In-sourcing vs. outsourcing tech roles

Should we outsource our technology roles? Or build an in-house tech team?

It’s one of those questions that’s constantly being asked, answered, re-asked, re-answered, given revised answers, ad infinitum inside banks and other business organizations.

If you are involved in tech staffing at your organization, you may have had two conversations about this topic already today!

But you don’t want a philosophical debate. You want a long-term solution. And that begins with understanding the work and your own organization.

What’s in fashion this year?

Typically, whatever today’s answer, it’s likely to be influenced by trends in tech staffing.

For a decade, the pendulum swings one way—Outsource!

Then, the momentum reverses, and the pendulum swings the other way—In-source!

Costs for certain skillsets, and the availability of cheap off-shore resources are common factors that influence the pendulum’s oscillation.

What people don’t think of

Missed in all of this is an immutable reality all companies need to be aware of.

There are two main tech “personality” types:

1. Steady state people

2. Project-based people

This truth—not trends or philosophical debates—is your best guide for tech staffing decisions.

Let’s consider each in turn.

What is a steady-state personality type?

The steady-state person enjoys maintaining and enhancing systems. He or she gets satisfaction out of knowing systems intimately.

Think of this person as the sort who knows every quirk of a company’s database and can recommend the best path to integrating it with a new utility.

This person deeply understands customer needs, and suggests and develops new features that fit the bill.

This individual is often a workhorse, who takes great pride in a job well done. While this type will generally keep normal business hours, if she knows that March is crunch time in the company, she’ll be sleeping on the server room floor to keep things running smoothly.

The key traits here are

• Deep pride of stewardship over a well-known system.

• Hard work along with predictability.

• Loyalty.

What is a project type?

Project-type tech people love to ride the rollercoaster of large project launches. In their world, the subject matter is always changing—and they relish it!

One year, they are developing a set of automated test suites for a finance company. The next year they are relaunching a database from its aging legacy platform to the latest open-source technology. Six months after that, they are developing a business-to-business mobile app to help workers in the field manage inventory.

The challenges are always different. The timelines are always tight. The risks are always high.

Project types thrive on independence. Also extremely hard workers, they like to manage their own time. It’s not unusual for a project-type person to disappear in the middle of the day. She scheduled her doctor’s appointment for 2 P.M. Why not? The wait is so much shorter in the middle of the day. Besides, at 3 A.M., she’ll still be coding.

At project launch, when something goes wrong and the business stakeholder is screaming, this person has nerves of steel. Aren’t launches fun!

The key traits here are

• Enjoyment of a terrain that’s constantly changing.

• Comfort with unpredictable working hours & a high tolerance for risk.

• Independence.

• Mobility.

Which do you want?

From a skills perspective, neither personality type is “good” or better than the other.

What is absolutely true, however, is that steady state types work best in-house. Unless you are a fast-paced, innovation-driven enterprise that is constantly launching new products and tech initiatives, project types will bail out of your bank after two years.

And in those two years, they’ll drive everyone crazy.

Common mistakes

Companies often encounter the need for a large tech initiative that is going to last approximately two years. As the new project gets approved, they decide to hire a team, who naturally tend to be project people. Time goes on, and the project gets done.

Then, when the project is over, the staff leaves. They just aren’t fulfilled when asked to perform the steady-state role on the newly launched system. 

Unfortunately, part of the reason the company decided to hire an in-house team in the first place was so they would be the experts on the system and manage it afterwards. Otherwise, they could have simply outsourced it!

Now they have to hire—and train—the steady state people.

Another common mistake happens when steady-state people contemplate that greener grass on the other side of the tech fence.

These folks might give up their in-house role to join a project-based tech firm for a while. But steady state people quickly flame out. Why? The former predictability of their lives gets blown to bits.

Maybe what you need is a blend

Here’s what generally works best, both for companies and tech employees: Identify an outsourced project team to deliver a new innovative technology. At around the 75% mark, start looking for people who will be happy to maintain and enhance your system in house.

Leave the philosophical debates about in-house and outsourcing aside. Look at the type of tech work required in your company.

Are you the kind of company constantly launching projects? Then you have a choice—hire an in-house team of project types, or hire a tech agency. Both strategies will supply you with the project types you need.

If your tasks are more like maintaining and extending existing systems, then steady-state folks are for you, and in-house roles work well.