Bringing an Outsourced Software Development Function In-House: How to Transition and Handover Smoothly

Bringing an Outsourced Software Development Function In-House: How to Transition and Handover Smoothly 

Many start-ups, especially start-ups with non-technical founders, will begin their journey by outsourcing their software development to an external agency. This is often the quickest and most cost-effective way to get software and technology built and working, without having to hire a full team of developers. However, there comes a time in every business journey when it starts to make more sense to bring that development entirely in-house. The biggest question then is how to make the transition as smooth as possible to ensure nothing is missed. 

What are the benefits of an in-house development team?

Bringing software development in-house has a variety of benefits, with business owners enjoying their constant availability, knowledge of the business, and loyalty to the company, amongst other things. If a business starts to lose momentum or slow down as a result of an outsourced development function, bringing that function in-house can improve the following areas. 
Quicker Delivery: Because an in-house development team is always readily available and aren’t distracted by other projects for other companies, like agencies can be, they can immediately action any requests and start any development requirements immediately. This means projects, features, functions, and fixes can be developed and released much quicker.

Business Knowledge and Loyalty: in-house developers will have great rapport with the people around them, will understand the culture of the business, will have commitment to company values and visions, and will know how to address and escalate any issues. All of this internal knowledge, and the fact they really want the business to succeed, will empower the Developers to highlight gaps and make suggestions for process and product improvements. Unlike agency workers who are working for multiple clients, in-house developers will be fully committed to your projects and your vision. You have greater buy-in from your in-house team and you can develop and mould them to what you need.

Budgeting is Easier: when a business outsources software development, anything that falls outside of the pre-determined contractual obligations or agreed terms will incur additional costs, which can build up into huge bills. This is problematic because as you grow your requirements will change, and the size of your projects will change, which may render your original agreement inadequate. With an in-house team, you don’t need to worry about those additional charges, especially with the minor changes that need deploying rapidly. Your development team will be flexible and will adapt and change with your business, with no hidden costs.

How to Transition to an In-House Development Team

Why do you need an in-house software development team?

First of all, you should ask yourself why you are bringing in an in-house development teams and weigh up the pros and cons in relation to your specific business. This includes revisiting your specific development goals and investigating how an in-house team will help you achieve those more efficiently than an outsourced agency. Once you have a clear vision for what you want your in-house development team to achieve, you will be able to decide on how fast you want to make the transition and cultivate a recruitment strategy in terms of what skillsets and types of developers you need first.

Hiring a CTO

Once you have established that bringing your software development, you need to hire a technical CTO who is capable of fully grasping all aspects of the system architecture, your technical requirements, the product roadmap and how to get there, and who you need to hire. A great CTO or Technical Director will be able to identify any immediate weaknesses in the plans or documents that need addressing immediately, and then decisions can be made around when to start the transition from outsourced to in-house.

Product Definition and Documentation

The product, software and intellectual property rights may be owned by you, but there is still a lot of work to do during the transition, which is where having a great technical CTO/ Lead in the business is beneficial. The Tech Lead / CTO should ensure there is full and accessible documentation for everything, this includes functional specs and all technical documentation. This should act as a ‘Wiki’ or a manual to the product, meaning that when you start to grow you in-house software team, they all have a point of reference for how the product works and what to do if something goes wrong.

The actual code of the product also needs checking to ensure all legalities and governing standards have been met by the outsourced team, and any issues should be immediately rectified. This ensures that the bar is already set ready for your in-house team to take on.

Prioritise Your Future Hires

Not every business is in a position to hire a full software team at once. For many businesses they will hire gradually to build up a robust software function. In order to do this efficiently, the Tech Lead / CTO should advise on who to hire first, based on the product goals and roadmap. They will be able to identify what skillsets you need first and advise on hiring accordingly to ensure you hit project and product deadlines, and to keep your business moving in the right direction. 

You should also then decide how quickly to transition. Do you want to go fully in-house, or do you still want to outsource some of the basic day-to-day tasks for now? Either way, you should consider setting up a meeting with both your in-house team and outsourced team to make sure any handovers are completed in the highest amount of detail to ensure nothing is missed. These conversations are crucial to a smooth handover.

How quickly you transition, and if you opt for a hybrid model, will be different decision for different businesses, depending on their goals, vision, and budget.

Hiring Challenges when Building a Software Development Team In-House

There is a talent shortage for Developers, and it is becoming increasingly challenging to hire the top tech talent as the demand continues to eclipse the supply. This shortage means that Developers have their pick of companies to work for, and candidate attraction and retention becomes fundamental for filling those software development skill gaps. As Broadbean and the BBC reports a record increase in vacancies with a record fall in applicants, it’s clear to see that simply advertising new roles is no longer enough, and traditional methods of recruitment aren’t going to find you the top technical talent you need. 

Maxwell Bond are the award-winning specialist tech and digital recruitment partner of choice for the UK and Germany, identifying and recruiting top tech talent from mid-level to C-suite positions for businesses of all sizes. We have recently placed 2 Senior Leadership positions within four weeks for two of our clients, whilst also filling a full tech squad to deliver on an urgent software project. Hiring can be a slow process and top tech candidates can be hard to find, which is where we come in to provide bespoke staffing services that cuts costs and saves time.

Partner with Maxwell Bond to tap into niche, exclusive software talent to drive your business forward. Contact me directly or drop me a message on LinkedIn to discuss how we can tailor our services to support your growth. 

Alternatively, browse our current software development and engineering vacancies here.