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In-House or Outsource Development?

In-House or Outsource Development?

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In today's ever-evolving market, companies worldwide are recognizing the immense benefits that blockchain-based solutions can bring. However, when delving into this cutting-edge field, a crucial question arises: should you opt for an in-house blockchain development team or outsource the expertise? This dilemma isn't exclusive to young entrepreneurs or startups; even established mid-sized and large companies face the challenge of maintaining and supporting their existing blockchain solutions to propel their products and services to new heights.

 

In this article, we aim to address the common questions surrounding in-house blockchain development versus outsourcing, shedding light on their differences. We'll explore the types of businesses that stand to benefit or lose from each approach, enabling you to make an informed decision regarding the optimal model for your blockchain development endeavors.

 

 

Pros and cons of in-house blockchain developers

 

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When considering who to entrust with blockchain development—your in-house team or outsourcing—let's examine the advantages of both options. It's important to note that assembling a dedicated blockchain development team is no easy task, given the high demand for skilled professionals in this field. Prepare yourself for a fierce competition when vying for the talent of a proficient blockchain engineer.

 

Pros of In-house blockchain developers

 

If you are able to get a competent expert, you will have more influence over the development process and the end result. You can exert effective supervision of both the team and the development itself if you keep the job in-house. Furthermore, timely input from your engineers enables quick and efficient course adjustment.

 

In addition, an in-house team may encourage greater competence and specialisation in a particular subject area. Internal specialists build their expertise as a result of frequent exposure to comparable issue scopes, becoming highly focused experts in the sector. This increased expertise translates into better work quality and a more efficient development process.

 

Another benefit of in-house development is the project's technical independence. By retaining essential technological capabilities inside your organisation, your project gets independence from external specialists. This has an influence not just on the development process, but also on your team's technical support skills and capacity to sustain the product or service over time.

 

Having an in-house staff under your command enables you to provide fast orders and make modifications. You have the power as team leader to offer immediate feedback and directions about the working process or project scope. This flexibility comes in handy for implementing last-minute alterations.

 

Furthermore, choosing an in-house blockchain development strategy may help with product maintenance, saving time and money on continuing service and upkeep. With the same team in charge of your product after it's out, there's no need to waste time describing what's wrong and how it should work.

 

Cons of In-house blockchain developers

 

However, it's important to acknowledge the downsides of building an in-house blockchain development team. It comes with substantial costs, necessitating significant investments of both financial resources and organizational efforts. Particularly during the initial stages, expenses such as equipment, insurance, premises, social packages, and taxes can be overwhelming. Additionally, even during periods of forced or natural inactivity, your in-house staff still requires compensation, resulting in ongoing expenses. In most cases, an in-house blockchain development team proves more costly than alternative options.

 

Furthermore, the risk of retaining your own in-house developers is significant. Despite investing substantial amounts in finding and nurturing internal specialists, they can always be lured away by competition or pursue their own projects, leaving you to recruit and invest in new team members once again.

 

While higher specialization among your staff is advantageous in terms of performance and effectiveness in a particular field, it can pose challenges when changes are required due to external or internal fluctuations. This lack of flexibility and reduced work speed hampers your company's ability to stay ahead in the market. Moreover, handling such changes may require additional expenses for engaging external specialists.

 

Lastly, finding skilled blockchain specialists is a considerable challenge, as it typically takes months, if not years, to identify suitable candidates in this field.

 

 

Who benefits from In-house blockchain development team?

 

To make an informed decision, you must consider who will benefit from in-house blockchain development versus outsourcing. As previously mentioned, building an internal blockchain team demands significant financial resources and a substantial investment of time from the outset. Therefore, you need to assess if the advantages outweigh the costs.

 

An in-house blockchain development team is well-suited for projects requiring extensive product development. For example, consider Polkadot—an exemplary project that demands scalability and constant maintenance from a large team of developers due to its interaction with existing networks and upcoming projects. However, it's crucial to highlight that skilled senior blockchain developers are currently scarce due to the young market and limited expertise in several blockchain technologies. Finding highly proficient blockchain developers may take several months or even a year when building an in-house team.

 

 

Pros and cons of outsourcing blockchain development

 

We believe that outsourcing blockchain development outweighs the in-house approach. Outsourcing has already proven its utility and cost-effectiveness for businesses of various types and sizes, particularly in narrow markets where securing qualified specialists for required tasks can be challenging.

 

Blockchain remains a rapidly evolving niche, and there is a scarcity of developers with strong technical knowledge and substantial experience. In this context, outsourcing becomes a prudent choice when searching for blockchain specialists becomes a difficult task.

 

By engaging a reliable outsourcing blockchain company, you gain access to an experienced team with diverse skills and competencies. These teams can effectively handle various tasks. Let's delve into the advantages of outsourcing blockchain development and the potential drawbacks.

