Insourcing vs outsourcing - build in house or outsource PHP development?

For many years, PHP development has been a very popular service in software development. Developing solutions in which PHP is an integral part of the software development is always a complex undertaking. A huge number of individual tasks in this server side scripting language requires the right mindset, team members, decisions, and a long-term plan based on rational arguments. Having a good method of hiring developers can be a huge advantage. After all, in software engineering it's the final result that counts.

One question that organizations often face is how the project, or at least part of it, will be implemented. Whether to run the project with an in-house team that you know and can rely on or to hire external, highly skilled PHP specialists - the answer to this question can determine whether the company's efforts will be successful. Since time and money are among the most important resources, business owners should be guided by fact-based arguments and know the differences between the two methods of cooperation.

To outsource or to insource...

So, in this article we will take on a significant topic: in house vs outsourcing – what they are, how they differ from each other, what their pros and cons are, and if there is an optimal way to hire the best PHP professionals to get the job done. Both ways have their advantages and disadvantages, so it is worth taking a more detailed look at them to get the right level of software services.

Having an in-house team in a project. Is this something we can call insourcing?

Many times, business owners who want to achieve business growth expand internal IT teams to increase the human resources needed to complete projects. When a company gives tasks to its in-house staff, we call it insourcing.

Employing a dedicated in-house team is sometimes seen as the only right way to perform tasks safely. Is security the only reason companies hire their own team? If we looked at what the cost of hiring an in-house team is, we would find that surely companies must have some other reasons.

What are the benefits of insourcing PHP developers?

✅ Faster communication

Talking to business heads, you can come to the conclusion that one of the most important issues, especially for the older generation, is the close contact with each other. Having an inhouse team often gives the feeling that contact between team members will be much easier due to the distances between individuals. This is often the same for in-house teams that work remotely.

On the one hand, there is some physical distance between them. On the other hand, however, these teams frequently work closely together so that they can arrange an effective communication process. As a result, their communication runs more smoothly.

✅ You can build a culture with your team

It is widely believed that selecting your people for a project is an important part of team development. When you choose the right members yourself, you can have a good rapport with them, and you can also structure your communication well. You have an opportunity to make selections according to skills and experience, but also see how they match in terms of personality.

As a result, it's much easier to form a specific culture within the organization when each developer is part of your team.

✅ Potentially greater security

When you have a dedicated team of developers built and hired for specific tasks, you can be certain that there will be no need to share your data or project details externally. Your team, whose job is to do what you expect, works in a closed environment of people who share common goals and exchange data in a controlled manner according to company policies. This helps minimize risks.

Are there any disadvantages of insourcing?

Businesses know that hiring inhouse people for PHP development can be challenging if they want to build their team for a long-term project. They need to take care of all business functions, so it's worth checking what they may lose when they insource software development all the time.

❌ High costs

Technology and everything around it are an investment. And the truth is that building a dedicated team of PHP developers is not a simple task if you want to stay cost effective. Recruiting for positions takes a lot of time spent on interviews, analyzing resumes, and verifying team fit. Especially if you want to get the best talents. At the same time, once we hire candidates, we have to remember that their salaries will often be very high. Whether they do something or not, you still have to pay them.

Additionally, to the cost of maintaining an employee we have to add such things as the cost of the office, training, licenses, insurance, additional benefits, etc. Not to mention, of course, that we have to spend a lot of time each month on such things as code review and monthly summaries.

It's also worth noting that if your company doesn't specialize in software development, you may also incur costs associated with inefficient team management and operate less efficiently.

❌ The number of php developers in the market is limited

Using PHP in web applications is obvious in the vast majority of companies. It is also true that virtually every company would like to have access to top-notch specialists with years of experience who can create quality code. Therefore, candidates with the most expertise find employment quickly, which unfortunately causes other companies to spend long hours looking for the right developers.

❌ Less scalability

The truth is that the average salary of PHP developers is high, and at some point a company can no longer look at short-term goals. In software development, we need to look ahead and know how much we will be able to scale our business so that projects bring in more revenue. Hiring more engineers for a PHP project is connected with growing costs and the fact that it is not easy to suddenly change developers due to changes in projects. This in turn makes scaling the business potentially problematic.

