In-house vs outsourcing business models: differences and benefits

In-house team: pros and cons

Cons of the IT in-house team

  1. Great expenses. The insourcing or in-house team is quite a luxury item. You’ll need to invest a lot of money in the recruiting process. Also, you need to equip the workplace for every new employee or even rent/buy a new office because of team extension. Besides, you’ll need to pay salaries even after the project will end — or fire the specialists and hire them anew when the need arises.
  2. Time. Highly-qualified specialists are rarely available in the job market. Usually, they already have a job and don’t want to change it. So, you’ll need to offer such specialists something better than they already have. This might be a great salary, an interesting project, etc. While you look for the talents, gather them and create a cohesive team, your project is paused. Nowadays a lot of innovations need fast implementation. This allows the company to stay competitive in the market, and prolonged pauses are very undesirable for your project success
  3. Absence issues. If some of team members become sick or leave, you need to spend time and money on new hiring or endure project pauses.

Pros of the in-house team

  1. Control. You can manage teamwork internally and control all the processes. This is a very important point for some business owners so we can’t neglect it.
  2. Work immediately. Of course, you need to spend a lot of time to collect the team but after that, you can immediately start to work with new projects. Access to the talents in-house can be a good competitive advantage.
  3. Deep understanding. The in-house team work with the project from its start till completion, so they know all the features and can work with them on quite a deep level of understanding, unlike the outsourcing team which will need time to discover and grasp the project details.
  4. Talent development. If you need some specific talent, you can develop your employees in the way you need them. As a result, you’ll get a satisfied employee because he gets an opportunity for professional growth and simultaneously you’ll have a necessary specialist in the team.
  5. Outsourcing. Yes, we are still talking about the insourcing team but here is a thing. You might outsource your own team and become an MSP. Such an approach is suitable if you finish your project and can’t organize fulltime work for every team member.

Outsourcing team: pros and cons

Cons of IT outsourcing

  1. Quality. Yes, the very first disadvantage is the probable bad quality of work. There are a lot of situations when the business owner was forced to collect in-house team to solve problems after the outsourcing team. To avoid this risk you should select the MSP very meticulously and check its reputation on the market before hiring the team.
  2. Management issues. You can be involved in the project but can’t control all the things. Actually, with a reliable MSP, you won’t need to control everything but there are still a lot of business owners who don’t like to delegate important management tasks. In this case, you might hire the dedicated team and involve your in-house Project Manager in the project.
  3. Problems with communications. This is not a big problem in the 21st century but still, you need to pay attention to the time zones and choose the MSP with the appropriate one.

Pros of the outsourcing

  1. Cost efficiency. Unlike the insourcing team, the dedicated outsourcing team will save you a lot of money. You shouldn’t make a lot of interviews, pay huge salaries for top in-house specialists and equip workplaces. You just pay the agreed sum per hour or for the whole project. Also, you don’t need to pay salaries after the project ends.
  2. Access to the talent pool. A lot of great IT specialists work with MSPs because top-level talents like variety in projects to support their professional growth and MSP can provide it.
  3. Focus on core business functions. You’ll delegate a part of your work and can focus more on some important business needs, allocate resources for it, etc.
  4. Reduction of the personnel size. This is quite important because you don’t need to look for a bigger office, equip new workplaces, etc. You just hire a dedicated team and can work with it despite locations.
  5. Quick team change. If you don’t like the quality of dedicated team work, you always can find new MSP and change the team. With in-house specialists, it’s more difficult.

How to find a good IT team?

How to find a good MSP?

Final thoughts: who did win, after all?



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store