In-house Hiring vs. IT Outsourcing: Is Software Development Offshoring Worth it?

Outsourcing software development is a well-established practice in the US and globally. Instead of hiring in-house employees, businesses often choose to hire service providers, agencies, or freelancers. There are numerous reasons for this, but also risks, which we will cover in this guide.

Why should you trust us? Euvic is a global software development company with offices around the world and talented professionals located in the US and Europe.

A few stats to demonstrate our expertise: we have over 15 years of experience, robust year-to-year growth, and industry knowledge gained from retaining over 5000 in-house software engineers, analysts, and consultants.

Outsourcing may not always be the best approach to execute your IT projects successfully. By reading this guide, you will learn all the ins and outs of it so you can make a decision.

Outsourcing Does Not Always Imply Offshoring

If you’re from the US and came across this guide, you might be considering outsourcing to save costs. This generally involves hiring software developers from countries with cheaper labor costs, such as India, the Philippines, or Ukraine. However, before we dive into the differences between popular countries for IT outsourcing, we should first define what outsourcing means.

Outsourcing can also refer to hiring another US-based company, such as a software development house or agency, to leverage its network of knowledge, resources, and experience.

This is generally a proven strategy for executing one-off projects, improving the speed of execution, saving costs, or buying into someone’s existing expertise instead of investing to figure it out on your own. There is no right or wrong answer as to whether outsourcing is the right solution for you, but we’ll explore this further down below.

It’s important to distinguish between outsourcing to managed teams and outsourcing to augmented staff. At Euvic, we offer fully managed teams with a dedicated project manager who ensures accountability. Compared to managing or leasing developers on your own, using managed teams can accelerate development, improve overall quality, and integrate their accumulated knowledge into your project requirements.

General Mindset and Philosophies About Outsourcing vs. In-house Hiring

We would like to provide you with some perspective on the different philosophies and personality types behind Owners or CEOs and how they are connected to the decision to outsource before discussing the pros and cons.

Outsourcing work always involves trusting someone else with your time, insights, and money, and some people do not like the idea of that concept. Many companies struggle to execute their projects, go live, or go to market with them because they stick to their “100% in-house” policy.

The major reason for this is simply some people’s mindset and philosophy. Protecting knowledge and building an outside barrier around the company to protect oneself was important many decades ago. However, what worked 60 years ago is not necessarily needed to stay competitive in a hyper-fast-moving business environment today.

People who decide to outsource are usually more open to taking a calculated risk and trusting a service provider with their insights, data, time, and budget.

It often enables them to buy into knowledge that would have taken them a decade to acquire themselves. Even when hiring experienced professionals from big companies, it does not mean they bring in the knowledge needed to successfully execute a project. Often, they are just one piece of the puzzle.

Hiring a company that has done it before, multiple times, will speed up your execution by 10x, if not more. It could also help you figure out the best approach to reach your goals, based on their experience. That’s why hikers hire guides when they do adventure travel, so they don’t waste time and take unnecessary risks that can be avoided.

This is our perspective when it comes to outsourcing software development, especially when it comes to one-off projects, or repeatable projects that need scaleable execution.

Top 5 Benefits of Outsourcing Software Development Work

Outsourcing your software development needs has many benefits. Here are the top 5 benefits we have witnessed repeatedly:

