Own IT team or software house – what to choose?

02.12.2022 Angelika Siczek
team in front of the computer

Many entrepreneurs are interested in developing their own electronic sales (e-commerce) platforms. These people are in a dilemma whether to try to create a team of IT specialists within the organization, or decide to cooperate with external entities. The latter include software house companies, but also specialist freelancers or IT agencies. In practice, the most common question is what to choose: a software house or your own corporate solution.

Software house – what is it??

When attempting to answer the question of what a software house is, it should be pointed out that it is a specialised company that develops software. Such companies may focus on business or consumer software. Today’s software houses provide specialised solutions and thus advanced services and products in the field of IT development.

A typical characteristic of a software house is that it focuses on the development and distribution of software. However, it is important to emphasise the diversity of objectives for different software houses depending on their current customer base or specialisation in providing solutions for a particular market. There are software houses that develop services and create products as subcontractors to corporate clients, but equally there are IT companies that create finished software that appears on shop shelves. Each of the aforementioned approaches to business operation involves slightly different rules and conditions when it comes to design, distribution or product development processes.

According to another division criterion, a software house can function as a product or service-based company. Product-based companies are those that develop their own products and then deliver them to the end customer. It is not uncommon, for example, for these to be technological innovations that contribute to the improvement of business in a particular industry. Service-based software houses, on the other hand, work directly with other companies and provide them with services such as custom software development, consultancy or dedicated development teams.

Own IT team – strengths compared to a software house

Among the strengths of an in-house IT team compared to a software house are the in-house employees’ better knowledge of the organisation’s mission, development vision and goals than those of an external company. The stability of such a solution for the enterprise is also of great importance, because the entrepreneur does not have to worry about breaking cooperation or delays.

The hierarchy of IT positions in your own team makes it easier for employees to find themselves in it and to fulfill specific tasks. There is justification for many positions in the IT industry, and an entrepreneur setting up his or her own project team has a great deal of flexibility in selecting preferred candidates depending on different project objectives. IT job descriptions are required here so that employees successfully fit into the newly built team. Each person should know what tasks they are expected to carry out as part of their teamwork within a particular company. 

Weaknesses in building your own IT team

It is worth mentioning the weaknesses when it comes to creating your own IT team instead of working with a software house. First of all, not every entrepreneur will effectively define the roles in a project team or the goals of such a team and the required resources to achieve these goals. Similar restrictions do not apply to team leaders carrying out tasks within software houses.

Another obstacle may be the lack of capital to create a sufficiently large IT team within your own organization.

The selection of team members may significantly stretch over time, which generates higher costs for recruitment, selection of candidates and their professional adaptation in the new organizational environment.

On the other hand, in the case of small-scale projects (such as the development of a shop’s website), there is no need to build your own IT team at all and cooperation with a software house is a more economically justified solution.

Software house – sources of advantage over your own IT team

Given the previously mentioned barriers and limitations to setting up their own IT team, many entrepreneurs want to cooperate with a software house on a more or less regular basis. The choice of a partner depends on the specifics of the project, the budget and the lead time of the project.

The entrepreneur should also do research and make a preliminary list of software houses that can most effectively meet the needs of a specific project. In the digital age, there are relatively large opportunities to check the portfolio and market experience of such a potential cooperation partner.

If an entrepreneur takes advantage of cooperation with a software house and chooses not to create his or her own IT team, he or she can be sure that the people carrying out the project will not be IT employees without experience. Today’s software houses place great emphasis on attracting specialists and talent, having a capital advantage over small project teams in small and medium-sized companies. This means greater efficiency in attracting talented employees willing to share their own knowledge and experience for the right salary.

An equally important advantage of a software house over its own IT team is usually access to more advanced hardware and extensive technological facilities. This allows software houses to carry out diverse IT projects tailored to the needs of companies in different industries.

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