What’s the Best Option for Your Startup: IT Outsourcing or In-house Team?

Today's digital industry does not stop evolving. New technologies appear, and with them, progressive frameworks, development languages, and methodologies. It is difficult to keep up with innovations, especially if you are an ambitious startup owner.

If you need urgent IT solutions for a quick entering the market and increasing the competitiveness of your business, you should pay attention to the outsourcing development model. It will allow you to delegate the bulk of the work to an expert contractor and focus on solving actual business problems. Today we will compare “in-house” and outsourced development and explain the key benefits of hiring experienced performers for a project.

Features of Development for Startups

If you own an economic, entertainment, or social startup, you may have trouble from the early planning stages of developing an IT solution. This is normal because you don't have to be a tech-savvy expert to generate cool ideas. 

Startups come in many varieties, but IT solutions for them often come down to three types:

• Simple or comprehensive sites.
• Universal Web apps.
• Native mobile apps.

How do you choose the best one for your startup?

• Analyze the market and evaluate your competitors' digital products.
• Find out what makes similar projects more popular.
• Choose the top tricks and adapt them to your business.

It will help you understand which of the three types of development is right for your startup.

The challenges of going to market for startups

There are now more than 1,000 projects launched yearly on crowdfunding platforms. Some of them are technical and are aimed at building app development companies. Another part is tied to selling goods or services and social products.

In this regard, there is serious competition, which can bury projects with insufficient funding, weak marketing, or poor idea pitching.

Top 5 reasons why startups fail

We highlighted five main reasons that force startups to close either immediately or within the first three years after launch.

• Poor marketing. This problem is due to a lack of experience among young entrepreneurs.
• Lack of budget. The problem appears when trying to launch the development of an IT product and is solved by attracting funding.
• Duplication of the concept. Plagiarizing a successful startup only leads to budget draining and project closure.
• Weak idea. Failure is guaranteed if the market is oversaturated with such projects or if consumers do not need them.
• Bad IT product. If the app's quality is not what it says, the functions don't work, etc. – A target audience will not appreciate it.

This is by no means a complete list of the drivers of startup failure, but it includes the main factors, in our opinion. Assessing the risks before releasing a project to the market is a key planning point to avoid failure. Also, if a startup is tied to an IT component, it's vital to ensure that it is of the highest possible quality.

IT solution quality as a guarantor of success

Will you use an unoptimized app where some of the features don't work, and bugs often show up? That is why ordinary consumers do not want to install such things on their devices. It is quite logical behavior that can be avoided. To do this, it is necessary to include a QA service in the development package.

Quality assurance of an IT product:

• Testing from the start of development.
• Timely bug fixes.
• Cleaning the code and design from unnecessary elements.
• Optimization of performance on all platforms.
• Post-release support.

These services are usually included in a comprehensive development package of outsourced teams. In contrast to the in-house staff, where additional specialists need to be hired, contractors perform the tasks themselves. This not only increases the quality of development but also reduces the budget for hiring additional resources for the team.

Outsource and In-house Development: Differences and Advantages

The development model choice involves several factors influencing both the cost of creating a digital product and its quality. We believe that outsourcing wins over in-house teams in terms of price/quality ratio, and we offer you a comparison table of both options.

In summary, outsourcing offers a flexible development model, high code quality, full optimization, and additional services. An in-house team requires investment in hardware and training but is always on-site and supports the IT solution 24/7.

Pricing Policy

At first glance, it is more profitable to assemble its own staff of developers on a permanent basis because for this, you need:

• Hire specialists.
• Rent an office.
• Buy equipment.
• Pay for licenses and hosting.
• Periodically invest in training.

In practice, however, there are almost always additional expenses, such as hiring contractors to solve minor problems, replacing equipment, etc. The final cost of development increases and is not always covered by the profit from the release of the IT solution.

With outsourcing companies, you only pay for:

• Team hire.
• Number of functions.
• Additional services.

When hiring contractors, you pay only a fixed amount or an hourly rate, depending on the contract. The outsourcer company bears all other costs: replacement of equipment, advanced training, and logistics. This significantly reduces the budget and allows you to focus released resources, for example, on marketing.

Budget – the basis of planning

Regardless of the collaboration model, try not to overspend the budget. It is crucial for startups because external investments are not always enough to cover their basic needs. Focus on simple, flexible technologies. It will allow you to release a robust, optimized digital product that is scalable.

To summarize

Launching a startup is almost always a risky venture. And only a competent development plan, a marketing strategy, and a reliable contractor can help you successfully bring a digital product to market. Would you like us to help you create an innovative IT solution for a startup?

Our custom software development company is the industry's flagship and specializes in helping promising entrepreneurs! Break into the digital product market without any extra effort – delegate the development task to the experts!