• Easy communication with managers: Managing in-house staff or freelance contractors can be quite demanding as they often require your constant attention and detailed instructions for every task. However, outsourcing your software development to a specialized company can make things easier. At Euvic, we offer a unique solution by providing you with a US-based project manager who will be your main point of contact. This way, you get the best of both worlds – access to top-tier engineers and experienced project managers who just get you. Simply provide us with your project description and we will handle the rest internally.
• More flexibility, agility, and speed: Outsourcing your software development offers several benefits, including more flexibility, agility, and speed. It can help you quickly address the need for a new integration, web or smartphone application, or modernization of legacy systems. Hiring in-house developers may be impossible, as it could delay your project timeline.
• Full accountability: Delegating or outsourcing work, if done right, means finding a partner who takes on accountability. Great service providers make themselves accountable instead of relying on your input, taking weight off your shoulders and ensuring high-quality delivery. In-house teams, on the other hand, are often overwhelmed with handling multiple tasks and as a result, oftentimes simply can’t be held accountable.
• Feedback and experts to challenge your approach: Working with an experienced team can provide valuable feedback and help you challenge your approach. At Euvic, we leverage cross-pollination between more than 100 teams of experts in different fields to develop the best, most robust, and efficient solution for you.
• Access to the best technologies and tools: Outsourcing also gives you access to the best technologies and tools. An experienced partner like Euvic can suggest the most suitable solutions, giving you access to information you wouldn’t otherwise have.
• Proven experience: Partnering with a team of software development experts who have proven experience is the fastest way to success. You can ensure their experience by asking for proof of their past projects. Euvic has a team of local US-based experts and Polish A-player talent, building synergies to save you costs and provide unbeatable talent and quality.
• Cost saving: Depending on the nature of your project, its complexity, workload, and requirements, outsourcing can help you save costs, regardless of the destination you choose. The benefits of time-saving and getting the job done are invaluable. At Euvic, we can provide the right team composition for the job, so that you’re saving costs by only paying for the expertise and experience that you need to move the needle without sacrificing quality.

The Risks of Outsourcing IT Work & How to Mitigate Them

If outsourcing had only benefits and no downsides or risks at all, there would be no need for you to read this guide, and companies would not hire any in-house employees. Thus, outsourcing must have some risks associated with it.

Based on our experience and client feedback, outsourcing your IT and software development can also have negative consequences. We have compiled a list of the top risks associated with outsourcing that we would like to share with you.

1. Quality Issues Can Lead to Technical Problems or Even Bring a Project to a Complete Stop

• The risk: Outsourcing work has become common for those who require high-quality output for their projects or clients. Many of our clients approach us because they’re unhappy with the quality of work their current software development provider provides. This dissatisfaction is one of the primary reasons why companies switch and move their project to another outsourcing service.
• How to avoid it: It’s common for businesses to face a challenge while choosing the right IT partner. Almost every company claims to be the best in the industry, offering top-quality services and solutions that match your requirements. However, blindly trusting these promises can lead to fatal mistakes. Often, business owners admit to not doing proper due diligence while selecting an IT partner. They end up relying on recommendations through their network or trusting their instincts. Carefully analyze their client cases, assess the products and solutions they have implemented, review their client feedback, and most importantly, take your time. Another way to reduce risk would be to start with more minor, bite-sized projects. A technical due diligence assessment for existing applications helps you understand what a partner feels needs to be addressed with priorities and estimates. A workshop can help define requirements with more detailed estimates before starting any development work.

2. Meeting Deadlines: Delivering Quality + Speed is Always a Challenge

• The risk: Many clients approach us with a need for fast execution and a set deadline. Unfortunately, some IT companies make promises to keep the deadline without being certain if they can deliver on time. This can negatively affect your company, such as missing the time-to-market date and allowing your competitors to launch the same solution faster. Does this sound familiar?
• How to avoid it: When discussing timelines, it is crucial to emphasize the significance of meeting deadlines. The service provider should prepare a precise and detailed roadmap that includes possible revisions. If they fail to do so, the project is at risk of failure. At Euvic, we involve the entire team in a full simulation of the project or conduct a workshop with you before providing an estimate or making any promises. This is because we understand the importance of meeting deadlines in ensuring project success.

3. Making Incorrect Decisions About Used Tools, Technology, Hosting, etc.

• The risk: If you are looking for a reliable outsourcing provider to help you with your project, you will need to trust their experience and recommendations. Their suggestions on tools, technologies, and hosting solutions can significantly affect the outcome, particularly for critical projects. In some cases, resolving a technical issue can be more challenging and expensive than starting over from scratch.
• How to avoid it: It can be challenging to navigate the world of technology, especially if you’re not an expert yourself. In such situations, you have to rely on your partner to recommend and execute the best industry-standard practices. Look for indicators such as your partner’s strong connections within the IT industry and a robust portfolio of client cases. Working with major clients motivates software development companies to constantly compare and upgrade their tech solutions, which keeps their skills sharp and up-to-date.

