Benefits of the offshore in-house vs outsource team model

Emilien Coquard
4 min readJun 20, 2023

In today’s global economy, businesses continually look for ways to optimise their operations and stay competitive. Building an in-house team is a traditional way companies build a team of developers, but two strategies have challenged this approach in recent years — outsourcing and offshore in-house teams.

More recently, offshore in-house teams have emerged as a key strategy for companies looking to build tech teams that leverage the advantages of both offshore and in-house teams. To understand why they are gaining popularity, let’s first look at how these teams differ and the benefits of their respective models.

In-house vs outsource teams: how they differ

First, let’s take a closer look at outsourcing. It’s the practice of hiring an external company to perform specific tasks or provide services, which may or may not need access to the same tools, systems, and processes as the in-house team. In this model, a company contracts a third-party vendor to provide services or expertise for a specific project or function. The external company is responsible for managing its team, meaning the hiring company has a limited ability to set project goals, provide guidance, and monitor progress.

An in-house model, on the other hand, offers companies greater control over their teams because they have their own team lead, project manager, or department head, who reports to an internal manager or executive directly. Offshore in-house teams function in the same way. The only difference is they are in a different location than a primary team as they are full-time colleagues who work offshore. They typically also have access to the resources of in-house teams, which allows them to work seamlessly with their counterparts.

DID YOU KNOW?

Offshore in-house teams are not contracted for a specific project or function but are a permanent part of the organisation

So, it’s clear that while they are different, offshore in-house teams can function as a dynamic extension of a company’s in-house workforce. Now that we understand how these two models differ, let’s ask the question, what is the value or the benefit of an offshore in-house vs outsource model?

The pros and cons of in-house

An in-house team offers several benefits, including greater control over the project and development process, the ability to work collaboratively with other departments within your organisation, knowledge transfer resulting in greater institutional know-how and the opportunity to foster company culture and team-building. With an in-house team, you can manage the team’s work schedule, project priorities, and resource allocation to ensure the project meets your specific requirements.

This close collaboration can result in more effective problem-solving and innovation. In-house teams also allow for knowledge transfer within the organisation. Additionally, the culture and team-building fostered by an in-house team can result in a lower turnover rate and a more committed and motivated team. Unfortunately, in-house teams are not cost-effective, and many companies need help finding skilled workers locally.

The pros and cons of outsourcing

The greatest benefit of outsourcing is that it’s a cost-cutting measure. However, it also allows companies to tap into specialised skills and expertise they may not have in-house, enabling them to complete complex projects more efficiently and effectively. Additionally, outsourcing can provide access to the latest technology and equipment, which can be expensive to acquire and maintain in-house. Sadly, outsourcing can be problematic because it often involves working with third-party vendors who may not understand a company’s internal processes or culture deeply.

This can lead to communication breakdowns, delays in project delivery, and quality issues. In addition, there may be language barriers, and differences in work culture that can make collaboration difficult. Moreover, outsourcing may lead to losing control over the project and intellectual property, which could lead to security risks. Finally, outsourcing can be challenging to manage, and if the vendor doesn’t deliver on expectations, it can be costly and time-consuming to find a new partner.

The pros and cons of offshore in-house

Offshore in-house is the best of both worlds. It can also help companies streamline their operations, improve quality, and reduce time-to-market for new products and services because it combines these models. With this form of offshoring, companies can tap into specialised skills and expertise that they may need to gain in-house while also benefiting from greater control over the project and development process. This allows for collaborative work with other departments within the organisation, keeps the company culture intact, and makes for a more committed and motivated team.

And by leveraging offshore resources at a reasonable cost, companies can run their operations more smoothly. Although offshore partnerships may raise concerns about communication breakdowns, project delivery delays, quality issues, language barriers, time zone differences, loss of control over intellectual property, and challenging management, the right partner can effectively address these concerns.

Read the full article at: https://thescalers.com/benefits-of-the-offshore-in-house-vs-outsource-team-model/

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