Extended Teams vs Software Outsourcing: What works best for scale-ups?

By Jonathan Francis

Development capacity can make or break your business. For your company’s next growth spurt, you need your software development to be streamlined, efficient and most of all, scalable. But, what’s the most resourceful method of doing so?

Most often software outsourcing is an attractive and popular choice for scale-ups looking to expand their development capacity. In this blog, we highlight the differences of software outsourcing to an extended team model, unravelling the best fit for scale-ups.

Gapstars Frequently Asked Questions

The benefits of outsourcing for scale-ups:

For a scale-up, it is common to consider software outsourcing instead of continuing in-house software development to fuel their growth. This is often the preferred choice due to:

  • War on talent – The lack of qualified developers in the Netherlands to fulfil the growing demand. Outsourcing provides better access to a global talent pool and a faster hiring time.
  • Scale fast – The ability to scale faster with shorter delivery time.
  • Overhead – The fact that there is less time and money spent on finding and maintaining developers.

The drawbacks of outsourcing for scale-ups:

More and more scale-ups are experiencing that software outsourcing also has its drawbacks.

  • Lack of control – Lack of control over day-to-day development is the main issue with outsourcing. Oversight of the development process is essential, especially if the technology is at the core of your business.
  • Delivery of a low-quality product – With developers handling multiple projects, the quality of output can be compromised. Less priority and commitment to achieve your scale-up goals.
  • Lack of continuity – The need to change and iterate the software as you grow is paramount for scale-ups. An outsourcing set agreement will not provide flexibility for continuous improvement or changes. 
  • Information security – Key information can be compromised with short term commitments and contracts. Fewer precautions, carelessness and irresponsibility can lead to information vulnerability.    
  • Cost overages – With outsourcing, product changes are often charged separately. Improvements to your product can thus extend your development costs way beyond the budgeted costs.

Scale-ups need the same level of control an in-house team offers, but with the fast access to expertise that comes with outsourcing. At Gapstars, our extended team model is powering award-winning scale-ups such as Harver, Temper, Otrium and Fixico in the Netherlands overcome these challenges.

Harver’s Extended Team visit Netherlands HQ

To shed some light on why our model works, we’ve made a list of key areas on how our model is different to outsourcing and why it is ideal for scale-ups.

Our Model (Extended teams)Software Outsourcing
Recruitment You will personally interview and approve the software engineers we source for you.Developers are selected for you by the service provider. 
Developer Commitment Developers are your full-time employees and are a direct extension of your team. They become part of your cultural DNA and are fully dedicated to your business success. Developers are project-driven and are limited to the success of the project. There is less buy-in and ownership.
CommunicationYou communicate directly with your developers. There are no intermediaries.  Daily communication happens through a project manager or account manager. This can slow down work and can be very frustrating when project deliveries are not met.
Access to talent rangeThe skills you require will be met with our custom recruitment process. We have a strong and established talent pool in the local market.Often based on availability, you will be limited to developers’ skill sets based on the talent pool.
ExpandAs with every scale-up, you are likely to grow from 3 developers to 6 or 10. We have already built multiple teams of over 20 developers and can help you grow just the same way.Depending on the scope of work, developer hours will be added. With no control over the developers, you will only monitor tasks completed.
FlexibilityWorkstations, branding, IT support or training, we can provide you with whatever your team might need. You can focus on what matters: growth and delivery. You are always welcome to visit our offices and work alongside your software developers or bring them over to your headquarters. We are happy to accommodate this.You will be limited to completing the project tasks and will have no control over the process. Services are standardized at the time of signing the contract.

Now, we are not saying that outsourcing is bad as a concept. Outsourcing would be a good choice if you have a single task of development or a non-tech centric business. However, if you are a tech scale-up and you want to have full control over your software development process and to have a fully dedicated team of software engineers, setting up your own extended development team with Gapstars is the better solution.

Gapstars scale-up experience with Fixico, Otrium and Harver

We help young ambitious scale-ups in search of top engineering talent with skilled software developers in Sri Lanka and organize their workspaces in our fully-equipped offices located in the country’s capital, the city of Colombo.

Read more about Harver’s scale-up story with Gapstars.