I’ve been doing a lot of thinking about when/why a company should outsource application development. Our Rural Sourcing offering at Improving is a perfect solution for companies looking to outsource custom development, but I wonder if I would be acting in my customer’s best interest if I were to council them to choose outsourcing a large, long-running development project to Improving rather than staffing up internally and executing the project in house. Here is a bit of the conversation I’ve been having with myself:

Outsourcing offers several clear advantages:

• No hiring/onboarding necessary. This is important because recruiting/hiring is an expensive proposition and a long-term commitment. A company can potentially save money by outsourcing if the project is sufficiently short by avoiding recruiting costs and avoiding down-time for full-time staff when there’s not an expectation of continuing need.
• Opportunity to gain access to specific skills/knowledge. Training existing employees could be more expensive and time consuming than hiring a consultant that already has the desired skills.
• Assumption of risk. If the contract is structured in a way where a consulting company is penalized financially if the project delayed or missing expected functionality, some of the risk of a development project is transferred to the consulting partner.

“So what happens if the project is longer and transfer of risk is not important to the client? Is there a conflict of interest for a technology consultant between his/her employer’s desire for continued/long-term business and the customer’s desire for a quality product at the lowest cost?”

The answer is yes, in some cases there might be. Traditionally, outsourcing application development is more expensive on its face than developing an application with available internal staff because the consulting company is in the business of making a profit.

“So, what do you get for that extra cost?”

In our case what you get is a highly functional team and superior development practices that produce a higher quality product in less time. Even though the cost per hour is more, the actual cost and total cost of ownership are dramatically decreased.

“That sounds great! Except wouldn’t it be even better if the customer made THEIR staff highly functional and incorporated those superior practices into THEIR organization so they can produce all of their software with our efficiency and less cost using staff that already has the necessary domain knowledge?”

In most cases I think it absolutely would, if delivery of the particular application in question is not extremely time-sensitive (the transition, of course, doesn’t happen over night).

To be a full-service consultancy and a quality partner to its clients, Improving offers training, mentoring, and outsourced application development and our corporate values state that we’re always happy to work ourselves out of a job.

“Whew! So much for that conflict of interest! But does that mean I should recommend mentoring in agile practices over outsourcing?”

Perhaps yes if we’re talking about traditional outsourcing and the organization is prepared to adopt a more agile philosophy (that’s a whole other conversation!). The interesting thing about Rural Sourcing is the concept of being able to provide ALL the advantages of outsourcing at an hourly price comparable or even less than developing the application internally.

The conclusion I’ve been able to come to is that Rural Sourcing is definitely a valuable service offering for my customers and I have no problem feeling good about recommending it every chance I get as long as I’m confident we can produce a top-quality product using a highly effective agile team at a low cost. With that formula I think everyone should send their projects to the Rural Shore .

<– Rural Shore of Lake Bryan, Near our Rural Sourcing center in Bryan/College Station, TX