In-House vs Outsourced Blockchain Development

In-House vs Outsourced Blockchain Development: What’s the Best Option for Your Project?

While it did not come overnight, blockchain has gradually and methodically grown into a premier technology and a legitimate go-to stack., carving a place for itself across a long line of different industries.

However, as blockchain-powered solutions continue to make waves across healthcare, FinTech, supply lines, real estate and other sectors, a vital question stepped into the spotlight: once you decide to dip your toes in blockchain development, should you be looking to hire in-house staff or simply outsource services from an external team?

As with all in-house development vs outsourcing debates, a quick glance suggests that building an internal team in charge of blockchain software development is a wiser business move with more long-term gain. Once you delve a bit deeper into the issue, though, numerous challenges unique to blockchain implementation start to pop up, unveiling that this is not as straightforward of a matter as first glimpses make it out to be.

The text below will help you dissect the dilemma of whether you should turn towards internal or external teams when starting a blockchain project. We’ll arm you with the know-how you’ll need to kickstart your product on the right note, as well as provide valuable advice on what to keep an eye on while assembling a top-notch blockchain development team.

An Unusual Talent Gap Within the Blockchain Market

What gives the current blockchain market a unique spin is that it currently hosts a significant talent gap the likes of which can not be found in any other IT field. According to recent studies, there are fourteen jobs per every single professional blockchain developer out there, meaning that there’s considerably more demand than what the current market can handle.

This glaring gap in talent primarily comes down to the general complexity of the field in question – after all, one would be hard pressed to identify a more challenging IT field to master. On top of that, blockchain is as cutting-edge of a technology as they come, so constant training is definitely needed if a developer wishes to stay at the top of the game.

Here’s the bare bones of what a developer (or a team of coders) needs to sufficiently know in order to make a top-tier blockchain product:

  1. Top-to-bottom knowledge of blockchains
  2. A rich background in cryptography
  3. Familiarity with numerous cryptocurrency models
  4. Experience with Blockchain as a Service (BaaS), preferably also with Software as a Service (SaaS) and Platform as a Service (Paas)
  5. Knowledge of consensus methods
  6. Experience with decentralized technologies and DLT (distributed ledger technology) projects
  7. Strong background in the Internet of Things (IoT) development
  8. Experience with building up and managing P2P networks
  9. A high level of cyber security knowledge

A lack of expertise in any one of these fields makes for a gaping hole that will inevitably affect either (or both) the functionality or security of any product a blockchain development company sets out to create.

Of course, the talent gap is a vital factor in the blockchain in house development vs outsourcing debate. That’s why putting together a high-end blockchain dev team comes with a specific set of financial and organizational risks. Finding capable talent can be extremely challenging, while any solid blockchain engineer you do manage to acquire can easily be lured away with promises of bigger paychecks coming from other, better funded companies.

In other words, both employee acquisition and retention can get nightmarish if you decide to assemble an in house software development team for your blockchain projects.

In-House vs. Outsource Blockchain Development: Weighing the Two Options in Terms of Time and Money

Now that we’ve got the market’s unique context out of the way, let’s dive into the core of this article: should you hire or outsource blockchain development?

In an ideal world, you’d be able to hire a world-class internal team that develops top-of-the-line products, tackling all sorts of blockchain use cases while securing you a considerable competitive upper hand. However, due to the unique situation the blockchain market finds itself in, this would, quite literally, cost a fortune – between sky-high paychecks, incentives, workforce maintenance, investment costs, recruitment hassles, equipment expenses and accidental poor hirings, be ready to go deep into your pockets.

What’s worse, expect the bill to wrack up before your project even enters initial stages of development.

Unfortunately, these kinds of long hold-ups come hand-in-hand with running an in-house team, so, if speed is of the essence, putting together an exclusive team for blockchain software development may not be the best available option. Obviously, this goes double if you have a truly great idea in mind – each day can be precious as you risk someone else taking the market by storm with a similar product, essentially beating you to the punch in a gut-wrenching fashion.

So, as in-house blockchain development not only costs a lot of money and is also the slower of the two options in terms of delivery, outsourcing sets itself apart as an affordable, more effective solution that brings faster results without causing nearly as many headaches. Here are some of the main benefits that an outsourced team can bring to your project:

  1. Cost-effectiveness
  2. Far less micromanagement on your part
  3. By far speedier Time-to-Market
  4. Better risk management
  5. Battle-tested coders well-versed in blockchain development
  6. Insights into the blockchain market (and your product’s place within it)
  7. No recruitment issues
  8. Freedom to focus on other aspects of your project, like marketing of high-end business strategizing

However, while it speaks volumes about outsourcing, the list above does not mean you should immediately hire the first available agency you set your eyes on. Outsourcing brings its own set of unique risks and challenges, so you must ensure your future partner has the right skills, experience and dedication to build the optimal blockchain-powered product capable of standing the test of time.

