OUTSOURCE THE DEVELOPMENT OF YOUR PRODUCT OR DO IT IN-HOUSE?

Product development is an intense process that involves specialized technical staff, methodology, extensive processes and especially many iterations, even after the product is finished, however, there may be errors that delay the release of the product and without a dedicated team of hardware developers, firmware, casing, testers, designers and others, it is difficult to imagine a successful result. This can easily overwhelm any company, since in Latin American culture the practice of outsourcing is not so frequent or so popular, although the business sector is increasingly adopting new practices that allow it to be more agile in its innovation and digital transformation processes. This can be a difficult decision to make, especially if you do not have experience outsourcing these types of activities.

This article has the intention to provide value elements and that we consider important in the decision-making process facing these two alternatives. Below we will present the positive and negative aspects of both possibilities and it will be up to you to decide.

POSITIVE ASPECTS

Outsourcing

Low costs

It is not only about the members of the team and their selection process, in addition to their work tools, specialized equipment, software licenses and more. Generally these elements exist in the companies dedicated to providing this type of services. This is why it is cheaper to outsource.

Salary Linkage

Not generating this link makes things easier and reduces the risk of situations, especially during the process of resizing work teams on a project. Additionally, the associated operational charge will correspond to the service provider and not to you.

Talent retention programs

Product development requires specialized engineers that are expensive and also talent that can rotate easily, so companies usually have to create retention programs that are also expensive and complex to manage.

Quality of service

When outsourcing, quality can always be demanded, with clearly defined criteria and generally the necessary iterations and guarantee processes are in charge of the company providing the service.

Centralized and structured communication channel

Although this is one of the most important challenges in any process, when outsourcing a work team, communication can be structured with a project leader who simplifies and reports in a structured way the general progress of the project in all its phases.

Risk Reduction

In the event of eventualities in other areas of the company, it will always be easier to make decisions about stopping projects in intermediate phases than reducing internal work teams.

Internal development

High motivation

Usually the internal work teams will be much more motivated understanding the impact that the new project will generate in the general business of the company.In addition, there are complementary ways to promote the development of the members such as intra-entrepreneurship schemes or others.

Salary Linkage

If a project is well structured, it will be easier to have control and carry out adequate monitoring over its stages and its evolution. Allowing you to make right decisions at all times.

Greater functional knowledge of the product

Without any doubts, this is one of the most positive factors when developing a product internally, since you can receive direct contributions from the work team and also from the other operative groups of the company, which will add a lot of value, especially in the stages of construction.

Productivity

If the work team is dedicated 100% and in an exclusive way to the project, this will undoubtedly be an aspect that will be noticed in the execution of the project.

POSITIVE ASPECTS

Outsourcing

Low costs

It is not only about the members of the team and their selection process, in addition to their work tools, specialized equipment, software licenses and more. Generally these elements exist in the companies dedicated to providing this type of services. This is why it is cheaper to outsource.

Salary Linkage

Not generating this link makes things easier and reduces the risk of situations, especially during the process of resizing work teams on a project. Additionally, the associated operational charge will correspond to the service provider and not to you.

Talent retention programs

Product development requires specialized engineers that are expensive and also talent that can rotate easily, so companies usually have to create retention programs that are also expensive and complex to manage.

Quality of service

When outsourcing, quality can always be demanded, with clearly defined criteria and generally the necessary iterations and guarantee processes are in charge of the company providing the service.

Centralized and structured communication channel

Although this is one of the most important challenges in any process, when outsourcing a work team, communication can be structured with a project leader who simplifies and reports in a structured way the general progress of the project in all its phases.

Risk Reduction

In the event of eventualities in other areas of the company, it will always be easier to make decisions about stopping projects in intermediate phases than reducing internal work teams.

Internal development

High motivation

Usually the internal work teams will be much more motivated understanding the impact that the new project will generate in the general business of the company.In addition, there are complementary ways to promote the development of the members such as intra-entrepreneurship schemes or others.

Salary Linkage

If a project is well structured, it will be easier to have control and carry out adequate monitoring over its stages and its evolution. Allowing you to make right decisions at all times.

Greater functional knowledge of the product

Without any doubts, this is one of the most positive factors when developing a product internally, since you can receive direct contributions from the work team and also from the other operative groups of the company, which will add a lot of value, especially in the stages of construction.

Productivity

If the work team is dedicated 100% and in an exclusive way to the project, this will undoubtedly be an aspect that will be noticed in the execution of the project.

NEGATIVE ASPECTS

Outsourcing

Higher cost

In general, it should be considered that the implementation of the work team, tools, software licenses, technological platforms, laboratory equipment, training and others that in case it is only for one project, could result very high.

Lack of experience

Unlike the companies that are dedicated to providing these services, companies generally have their business focus on taking to their clients products, services or solutions that add value or solve a specific problem. Por ello, existen muchas áreas de conocimiento que suelen ser desconocidas para los equipos de trabajo que realizan esta actividad de forma esporádica.

Non-exclusive dedication to the project

Nothing is more dangerous for the development of a project than the combined dedication of resources, often due to lack of budget or people, because when the main business requires more dedication it cannot be denied, reducing the priority of the project. Sometimes projects do not see the light due to this factor.

Speed of Execution and Total Duration of the project.

Many things can happen within a company that can impact the speed of execution of the development of a product, only with the monitoring of internal processes, often rigid and full of steps and procedures, is enough to slow down the dynamics of execution of activities. In general, the process could take much longer internally.

Work team scalability

Increasing or reducing the size of a product development team is always more complex when it is the company that does it, due to a lack of specialization and knowledge.

Methodology and Documentation

Generally, when people are in their environments within companies, they are not so rigorous with the documentation processes and use of traceability tools of their development processes, which generates difficulties in the post-sale and product maturation stages.


Rotation of Specialized Personnel

This is one of the most frequent headaches and where companies lose dynamics and productivity in the development of their products. Even in extreme cases the business continuity is put at risk due to this factor.

Outsourcing turns out to be more cost-effective than the creation and maintenance of an in-house development team. When delegating technical tasks, all the general and particular expenses involved are borne by the selected company. You will also benefit from increasing or decreasing the workforce efficiently and at a lower cost. On the other hand, if you decide to implement an internal work team, it is your company that bears all the expenses.
The choice between developing a product internally or outsourcing it is a decision that will always be complex, since both possibilities offer their strengths. In-house development is attractive because of face-to-face communication, shared culture, and full control, while outsourced development offers unmatched cost reduction and specialized tech talent, with global vision and experience. By carefully evaluating your pros and cons, we are sure that you will take the right path.
Are you looking for a specialized company to accompany you in the development of your product?
Send us a message and we will gladly evaluate the best way to support you

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