While having an option to outsource some of your R&D work is always a benefit, giving flexibility to project resourcing, software outsourcing is not without it’s caveats.
It is quite obvious, that outsourcing is a must when you do not have your own software people. If you need a business application tailored for your needs, outsourcing is almost always the only way to go.
But the practice of outsourcing software projects has become increasingly popular also in R&D organizations, where the resulting software will become part of the product that the company’s success depends on. In this case it might be worth thinking twice, before taking a look at those low cost regions, where price of a man month is tempting and project cost looks absolutely fabulous on CFO’s Excel sheet.
If you are thinking about outsourcing, you probably need it and maybe you also should give it a try. But first, take a serious look at what parts of your system you can buy without loosing insight of your own application and especially your core know-how.
Key to successful software outsourcing is to identify which parts of the project can be outsourced without loosing an opportunity to increase your team’s expertise, and at the same time, free your resources to more productive work.
Outsourcing your R&D work is always a business decision. While it may be difficult for the management alone to identify which parts of the project can be efficiently and reliably outsourced, it may be equally hard to convince software teams, that outsourcing can be a good way to focus to what is most important for the project and company’s success.
This is why mutual understanding between management and R&D is important. Make sure everyone knows why a certain portion of your project can and should be outsourced, and why it is a good thing for everyone.
If you are unable to do that, don’t outsource.
— Timo Ylhainen, Tikkabit Ltd.
Maybe you have thoughts about software outsourcing in R&D projects? I would love to know what you think. You can reach me by email at