Getting the right technology to solve business problems creatively can be a challenge; it costs time, money, and valuable resources. Choosing to embark on a custom software development path can be tricky, and its often an area that companies choose to outsource. How do you know what the right approach for your project is, and if you decide to outsource, how do you settle on the right vendor?

This article aims to look at the pros and cons of outsourcing custom software development projects, and how to ensure you set your project up for success from the very beginning.

PROS of outsourcing:

  • Utilise talents and experience of experts in the field: The world of custom software is dynamic, with new technologies and tools being introduced to the market regularly. To stay competitive in your field, and to ensure you reach your business outcomes, it is important to remain openminded and flexible with the technologies you will use, when embarking on a custom software project. An in-house team might lack the skills and experience to develop the right solution for you. No two custom software development projects are the same, but dedicated organisations to custom solutions are more likely to have experience building a similar system or solving a similar pain point for a previous client.
  • Control over costs: When you engage with a third-party, a contract will always be drawn up before your project gets underway. You can work together to define the payment type (fixed cost or time and materials), and the payment terms, so you have predictable billing in place. Engaging with an external vendor means you can drive down on overhead costs once the project is complete and you no longer need their service, instead of hiring additional internal resources and keeping them on the books once the project is complete.
  • Solves capacity issues and frees up time for your organisation: Engaging with an external vendor to develop your custom system, means your organisation can focus on your core business. Your development team do not need to add this project to their workload, meaning capacity issues and burnout can be avoided.
  • A more agile & reliable approach: External vendors tend to be more agile in their approach than in-house teams, which can help your project stay flexible and adaptable. If a new technology or tool would improve the functionality of a task in your system, an outsourcing company will have the ability and expertise to implement this without starting from scratch.  

CONS of outsourcing:

  • Unaligned business values: When embarking on a custom software development project, it is important to work with a vendor who is aligned with your business values and methodology. You need to establish a pace that works for both parties involved, to ensure you do not lose control over the project and that you are involved with important decisions and milestones throughout. Cooperating and striving towards the same goal will help ensure success.
  • Low quality work and poor documentation: It is imperative to do your research before engaging with a third-party vendor. Ask to see previous examples of custom software projects, perhaps with a similar problem being solved or with a client in a similar industry. Reputable companies should have various examples of case studies and previous projects to show you, which will give you confidence in knowing they can achieve the outcomes you are looking for. It is also a great idea, and well within your right, to discuss the policies and processes they have in place. How will they ensure their code is of top quality? How can they ensure timeframes are met? Documentation should be available for you to access that gives you the information you need, so you can go into the partnership openly and transparently.
  • Hidden costs: Outsourcing your custom software development project, can certainly be cheaper, as discussed earlier. However, you do need to ensure you have not engaged with a company with hidden costs. Make sure you read the contract thoroughly, especially the small print, so you do not get any nasty surprises along the way, such as additional costs for meetings, phone calls and “extra work” you thought was covered in the original agreement. You will need to keep in mind the possibility of scope creep or change requests. You might have an initial idea on what it is you want, but when you go out to the market and see things and get an idea on price, you might change your thinking or introduce new ideas. This is great in a way, as you can explore new technologies and be flexible in your approach, but it can also be problematic as it opens up room for indecisiveness. There are things that can go wrong with a custom software project regardless (the unknown unknowns), and outsourcing won’t necessarily fix this, unless you have a great partner. You need to have a very defined scope from the beginning, so everyone is clear and aligned on what is being covered during development.

When embarking on a custom software development project, it is important to complete your research diligently. Your in-house team might have all the skills required to develop your solution, and at first glance it might seem like the simplest and most cost-effective option to keep your project in-house. However, other projects might be more complex and require the input of external expertise. It is important to remember that outsourcing can be cheaper and drive broader transformational change to your organisation. If you do decide to outsource, a healthy client-vendor relationship is essential in the successful delivery of your solution.  

If you have a project you are thinking of outsourcing, or are after some further advice, contact Solentive today to speak to one of our technology experts. We take the time to understand your unique needs as a client, and offer innovative, tailored custom software development.