❌ Less flexibility

It is also true that at some point the project may end or change. Then a situation will arise where you will have to lay people off. This, in turn, may cause you to waste time and additionally put you in the difficult position – you have to fire people. Working with an outsourced team gives you the freedom of simply not buying additional hours when the project ends.

What is outsourcing then?

Outsourcing is a certain business strategy in which you can use the knowledge and skills of an outside supplier to complete part or all of your project. Outsourcing development, if properly thought out, allows businesses to achieve great results in development process. Such an approach has become popular due to the changing marketplace and the growing awareness among organizations about process optimization.


What are the benefits of outsourcing?

✅ Costs under control when you scale your business

Hiring an outsourced team for web applications involves reducing the costs that a company would normally incur by hiring full-time engineers. When enterprises choose to outsource external developers, they know that outside specialists do the same work, but without the benefits, paid vacations, additional insurance, etc. Therefore, it is possible to maintain the quality of work while optimizing expenses and cashflow.

✅ Increased efficiency

Today, there are quite a few outsourcing companies in the market that specialize in various technological areas, including PHP. When you contact such specialists, you can detail your expectations regarding the knowledge and skills of the programmers to sign a contract with a company that will match the requirements of the project. It is also important to note that software houses that specialize in PHP technology can manage the entire process more effectively because they have the right knowledge and experience. They can also anticipate many problems that may get in the way.

✅ Broad access to talents

Due to the high popularity of outsourcing services in various industries and the effectiveness of this type of services, there is a wide range of specialists in each IT field on the market. Therefore, clients looking for this type of service can expect to find the right PHP developers in a short time.

Are there any problems with outsourcing PHP developers?

Of course, as with everything, with this type of cooperation there can also arise various challenges, especially if we do not have experience in such a cooperation, and we don't find the right IT partner. Web development is demanding, and clients should seek companies that understand their context, know all necessary frameworks and ensure the appropriate amount of support.

❌ Potential communication problems

It is worth mentioning that external employees are not part of the client's team, so they work at their pace and according to the rules set by their organization. When a member of your team needs to consult some issues with someone from the outside team, sometimes they may face communication difficulties. If the cooperation with such a team is not well arranged, delays and misunderstandings may occur. To reduce such risks, it is a good idea to establish specific cooperation principles and rules on how to communicate from the very beginning. This way project management becomes easier and outsourcing your PHP project gives better results.

❌ Time to get to know your company

Having PHP technology expertise is one thing, and understanding schedules or expectations to establish the right processes and tools is another. If the outsourcing company doesn't have the right experience, it can take them quite a long time to get to know all the details. Therefore, it is crucial to find someone who has proven methods and can arrange all the necessary issues together with the client quickly.

In-house vs outsourcing - is there a winner?

Some people try to make a clear distinction between the strategies and decide whether one way or the other is better. The truth is – both methods of hiring developers have their pros and cons. However, there is a certain way that provides the optimal combination of internal strengths with the professionalism and ideas of external contractors. It's the combination of insourcing and outsourcing in an optimal way.

Combined collaboration

What are the advantages of combining in-house with outsourcing?

✅ Company's employees can focus on their projects, which makes them work faster

Outside developers can ease the burden on your engineers, who can focus more on their current projects. Establishing a specific scope of work, scheduling in advance and preparing the right tools allows you to create a very well-integrated system of cooperation between the two worlds. Thanks to such a combination, companies for which the speed of changes in project development is a competitive advantage, can reduce the time needed to implement individual elements of the project.

✅ Every outside consultant brings something your developers can learn from

An outsourced PHP team is a collection of people who bring their experience, knowledge, resources and ideas to your company. The more time your employees spend with outsiders, the more likely they are to learn new things and feel inspired to create something they may not have thought of before.

✅ You can outsource new projects to get bigger quality

Combining insourcing with outsourcing can also help with new projects. A fresh look from an outsider can be a good stimulus to make a project with a more adapted technology, which will eventually translate into the result of a better working solution.

✅ You can focus on better performance

Hiring a permanent team comes with less flexibility because you hire a permanent team and need to assign people permanently to projects. In contrast, outsourced teams don't need long-term contracts and can appear at selected stages of the project. Thus, eventually, you can optimize software development and select people at the right times when there is a need for support. This is especially valuable when the situation requires you to make quick decisions about scaling your team for specific projects that come up.

