In-house Vs Outsourcing Software Development in the Travel Industry
The travel industry has explored beyond general expectations the potential that incorporation of technology can do for the advancement and prosperity of the sector. And time and time again, the possibilities bore fruitful results. For instance, between 2015 and 2020, the online travel agency (OTA) market share reached a value which was 7.9% higher than prior observation.
By 2023, the OTA market is predicted to rise by 14.8%. Hence in the travel industry, the need for constant development and improvements of all types of modern online technology by a strongly competent team is paramount. However, it’s time to face the important question of which route to choose, in-house development or outsourcing.
This decision lies firmly on some factors, namely, project objectives, scope and the competency of the in-house tech experts. In this article, we will try to analyse the pros and cons of in-house development or outsourcing to consider before choosing the approach that is right for your travel business.
But first, let's make sure we fully understand what is in-house development or outsourcing,
In-house Development
Building a team within your company which is deeply integrated into your business processes, share similar company values, and has in-depth knowledge about the sector, like the travel industry, is called in-house development.
Outsourcing
Enlisting the services from external software suppliers whether domestic or foreign for their software development needs is known as outsourcing.
Now here, we will list some of the important factors that play vital parts in the functionality of both approaches.
Concentrated Workflow
In-house: Con
It takes a lot of time for Business owners and management to build an experienced team for any particular job. And especially when it comes to recruiting a development team, the experience and work ethics differ from person to person. The hiring process itself can be time-consuming and it distracts the management from the business core.
Outsourcing: Pro
Outsourcing can be a lifesaver for people and businesses who are novices in IT and software development. As companies or teams who have a well-established and dedicated development process, once you express your requirements the project development should be a piece of cake.
Cost
In-house: Con
Building and maintaining your own development team in your company is not always the most cost-effective option. Some people think if they have an in-house team they can do as many projects as they need as the requirement arises. However, working on a single project can take months to complete. So you basically end up paying the cost of outsourcing to an entire in-house team, but monthly. And with higher experience also come higher salaries then you also have to consider other expenses like taxes, licensing and rent.
Outsourcing: Pro
Developing countries like India, Ukraine, Belarus and Bangladesh are often considered for outsourcing as the salary margin there are less compared to the ones in North America or Western Europe. So even with the same or higher level of expertise, quality and productivity, they don’t charge as much. Along with no charges for recruiting and maintaining an in-house team, outsourcing seems like the better option.
Team Management
In-house: Con
Nowadays highly-qualified HR professionals are required to handle a team of talented recruits as the competition to acquire talents is higher. To build a team of competent players the HR or talent acquisition managers in IT are now trying to sell their companies to possible recruits with offerings like bonuses, frequent salary revisions, corporate events, special healthcare programs, free gym facilities, etc.
Outsourcing: Pro
When you are outsourcing, your project is halfway done since your IT partners already have a team of talented recruits. And you can add or remove specialists allocated to your projects without any hassle.
Team Stability
In-house: Con
The recent job market has been actively seeking out experienced and talented software developers. Hence with a large number of job opportunities available out there and more to come in the future, maintaining the stability of a loyal team is almost impossible. And software delivery can be delayed by competent staff shortage.
Outsourcing: Pro
When it comes to maintaining a stable dedicated workforce for any particular long-term project, IT software and service providers can always find a way to retain software development talent. They possess an in-depth knowledge of the IT labour market and they use it to sieve out qualified engineers from the job market.
Security and Supervision
In-house: Pro
Since in-house developers work with the organisation full-time, regular face-to-face communication can help the company officials to manage and supervise the team more easily and thoroughly.
Outsourcing: Con
Intellectual property protection plays a huge part in this. While choosing a vendor, extra care and research need to be conducted, so you don’t fall victim to any industry blunder. Proper legal protection like NDA contracts must be applied to avoid such instances at all costs.
Communication Channel
In-house: Pro
As in-house developers have in-depth knowledge of your project, they are more flexible and quick to respond to any software challenges that may arise. This increases productivity since in-house developers are motivated to deliver software, that caters to the company’s needs and can be integrated into the existing technology effortlessly, due to loyal to the company.
Outsourcing: Con
Time differences and language barriers are major obstacles to maintaining a proper communication channel. Most often the outsourced developers can’t communicate with the client about the software requirements as they don’t speak a common language. Even if this problem is handled by the project manager, the time it will take for the client to find a problem or state a concern to the vendor and then for the developer to respond to it and take necessary actions, can be very lengthy, especially if they are in different time zones. This case of communications gap will not be a big issue if the IT vendors have a wider geographic footprint.
Now, if you choose the outsourcing approach for your travel company then check out some factors to consider before you select a Travel Technology Vendor.