Implementation: In-House development versus Hiring Consultants/Outsourcing

In-House Development Pros

• Build and maintain knowledge in-houseLower maintenance costs in the long term
• Lower implementation for future releases
• Lower perceived development costs (pay salaries vs consulting fees and associated travel expenses)

In-House Development Cons

• Potential longer development time
• High training fees and long learning curve
• Complexity of project could be underestimated
• Project scope, timelines and expectations may be exaggerated
• No extensive prior experience increases risk
• Staff may not be available to be dedicated to project
• No previous deliverables to leverage
• Outcome of implementation is impossible to predict
• Incentive Compensation is not the core business of the organization

Obviously, the greatest advantage to hiring an experienced team to perform the implementation is to increase the odds of meeting the objectives and to decrease risks associated with a complex implementation. On the other hand, the major draw backs are that the knowledge acquired while building the project could leave along with the consultants, and the implementation costs may appear to be higher.

Different circumstances could make the balance lean in one direction or in the other, and a lot of information regarding the merits of either approaches can easily be found online.

My 2 cents is that a team consisting of consultants working on-site, along side with an in-house team who will eventually ‘own’ the system could be the best of both worlds.

My next article will include some tips on choosing an implementation partner.