Technology Outsourcing vs. Internal Staffing: What’s the Right Balance?

October 15, 2018 | Michael Donahue


Your organization has decided to embark on a new technology initiative. The executive team is buzzing with excitement, and your stakeholders are hoping that innovation will boost company profits. Conceptually, this new digital application is a home run—but, one major question remains: who’s going to build this thing?

According to John Tweardy, Principal for Deloitte Consulting, ”technology outsourcing has become indispensable service delivery model to capture market innovation and enhance a company’s capabilities.” For businesses adapting to changing industry forces and digital disruption, partnering with outside technology consultants can lead to strategic, competitive advantages in the long run. After all, finding specialized, in-house technical talent takes time—and a lot of money.

But what about enterprise organizations that have already put the effort into building their IT and digital teams? If those resources are already on hand, shouldn’t they be utilized? In this article, we’ll explore the benefits and downfalls of handling a digital project in-house versus hiring an outsourced technology firm. These assets and liabilities should be kept in mind as your organization moves toward procuring an effective skill set for your project.

Core Competencies
Understanding the skills and expertise necessary to build, implement and manage a technology build is the first step to determining whether or not your staff can handle a project on their own. A successful project requires a deep understanding of the unique systems needed not only for the build at hand but also its integrated technologies. When evaluating outsourcing, technical expertise should remain top of mind. 

  • When to outsource:

    Traditionally, a full-time employee possesses a general set of IT skills that can be applied to a variety of situations—making him or her an indispensable “jack-of-all-trades.” However, when a very specific skill set is essential for a particular task, it may make sense to hire a specialist exclusively for the duration of the project. You may even choose to have the contracted specialist lead your team of developers and technology personnel, providing your staff with a valuable opportunity to learn and cultivate their skills. 

  • When to bring in-house:

    If a member of your technology team is capable and well-versed in the applications necessary to complete your organization’s project, by all means, build it in-house. It can be strenuous and time-consuming to find a resource with the right skills, at the right level, who is also trustworthy, affordable and available when needed. If only a minute amount of training is needed to reach the requisite level, outside expertise may not be necessary for a successful technology build.

Business Reputation
Any business owner will tell you that their company’s reputation is of utmost importance. While an organization’s success is directly linked to its reputation, too many companies are willing to risk it all for a cheap technology build.  Saving those initial dollars by outsourcing to an inexperienced contractor, or by taking a project in-house to an unqualified staff, can tank a business’s reputation—especially if the end-product is consumer-facing.

  • When to outsource:

    This idea ties back in with the core competency argument—if your staff is not specialized in the technology essential for the completion of the project, you should outsource the work to ensure positive results. After all, there is nothing costlier than having to fix an application over and over again because it wasn’t built correctly the first time around.

  • When to bring in-house:

    On the other hand, hiring an outsourced firm without thoroughly vetting the individuals tasked with building the project can lead to headaches. When your brand reputation is at stake, it can be in your company’s best interest to keep the project close to home. An outside contractor may need to be brought up to speed on the intricacies of your organization, costing time and money. In-house employees will have a greater personal investment in making sure the job is done right and will also be more likely to go the extra mile. They know exactly what is needed and are familiar with all aspects of your company. An outside contractor, conversely, needs to be brought up to speed—costing additional valuable time.

Timeframe to Launch
How soon does your new technology need to be made available to its end-users? The shorter the timeline for final launch, the more necessary it may be to add bandwidth by bringing in contractors or an outside agency. If the overwhelming scope of your project is hindering your decision to outsource or keep your work in-house, consider enlisting a change management program to avoid hamstringing your process—with or without contractors.

  • When to outsource:

    How are your staff’s time and talent best spent? If your employees’ time is better allocated working on other initiatives, consider outsourcing your technology project. Often times, business leaders put their “B team” on large technology builds so the “A team” is available to operate the internal lines of business. This usually backfires as your most capable employees are left on the sidelines. When your organization employs an outside contractor, you can be assured the best person is on the job. Optimize your internal team’s time where it’s most efficient and leverage external expertise to fill in the gaps.

  • When to bring in-house:
    If your project is set to launch in well over six months, your company may consider bringing the project in-house. Typically, projects that fall into a shorter time frame and require a more immediate precedence are subject to outsourcing. If your technology build is not within your top five most important priorities, you may find your team can handle the workload. You always have the option to outsource if time to market becomes more crucial in the future.

Project Budget
Budget is a major consideration for almost any project. In order for a project to be executed accurately, efficiently and effectively, your company needs to find the budget for necessary services—in-house or outsourced. Knowing exactly what is needed up front will help keep costs under control and expenses from inflating throughout the duration of the project.

  • When to outsource:

    If your internal staff is not fluent in the intricate technologies and nuances necessary to complete your project, outsource it. Too many organizations spend an enormous amount of money trying to undertake an area that they are not fully prepared for and become frustrated when they fail to see the desired results. While the upfront costs of outsourcing can be steep, the money saved by doing things correctly the first time around can pay for itself in the long run.

  • When to bring in-house:

    Your internal employees know the ins and outs of your company. You do not have to spend extra time getting them up to speed on the way your organization conducts business as you would with a contractor. Your employees know which crucial details require close attention, areas an outsourced team may miss. With an in-house specialist working on your project, costs can be kept under control and expenses won’t bloat—all while working within the same salary they are already paid. While costs can be scaled in-house, it’s important to remember that all of this is possible only if your employees are highly capable of executing the requirements of your technology build.

Before your organization drafts up an RFP or looks to hire an in-house specialist, consider all the major aspects of your project and its effect on your business at large. Evaluate your team’s core competencies. Are they capable of strategizing, constructing and launching the technology initiative at large? The answer to this question should fuel any remaining concerns you may have about your project. When in doubt, outsourced resources can always be brought in at any time to fuel your project’s completion.  

Interested in partnering with Falls Digital on your next digital project? Contact us to determine the best steps forward to launching your initiative.

Topics: featured Change Management Future of Work Digital Maturity Model

About the Author
Michael Donahue

Mike Donahue, Director of Technology at Falls Digital has extensive web platform experience working in both Architect and Developer roles to achieve robust technical solutions across many platforms including: Sitecore, Salesforce, ExactTarget, Ektron, Umbraco, ASP.Net, MVC, Java and Liferay. Mike is Sitecore certified and has nearly a decade of experience working directly with the platform. Mike has tackled a wide range of projects and has provided diverse solutions to fulfill the unique requirements of each client.

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