E-commerce development: In-house vs Outsourced

If you are thinking about starting your own e-commerce business, you will find this guide very useful: How to start your e-commerce business from scratch.

Every business looking to operate in the e-commerce space eventually enters the stage where the decision regarding the best development route comes into question: is it better to outsource your e-commerce development or keep it in-house?

This is an important decision that business leaders should not take lightly, as the result will have powerful implications for either the success or failure of your entire business. Some businesses prefer to have a dedicated in-house development team attending to their e-commerce requirements as-and-when they occur, while others see the pros of outsourcing this service far outweigh the cons.

But this is not a one-size-fits-all situation, as making the right decision is entirely dependent on your business setup, company culture, and goals for the future. Thankfully, our team of Brainiacs has been hard at work weighing up the pros and cons of having your e-commerce development performed in-house versus outsourced to help make your decision a little easier. 

Let’s jump into it!

Pros of in-house e-commerce development

Complete control

Having a dedicated team of developers within your workforce who focus exclusively on your business’s e-commerce requirements means your platform is built according to your specific needs. Everything that needs to be accounted for pertaining to your own business requirements can be focused on directly, with actionable changes derived from your personal guidance and business strategy. You have complete control over every aspect of the build to ensure your in-house team delivers on your vision.

Quicker response time

Thanks to having your dedicated development team on-hand, your e-commerce development needs can be attended to quickly. This is especially useful when issues arise on your platform, which need fast remedies and quick-fix solutions before a thorough investigation can take place. Readily available staff provide a safety net for businesses who want to secure the ability to stamp out any minor issues before they become major ones.

Easier communication

Having your team in the same office or building allows for face-to-face communication. It’s no secret that developers are a particular breed of human (in a good way!), and dealing with them directly in-person goes a long way in not only getting them on board with company culture, but also to ensure your specific requirements are met. Clear and direct communication with your development team is crucial to avoid any misunderstandings which could result in costly mistakes and reverts.

Cons of in-house e-commerce development

It’s expensive

Assembling a development team to work exclusively on your business requirements full-time is a costly endeavour, especially for businesses just starting out. Developers are highly regarded specialists and thus are able to command high salaries. This is because of the value they provide your business – without them, you have no e-commerce platform. But having a team of dedicated specialists (and accompanying costs) is a luxury very few businesses have. Due to the high demand for developers in the tech industry, developers require their wage requirements to be met sufficiently enough to detract them from entertaining other offers. 

It’s not time efficient

Having your development team on-board in a full-time capacity means it is impossible for them to work on high-level tasks every minute the day. Sure, we all need microburst pockets of downtime throughout the day, but this is more of a bitter concept to accept when you are paying specialist wages. In reality, you will pay for not only the work they do, but also the time they spend not working during office hours. 

Staff churn

It is understood in the tech industry that most developers, by their own admission, do not possess a high level of staying power at the companies they work for. This is due to the high demand for specialists in the industry, and it is common for skilled developers to be approached by competitors. So expect constant disruptions in your workforce from people coming and going. Finding new developers takes time, and the impact of losing a team member during a time of need can be costly. The associated sourcing, vetting, hiring, onboarding, etc. costs must also be considered.

Pros of outsourced e-commerce development

A higher level of skill

Typically, outsourcing your e-commerce development provides you access to a wide variety of specialists with vast experience in the different development fields. In this instance, you are not paying for someone who is learning on the job, or handling sensitive information for the first time. Business leaders can rest assured that their e-commerce development is in the safest hands, eliminating any worries or the need for micro-management. If unusual issues arise, outsourced specialists can handle them immediately, as opposed to having to hire another specialist of your in-house team. You can focus on other areas of your business while having the luxury of knowing your e-commerce solutions are being handled by industry professionals who make a living doing this specific job.

A higher level of productivity

Outsourced development teams usually charge by the hour depending on the scope of work and size of the project. Thanks to their experience, cost estimates are always clearly defined so you know what you are in for cost-wise, which allows for more effective project management and planning. Charging by the hour means higher productivity, as each minute of a project needs to be accounted for – so you know exactly where your money is going. Specialists work far quicker and efficiently as they know what they are doing, meaning every minute is spent working on tangible tasks that make a huge impact on your e-commerce platform. 

More scalability and flexibility

The beauty of outsourcing remote teams lies in the complete freedom of scalability and flexibility it provides. You are able to scale up or down your development team according to your project needs and requirements. If you need more specialists for one technical project you can hire them by the hour to tackle that specific task, and not have to pay a full team’s salary to complete a handful of hours’ work. 

More cost-effective

Adding to the above point, outsourcing development teams can actually save businesses money in the long run. By hiring outsourced teams on an ad-hoc basis, you are able to know exactly what you can expect according to the hours billed. Sure, outsourcing teams of professionals may cost more per hour, but in the long run these costs are far lower than paying salaries of full-time employees. Basically, you pay for what you need and eliminate the redundancy. This positively impacts cost flexibility, as budgets can be appointed on a case-by-case basis. Additionally, all costs associated with full-time employees are negated (time off, sick leave, health and pension fund contributions, etc.).

Faster project delivery

Dealing with outsourced specialists means that all systems and procedures pertaining to building and maintaining an e-commerce platform are already established, saving you valuable time to channel into hitting the market before your competitors. Setting up an in-house development team requires a lot of time to hire and establish processes, and in the e-commerce game time is valuable when going to market. With outsourced teams, you can expect work to begin from the get-go.

Cons of outsourced e-commerce development

Remote communication

In a pre-COVID-19 world, some business leaders felt that having your team housed under the same roof directly translated into better productivity. As we have all come to realise, this ‘out-of-sight-out-of-mind’ viewpoint doesn’t entirely reflect the way people work in today’s competitive marketplace. Some managers feel that if their team is remote then they have no control over what is happening due to a lack of transparency. It is best to establish early on clear instructions as to each project and set up regular meetings to gain clarity and transparency from your remote teams. Clear and concise reporting submitted regularly will provide ultimate clarity. Thanks to the recent advancement of the technology of video calls, emails, and virtual assistants, the world has embraced remote working as an evolution in the way businesses and people operate. Business leaders now realise that they can effectively communicate with their remote teams easily and do not have to be in the same room anymore. 

Security risks

Some businesses feel that outsourcing development teams on a project-by-project basis leaves room for security leaks and intellectual property (IP) theft because outsourced teams are not officially part of the company. Although valid, this concern is easily negated by insisting on non-disclosure agreements (NDA) and various other legal processes. Be sure to set up regular meetings and feedback sessions with your remote teams to see their engagement levels and motivation for each project. However, the security risks in the handling of sensitive business information from outsourced teams shouldn’t be an issue as no development vendor will risk their reputation for such trivial reasons.

Summary

As you can see, the benefits and drawbacks of in-house and outsourced development teams carry with them their own set of criteria which should be considered according to your business needs. In reality, outsourced teams provide the same services that most in-house teams provide, but at far higher levels of specialty and experience. The cost implications of hiring outsourced teams for each project are far less than employing a team of full-time developers. But most importantly, the major benefit of outsourcing compared to in-house is the freedom of flexibility it provides. In a fluctuating, volatile industry such as e-commerce, wouldn’t you want to structure your teams to be nimble and adaptable to change?

Get in touch

If you are looking to outsource WeAreBrain’s team of development and design specialists to provide smart and sophisticated e-commerce solutions for your business, get in touch with us today.

Mario Grunitz

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