Pros And Cons Of Outsourcing

Q: I'm a Product Manager at a company that is considering to outsource development to a remote software firm. Do you recommend outsourcing?

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I personally prefer having the team in-house, although a case for outsourcing can be made in certain situations.

I've had both positive and negative experiences with an outsourcing model. Of course, a lot rests on the vendor you eventually pick for your product.

The Negative

Back in the day, I was tasked to develop a B2C website for Bayt using a software firm. The challenges I grappled with:

• We were treated like second-rate citizens as the firm had other projects to deliver with the same resources
• We went in with a fixed-cost model which meant veering slightly away from initial scope detonated a change request
• Communication was guarded. The vendor would always be probing scope. I'd be downplaying user flows. There were reminders on potential slippage with every design tweak
• When we eventually brought the source code in-house, we saw shortcuts had been taken & it was hardly reusable

All in all, it was a tense affair which wasn't enjoyable for either party.

The Fairly Positive

• In 2018, vFairs was investing in innovative product lines & had decided to build a novel mobile app. We contracted a software vendor in Lahore for development
• They were a professional setup with a customer-focused attitude. It took them 3 months to build 2 apps
• Now, after our fifth sale on that product coupled with a massively positive response from other users, we were convinced that we could turn this into a sustainable product line
• Maintenance costs were pretty high though so, to economize, we soon hired extra staff & moved the source code in-house

So, I can see outsourcing being a viable option if:

• Your investor milestones & financing runway are so tight that you'd lose crucial time hiring & building an engineering team
• The product you're building is not your core business rather its an experiment OR involves a novel technology your current team has no experience in
• You're renting out a team that will work exclusively on your product & will not be shared across other projects

That said, even if you did start out with an outsourced model, it may not be the best long-term solution.

With an in-house team, since everyone's success is hinged on the same product, you're able to forge closer bonds & command more commitment (and accountability).

A native team also allows you to eliminate administrative friction, react very quickly to market changes, customize processes to what suits you best & map out better ownership.

Of course, the caveats are that it takes time to hire people, build processes & ramp up productivity. Patience is key.

So, in the end, I'd personally lean towards an in-house setup, especially when you need to be extra nimble at the start.