 

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Pros of blockchain outsourcing

 

Streamlined and optimized development processes are among the most significant benefits of outsourcing. Established outsourcing development teams have well-defined and efficient processes in place. In contrast, a young company lacks such pre-established workflows by default, as it is newly formed.

 

Outsourcing offers a better Time To Market (TTM) index. When outsourcing, you gain access to a ready-to-go, highly experienced team without the need for time-consuming staffing processes. This significantly saves time and effort, allowing you to bring your vision to the market faster and with less hassle.

 

Furthermore, outsourcing enables easy and rapid workforce scaling. In situations requiring swift or temporary team expansion, you can seamlessly delegate additional tasks to outsourcing companies that have specialists with diverse capabilities and experience. In contrast, building an in-house team would involve arduous hiring processes.

 

Cost-effectiveness is a crucial advantage of outsourced development, benefiting businesses of all sizes. External specialists often come at a lower cost compared to building an in-house team. Moreover, their practical experience enables your company to respond faster and more effectively when faced with unusual challenges.

 

Outsourcing blockchain development not only offers faster TTM but also saves time on hiring and team management. By outsourcing, you gain access to a tightly-knit team ready to tackle your project. In contrast, assembling an in-house team requires extensive time investment in the demanding process of headhunting.

 

Additionally, outsourcing companies often have a rich arsenal of tools and technologies at their disposal. Their experience with projects from various spheres enables their programmers to offer a wide range of specialized skills and technologies. By examining the company's portfolio and identifying a similar project to yours, you can ensure they possess the necessary expertise.

 

Cons of blockchain outsourcing

 

One downside of outsourcing is that technical expertise remains external to your company. However, this may not be critical if engineering is not your enterprise's main area of innovation. You can choose to outsource less critical and more routine aspects of your technology while retaining key components for in-house specialists.

 

Another potential challenge with an external team is lesser control and direct communication with team members. This may result in miscommunication and reduced transparency. However, choosing the right contractor and establishing effective communication procedures and reporting mechanisms can mitigate this issue.

 

Language barriers can also hinder effective communication when working with specialists from different parts of the world. Despite English's global popularity as the primary IT language, misunderstandings can still occur, leading to lengthier discussions during the discovery stage.

 

 

Why hire an outsourcing blockchain development company?

 

Outsourcing your blockchain project is a sound decision for several reasons. Firstly, by outsourcing, you gain access to a well-organized team with diverse skills and technologies in their portfolio. Secondly, outsourcing companies bring valuable experience from similar projects, enhancing team creativity and offering flexible approaches. Consequently, you can deliver a competitive solution while saving costs and time.

 

 

Hybrid model: Outsourced + in-house approach

 

At times, determining whether in-house or outsourced development is superior can be challenging. The blockchain market has experienced significant growth, resulting in the emergence of greater tools, newer technologies, and blockchain programming languages. Consequently, a single specialist or a small team may struggle to cover all requirements adequately.

 

In such scenarios, employing third-party specialists becomes necessary. In this context, adopting a hybrid model that combines the expertise of your in-house developers with outsourced blockchain developers can prove beneficial. This approach fosters more efficient planning and analysis, allowing you to delegate tasks to each team appropriately and optimize costs.

 

However, this model may present challenges in terms of communication between your employees and outsourced developers, including language barriers, time zone differences, and cultural predispositions.

 

 

Conclusion

 

As you embark on your blockchain journey, it becomes imperative to choose between in-house or outsourced blockchain development. In the fast-paced world of blockchain technology, speed is often paramount. In such cases, outsourcing your blockchain development proves to be the optimal solution. This approach is suitable for dApp development, DEX creation, staking platforms, smart contract implementation, and custom blockchain development for enterprise solutions.

 

However, when building a highly scalable project entirely dependent on blockchain and requiring ongoing maintenance, an in-house approach may be warranted. Examples include projects based on established chains like Ethereum, Polkadot, Near, EOS, and others.

 

Despite the potential benefits, adopting an in-house model carries significant risks. Therefore, many entrepreneurs find it prudent to outsource their blockchain ecosystem development to reduce costs and save time. Our successful use cases demonstrate how implementing a comprehensive blockchain ecosystem can be accomplished through outsourcing.

 

At Alchemis, we have been building our team since 2016, amassing extensive experience and knowledge in the blockchain field. One of our greatest assets is the ability to work on multiple projects within the same field while concentrating on different subjects. This advantage distinguishes outsourcing blockchain development from in-house approaches.

 

Unlock the potential of blockchain technology by making a strategic decision—whether to embrace in-house development, outsource to a reliable partner, or adopt a hybrid model. With careful consideration and alignment with your project's scope and requirements, you can harness the power of blockchain to drive your business forward.

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