I’ve been in that same meeting where someone writes a number on the whiteboard to hire an in-house dev team, and then it’s quiet. Quickly gets into doing mental calculations. Then it comes to the word outsourcing and half the room relaxes and the other half tightens their fists over quality control. Again, it can’t be done universally, but there is a smarter way to think about it.
The Real Cost Difference
As I came to find out early on, outsourcing is not only “cheaper” it’s cheaper on many fronts. You don’t have to pay for recruiting, benefits, office overheads or have to deal with the loss of information when someone leaves the company in the middle of a project.
Outsourced projects can cost approximately half as much as a project done in the U.S. by the same agency, and have the same quality if the vendor is properly vetted, according to recent industry data. This is what one might expect to see between the first and second quarter of a product’s launch.
| Cost Factor | In-House Team | Outsourced Team |
| Average project cost | $120,000+ | $45,000–$70,000 |
| Hiring timeline | 3–6 months | 2–4 weeks |
| Recruitment & benefits | Full overhead | Not applicable |
| Office & equipment costs | Included | Not applicable |
Speed Matters More Than You’d Think
Hiring in-house? Expect it to take 3-6 months to assemble the team. I have experienced that time line and it sucks to see a competitor start out and have to wait until your interviewers have finished hiring for a job that requires little or no training.
They have already developed the needed developers, which they already have at their inventory as outsourcing partners. Projects are put in motion in two to four weeks for some. So far, that speed benefit alone has changed entire product roadmaps of clients I’ve been on the journey with over the years.
- Pre-vetted, immediately deployable talent
- No onboarding lag for tools or processes
- Parallel workstreams across time zones
- Faster iteration cycles post-launch
Where Local Teams Still Win
I don’t want to say it’s never done of course, but outsourcing doesn’t always win. Having engineers on hand makes a difference when your product is constantly in need of a close collaboration with sales, legal or leadership. When it comes to miscommunication, caused by a 10-hour time difference, it is no fiction and it’s a cost to you.
Local teams also know the culture of the company quicker with minimum ramp-up. When your app is integral to your business, rather than optional, it’s sometimes worth the premium.
What Goes Wrong When Companies Choose Badly
I have been there and it has happened more than once: A company chooses a supplier only because of the price, and a rebuild occurs six months later. The cheap and the smart aren’t the same and this difference is quickly revealed when real users start clicking around.
The other error that occurs too often is playing safe, when you aren’t required to do so, and wasting funds on a team when you could’ve spent them on a different team. In any case, there should be a reason for the decision, and not a habit or fear of making a decision.
Building a Model That Fits Your Business
Most teams I’ve seen that have been successful at the highest level lately aren’t choosing side A. They’re putting both onshore, having product strategy and UX design decisions onshore, but having the engineering team offshore.
Having a partner, such as Meta App Design, who can help you with the strategy and design, and who has engineering personnel all over the world, means that you’ll get quality where it’s needed, and savings where you can afford it. It’s a method that’s emerging as the norm of growth-stage businesses that were scammed with extremes in the past.
Outsource or Stay Local
There has to be a time when all this weighing comes to a conclusion, and that’s more difficult than the weighing. Before you commit, consider your runway, your time pressure and how much hands-on supervision is really required for your product.
When time and finances are the driving factors, outsourcing typically prevails! For those apps that need constant input, and are deeply integrated into daily life, local or hybrid is better. If you make this choice later, there’s nothing wrong with doing so, either it isn’t forever!
Conclusion
Again, there is no right or wrong answer here, as it will depend on the budget, time frame and degree of integration needed with daily operations of your application. Outsourcing is a money and time saver. Attaining success with local involvement requires good working relationships.
A careful mix of the two is proving to be the perfect recipe for a lot of companies one they weren’t anticipating to work off the palate.
