In-house vs. Outsourcing: Which solution is more efficient organizationally?

Transcription of infographic content

In-house vs. Outsourcing: It’s not rocket science!

A quick guide to the business efficiency of in-house and outsourced software development.

In-house vs. Outsourcing Efficiency - A Timeline

This infographic compares the productivity over time between hiring an in-house developer and using an outsourcing company like Boldare.

Axes:

• Vertical Axis: Represents productivity, with “Full productivity” marked.
• Horizontal Axis: Represents time, marked by “1st month,” “6th month,” and “2 years.”

Boldare (Outsourcing) Path (Purple Line):

• Begins with recruitment and quickly moves to onboarding.
• Rapid transition to full efficiency; developer ready to work almost immediately.
• Maintains full productivity from the 1st month to 2 years.
• Contract termination is flexible, requiring only brief notice.

In-House Development Path (Red Line):

• Starts with recruitment and moves to onboarding, which takes longer.
• Full productivity is reached by the 6th month, indicating a slower ramp-up.
• Ends with contract termination, involving an extended notice period.

Comparison Insights:

• Outsourcing reaches full productivity faster (by 1st month) than in-house (by 6th month).
• Outsourcing offers more flexibility with quicker contract termination.

Comparison: In-House vs. Outsourced Development Teams

In-house Development Team:

• Recruitment: Complex, time-consuming, requires internal technical knowledge.
• Onboarding: Lengthy, involves integration into company culture, tools, and standards.
• Employment Costs: High, including leave, training, equipment, and risk of turnover.
• Termination: Extended notice period, complicated by labor laws.
• Quality Control: Requires internal resources and processes.

Outsourced Development Team:

• Recruitment: Cost-free for clients; team ready quickly.
• Onboarding: Brief, focusing on integration with the client’s team/product.
• Employment Costs: Known upfront; lower risk of turnover; tools and training included.
• Termination: Typically brief notice, easier process.
• Quality Control: Higher due to service standards.

Key Benefits of Outsourcing:

• More flexibility, faster time to market, better access to new resources, and freedom in team composition.

Hiring Software Developers - Cost Simulation

A simulation showing the potential average costs of hiring developers with different experience levels over two years.

Costs for Different Levels:

• Junior Developer: €96,600 for two years.
• Mid-Level Developer: €156,600 for two years.
• Senior Developer: €206,600 for two years.

Additional Costs (for each level over two years): Total €6600

• Recruitment: €2000
• Equipment: €2000
• Employer Branding: €1000
• Personal Development: €1600

Efficiency of Outsourcing

Working Days Calculation Over Two Years:

• Total working days: 500
• Days on annual leave: 56
• Days spent on onboarding and adaptation: 60
• Sick leave days: 7
• Effective working days: 500 - 56 - 60 - 7 = 377

Conclusion:

With holidays, weekends, and leave considered, there are only 377 effective working days in a 2-year period.

Statement: “Outsourcing is efficiency.”

How We Can Help:

• Translate business needs into a realistic product vision.
• Assemble a product-oriented team to meet your goals.
• Find the best talent to augment your team.
• Develop new apps from scratch or scale existing ones.
• Improve your time to market.

Interested in outsourcing your development efforts? Contact us to discuss how we can help you find a balance between your needs, budget, and timelines.

Information regarding sources we used: We used rounded figures from Western European markets, including Germany, because these pay conditions are the most similar to those our clients operate under.