Obviously, this rests solely on your ability to distinguish quality teams from those not worth your time nor money – which leads us to the next chapter of our article:

Separating the Best from the Rest: How to Find Blockchain Companies that Make for an Invaluable Partner

BaaS agencies are only starting to dot the IT landscape, so finding a good one can be rather tricky – there simply hasn’t been enough time for companies to firmly establish themselves as go-to service providers, so there’s still no clear-cut hierarchy among agencies.

Nevertheless, finding the right blockchain development company does not differ too much from seeking out a worthwhile SaaS team – this means that you’ll have to do your homework and examine core competencies, contractual models and the services on their repertoire.

Naturally, your number one and two concerns should be the domain expertise and technical competence of the development team. If you decided to invest in blockchain, you want a company that has a proven yet relevant track record, so here’s what your ideal team should have under its belt:

  1. Similar blockchain use cases to what you’re hoping to build
  2. Background of rolling out BaaS projects in your industry/niche
  3. Expertise with cryptography and different types of DLT networks
  4. Advanced knowledge of building DApps (Decentralized Applications) from scratch
  5. Strong experience with data structures and security
  6. History of designing top-to-bottom solution architectures
  7. Flying recommendations and a reputation for delivering on promises in a timely manner

If you manage to find a team whose portfolio checks all these boxes, chances are they’ll be able to adequately handle just about anything you can throw at them in terms of blockchain development. So yes, you’ll definitely want to do your research – taking a closer look at Blockchain Software Developers is a great starting point.

And as icing on the cake, when you do hire an outsourced team, you place the ball in their court – they will have to supply the knowledge, experience, and effective development tools while you get to turn your attention to other fronts. Furthermore, parting ways with an outsourced agency is a lot more straightforward than with in-house developers. This means you retain a lot of flexibility and, if push comes to shove, you’ll be able to cut ties and take a strategic step back at any time. Obviously, the same can not be said about an already formed internal team.

The Best of Both Worlds: A Steady Mix of Internal and External Teams

Choosing between in-house and outsourced blockchain development does not necessarily have to be a coin toss. As a valid alternative, you can blend the two models by hiring an external Blockchain as a Service agency while also planting seeds of an in house software development team.

Outsourcing blockchain development services while also building up an in-house team can be a great strategic move for your business. On one hand, you get to enjoy all the benefits that come with outsourcing a quality team (as long as you end up hiring the right talent, as we explained earlier). On the other hand, you’re simultaneously laying the foundations for an internal team that will gradually be groomed into your go-to dev option.

While unquestionably effective, this blended model is also more expensive than going with one of the two base options. You’ll have to pay the outsourced team their dues while also going into your pocket to settle debts to in-house workers – in other words, there’s a price for getting the best of both worlds. However, nothing’s stopping you from hiring a single blockchain engineer and slowly refining him or her into a capable developer. This would put less strain on your budget but, as we mentioned above, the danger of someone prizing your star blockchain developer away is all too real.

And of course, this mixed approach only works if you’re tackling a truly big product or integration of some sort – if we’re talking about a one-off blockchain project though, you’re better off simply hiring an external team and letting them do their magic. If you are staring down a barrel of a long-term project, however, you really should at least entertain the idea of strategically combining in-house upskilling with outsourcing.

At the End of the Day, It All Boils Down to Finances

While this may change down the line, deciding to go all-in on an internal team for blockchain development is too costly and time-consuming of an endeavor right now . We’ll see if this takes a turn as the industry further crystalizes over the next couple of years, but for now, going with an outsourced team is simply a wiser financial move that holds fewer investment risks.

As long as you do it right, outsourcing can obtain you a team with the skills and experience needed to seamlessly take your blockchain project through the finish line.

And the best part? Outsourcing minimizes the risk of things going completely south. Even if the team you hired to do the job fails to deliver, you haven’t invested large amounts of money and time into training and preparing them – unlike if you opted to invest in blockchain teams operating on an in-house level.

Simply and sweetly put, outsourcing entails a lot fewer commitments on your part, which means you have a lot more options on the table as your project unfolds – and, when all is said and done, that can easily prove to be the difference between a failure and a genuine success story.