4. Theft of Intellectual Property or Leakage of Sensitive Data

• The risk: When it comes to outsourcing your IT projects, it’s crucial to choose a trustworthy partner. You’ll need to provide them with access to your information, ideas, and even your technological inventions. Despite all the legal paperwork, it comes down to trust. It’s crucial to consider the country where your outsourcing partner is located, as well as the size, age, and reputation of the company you choose. Unfortunately, there have been cases where competitors have stolen business ideas and large amounts of data have been leaked to the public.
• How to avoid it: We, at Euvic, handle strictly confidential and highly critical projects for some of the world’s biggest companies. These projects, if leaked or stolen, could result in disastrous consequences. Therefore, we know of the importance and recommend thoroughly examining your clients’ cases and customer base, as well as verifying their certifications and compliance-related experience. Learn more about the risk of IP theft when outsourcing software development work, and how to avoid it.

Why Our Clients Chose to Outsource Their IT Projects to Us

We are a full-service software development company with over 5000 in-house employees across the US & EU. With +15 years of experience, we have faced various challenges and overcame them, which has led to our ongoing success and growth.

Our main focus is on delivering the highest quality of service to our clients, and this has been the number one reason for our success. We strive to maintain strong relationships with our clients and exceed their expectations by providing quality services within the set budget and timeline.

Our client case studies page showcases some of the incredible projects we have worked on, and we have received positive feedback from our clients who love outsourcing their IT with us:

• The ease and joy of working with us: Working with a service provider can be either… frustrating, acceptable, good, or even fun! We are proud to say that many of our clients have given us positive feedback on the ease and joy of working with us. To make work fun, all requirements must be met: Communication, style of work, consultation, and the overall outcome.
• Growing trust: This is one of our biggest achievements. Many of our clients have been with us for years, some even for over a decade! In a world where companies switch service providers frequently, we are proud that many of our clients have chosen to stay with us. Trust between our clients and us grows stronger over time, which is rare in the fast-paced IT industry where trust often fades away quickly.
• Our ability to challenge: We believe that our exceptional software development talent is what sets us apart. Our Polish engineers, who embrace a culture of honesty and straightforwardness, are not afraid to challenge any task or project if they see an opportunity for optimization. Unlike some other cultures where people stay silent and just execute, our team is trained to always seek improvement. We approach our work with the mindset of a trusted partner or a good friend.
• Cross-pollination between expert teams: Our approach is unique. We have over 100 specialized teams consisting of analysts and engineers, each specializing in their respective areas of expertise.  However, they also exchange knowledge and encourage cross-pollination, which has proven to be a successful concept not only in the IT field but also in other industries. Just as great surgeons discuss and exchange their analyses with colleagues from other medical departments, our experts stay interconnected, enabling them to recognize opportunities.

Conclusion: Outsourcing Software Development Has the Potential to Either Become a Major Competitive Advantage or a Nightmare

Outsourcing may not always be the best option for all tasks. Some tasks require in-house expertise to maintain full control. When it comes to software development, outsourcing can be a shortcut to success, especially when specific knowledge is required for a project. It can save time and cost, and the concept may sound simple, but it can end up as a nightmare if you fall for false promises of an outsourcing partner and blindly trust their words.

Sometimes, clients are at fault for not doing their due diligence properly and only looking for cheap labor, leading to a costly and painful experience. However, we have been providing successful projects to happy clients for more than 15 years. 

We take an extra step to help our prospects learn about our abilities, make sure it’s a fit for both sides, and treat them like a real partner.

We don’t hard-sell services that we can’t provide with 100% confidence.

Are you ready to experience it for yourself? We would love to meet you and learn more about your business and your project.