over other options such as contracting?

Of course, outsourcing is only one option out of many. Contracting has historically been a popular approach for dealing with many of the issues we have highlighted above, the foremost reason being the perceived lower cost. So why would an organisation decide to outsource over this alternative?

Scaling is easier when outsourcing

A big issue with contracting is that for each new body you bring onto a project, you face fundamental yet troublesome problems such as the availability of office space and key hardware and the overhead of management. By making the decision to outsource, this responsibility will be shifted onto your selected outsourcing partner.

There is a consistency in approaches to development

A notable risk of bringing in significant quantities of independent contractors is the potential for inconsistencies in development approaches. While coding standards will help to manage this risk, you will be bringing in individuals who have their own unique approaches and preferences in how they work. By reaching out to an outsourcing partner, you should be able to place trust in the fact that they will expect a level of quality from their employees, which will help ensure consistency in their approach to development. Not to mention that quality assurance processes should be in place to ensure that this is the case.

You gain access to a diverse skill set across multiple IT disciplines

While contracting will limit you to the experience of a single person, when you outsource you gain the knowledge and expertise of a team. Just because a particular individual hasn’t been offered as a resource for your project doesn’t mean that they will not offer their advice or insights to those who are.

Outsourcing offers ready access to a team of people with the capacity to share knowledge and train other team members. So should one engineer become unavailable, there will already be another capable of filling this space, and the overhead of doing is this is born by the supplier not by the client as is the case when a contractor leaves.

It can be a cost-effective way to manage spikes in demand

When taken at face value, contracting can certainly seem more appealing in terms of costs. However, in cases where time would be wasted on familiarisation to bring in new contractors, outsourcing really begins to come into its own. Companies like Zircon are well placed to, collate key project experience and information into a knowledge base to aid the onboarding of new employees, as well as take the impact of staff movement within project teams away from your organisation.

There is also value in highlighting the fact that the cost-effectiveness of outsourcing only continues to increase as resource numbers continue to grow. While individual contractors attract a cost for the time spent getting up to speed, this cost is often reduced for an outsourced team as it tends to be carried by the supplier.

You gain a weapon to battle the headache that is management

By opening up a relationship with an outsourcing partner, you gain the opportunity to relieve yourself of the responsibility of the day to day management. It will be up to your chosen company to ensure progress is maintained, in turn allowing more time for key business activities.

Of course, even in the face of all these benefits, there is very little point in outsourcing a piece of work if you will be spending four out of seven work hours communicating with your outsource partner.