How to choose the right outsourcing partner for software development

✍️️ Prepare a concrete action plan

Hiring an outside entity is sometimes seen as letting in another company that will create new rules and take over your kingdom. To avoid this type of situation, you should decide what kind of work you'd like to outsource. Outsourcing companies can either take over single tasks from you or take on more responsibility for the project. This is one part of the flexibility of such organizations. The important thing is that you know what scope of work you want to outsource.

It's also important to create a specific time schedule and agree on all details. After all, you are going to pay your outsourced team for creating software at a specific time and under specific rules. Software houses that have experience in running projects as external contractors focus on quality, support and will treat this approach as something natural.

✍️️ Think about what kind of expertise you expect

Depending on your needs, you should hire a software development company that has a specific range of business and technical expertise. On the one hand, you may be dealing with organizations that have a very narrow range of knowledge in PHP. On the other hand, you will meet companies that operate very broadly and have a broad range of technologies or PHP frameworks in their offer. Such a partner should be open to technological development and understand business things such as business analysis, product roadmap, product design and product owning. It is significant because in case of any changes, it will be easier for your partner to adapt to the evolution.

✍️️ Think about the reputation of your potential partner

It is worth noting that when you outsource PHP solutions, one of the most important elements is to know and verify the reputation of the outsourcing company. Getting the job done is one thing. The other is that you will be working with this company for some extended period of time, so all elements count. Does the company deliver quality, have good communication, can they set up an effective process and so on. These factors are important benefits and will have a big impact on how the service will be delivered.

✍️️ Understand the costs to minimize financial risks

When outsourcing your PHP projects, you want to remain cost-effective, so naturally an important part of the conversation will be how much value you're getting that bears an appropriate relationship to what you're paying. Starting this topic early on is a good custom, as precisely defined terms in software engineering ensure the success of the entire plan.

For more details on how to choose a partner and when to outsource IT services, check out our other blog posts:

What could this type of combined collaboration look like?

Team management is the art of creating effective solutions. Things helping to eliminate certain problems that can arise when only one of the chosen forms of team building is used. For example, in-house teams may feel burnout when it turns out that too much work is put on them. After all, no developer will do their job well when the never-ending to-do list keeps getting longer.

The difficulty with outsourced specialists, on the other hand, is that the slightest miscommunication between the company and the external support can lead to a slowdown in software development.

Case study - supply chain management software

One of our clients was a German ecommerce company from the food industry. This organization has its system to manage the logistics of its ecommerce, which is developed by several teams. One of the challenges for the development team was that these people were dedicating their full time to the development of the platform. As a result, they did not have the resources or time to work on the integration of their system with partner services.

To stay cost effective, at the beginning they tried to solve the problem themselves. Then they realized that even the smartest talents and the best benefits won't help if they don't give their employees access to the right support. It was about making the right choice for their core business.

We met to talk about all the pros and cons, risks, money and all the outsourcing services that should be included in our cooperation. We also touched on credentials, costs, methodology, and we put together an effective collaboration plan that considers any potential changes that may occur along the way.

Thanks to the right combination of insourcing and outsourcing, we have carried out many successful activities in the PHP software:

  • We developed/implemented PHP connector for EDIFACT standard.
  • We implemented plugin architecture in PHP for adding future integrations with various shops.
  • We integrated our solution with their larger platform built in many other programming languages.

As a result, the client's developers gained many hours because they did not have to deal with the development part that we did and could focus on developing the main platform. What's more, other employees also got more time because now the tasks that they used to do manually were fully automated.

We achieved all this because we selected the right technological solutions and created a smooth, open communication between the outsourced team and the client's developers.

To sum up, many people wonder what form of hiring PHP developers they should choose for creating a web application. In practice, wondering whether to hire inhouse specialists or outsourcing consultants is not a good solution. The most optimal way of software development, which will optimize the whole process and eliminate risks, is to combine an in-house team with an external team of developers. When you outsource part of the project in PHP technology, your employees feel more control over their work and thus can be more productive. They can also increase their knowledge and learn teamwork by working with properly selected, well-qualified professionals. This, in turn, will affect both the project delivery time and the long-term results associated with the software development department.

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