Outsourcing vs. Internal IT Teams: Lessons from Developing the Regenemm Healthcare Project
Outsourcing vs. Internal IT Teams: Lessons from Developing the Regenemm Healthcare Project
Introduction:
In IT project development, one critical decision that Non-tech founders and CEOs face is whether to outsource the project or build an internal team. Both approaches have their merits and pitfalls. In this blog post, I'll further share my experience developing a software healthcare project called Regenemm Health, focusing on our journey with an outsourced team and transitioning to an internal IT team.
Through this ongoing candid account of our challenges and successes, I hope to persuade and convince you of the importance of making best-practice-informed decisions in this area.
Starting with Outsourcing:
As mentioned in our last paper, our journey with Regenemm Health began by contracting an outsourced team. The project quickly took shape, transforming our concepts and ideas into tangible front-end code and cloud-backend data analytics. Within six months, we developed an alpha mobile healthcare application.
As the project progressed, I realised the central need to build and direct an internal team. As a non-tech CEO, I lacked the necessary complete skills complement to manage an IT team. Acknowledging this early on was crucial. I needed to identify my knowledge gaps and find experts quickly.
Did I, as the Founder/ CEO - have the required skills for this? No – initially, one does not- not as a non-tech CEO. However, you must realise this from the get-go. "I was the chipmunk at the keyboard."
This is where I learned the importance of knowing your limitations and being open to learning from others. First, find out what you don't know - quickly. Then, adapt to these unknowns and build the People who do know the answers you don't.
Building an Internal Team:
We began liaising with specialised digital recruitment firms to hire front-end developers (React Native cross-platform), backend data engineers, and data analysts (NodeJS, Python in an AWS Lambda serverless cloud). The recruitment process was an eye-opener, teaching me to adapt to the unknowns and work closely with people with the answers I didn't have.
Navigating Recruitment:
Working with recruitment firms can be both rewarding and challenging. Knowing what you're looking for before engaging with a recruiter is essential. Be prepared with questions about technical requirements, salary ranges, equity, incentives, and internal hierarchy.
Recruitment firms are very experienced at dealing with Founders and start-ups. They will quickly assess your needs - but they will also promptly evaluate your level of understanding. You'll be given questions like - Do you want CI/CD pipelines? What are your backend computing needs? What is your time to market? How much are you prepared to pay up against the established players?
Recruiters are dealing in a marketplace with a finite skill set, especially in these post covid times. They have large clients with huge needs that will have the best recruitment firms on retainer. A start-up can't compete with this. I was all set to hire a fabulous PhD graduate in biology and Data analysis (ML) when he also interviewed with a large, established IT healthcare firm—no surprises on who won. This is the playing field, and you need to level up.
Treat every interaction as a learning experience, and remember that on-the-job training is invaluable in a start-up. By sharing my learning curve, I hope to convince you of the importance of being well-prepared and adaptable in this process.
Hiring Top-Down and Learning from Mistakes:
My key takeaway from our hiring process was the importance of hiring from the top down. Start by hiring someone who can be a valuable co-director for future hires and be involved in all interviews. This approach helps ensure the team is built according to the project's specific needs.
Key question points:
- Ask yourself repeatedly what precisely you need in a new hire.
- What is their required skillset – be specific?
- How should candidates be best interviewed- what are the core knowledge aspects each group requires?
- Who are to be the leaders of this developing functional team? How good are the Recruitment firm recommendations? Are they unbiased?
Because we retained the External team, there was a handover period. The Outsourced team worked to perform a soft transition over 3-4 months; this allowed us to build the team incrementally.
We hired a terrific Data Engineer, who quickly started a sophisticated backend build-up to be scalable and refined for our needs. However, one significant decision I made was not giving this potential star candidate the appropriate title and position within the IT structure.
He was a Senior Developer and wanted the title - of CTO or VP of Software Engineering. I took external advice, which suggested waiting and allowing individuals to prove themselves first over 4-12 months.
My mistake? - as the individual walking. This led to losing a key contributor and team leader, destabilising our internal team during the crucial transition period. By sharing these consequences, we faced, I hope to persuade you of the importance of recognising and rewarding talent appropriately.
As a start-up founder, I cannot stress enough the significance of these Jim Collins quotes,
"Great vision without great people is irrelevant."
"Hire the right person, for the right seat, in the right bus, going in the right direction."
Internalising these quotes can be essential to identifying and overcoming the unknown hurdles in building a successful IT team. Think of these as central tenements that improve critical focus.
Some further recommendations include the following:
- Be prepared for unforeseen challenges like technological changes or team dynamics. Incorporate AI technologies deep into your tech team.
- Create a strong company culture that encourages open communication and constant innovation.
- Stay updated on industry trends and be open to adopting new strategies. (transformer models in natural language processing).
- Be patient and flexible in the face of setbacks and learn from each experience. Strive to excel.
Lessons from Outsourcing:
Our initial outsourcing experience with the external team was beneficial and perhaps fortuitous**. However, we have since faced an unfortunate incident with another well-known outsourced IT team that hindered our progress last year.
This taught us the outsourcing model's potential risks, drawbacks, and downsides. By sharing these experiences further in our following paper, I hope to provide a balanced perspective on outsourcing to help you make informed decisions.
Developing the Regenemm healthcare project has been a rich learning experience in outsourcing and building an internal IT team. I've learned the importance of knowing what you need, hiring the right people for the correct positions, and being prepared to adapt and redirect as needed.
As a start-up founder, it's essential to be proactive in identifying unknown hurdles and addressing them effectively. So here are a few more recommendations to consider:
a. Establish clear technical goals and objectives for your IT team, which will help guide decision-making and keep everyone aligned. Ie. Build product-specific road maps, technical requirements, workflows, sprint goals, and modular design blueprints. Incorporate DRY and SOLID principles. Build to scale. Include early detailed documentation for software as a medical device regulatory requirements SaMD. Use domain-driven or test-driven design principles TDD / DDD. Incorporate quality control and unit testing early and often**. Build substantial clear documentary highways.
b. Invest in Employee development and provide growth opportunities,** as this will enhance your team's skills and increase retention rates—especially machine learning. Use AI toolkits for coding, bug repair, alternative software projects, template designs, and strategic internal papers.
c. Foster a culture of collaboration and encourage knowledge sharing between team members. This can lead to innovative solutions and improve overall productivity. Make others stronger!
d. Continuously evaluate and reassess your IT strategy, adjusting as needed to ensure optimal performance and alignment with your business goals.
Whether you outsource your IT project or build an internal team, making informed decisions and being prepared to face unknown hurdles are crucial to your start-up's success.
By further sharing these experiences and providing recommendations from a Founder's perspective, I hope to help you navigate the complex landscape of IT project development and ultimately find the best path for your venture. These recs will be increasingly specific over the following few papers.
As always, it's through learning from our mistakes and adapting to new challenges that we can grow and thrive in the ever-evolving world of technology.
Stay tuned for our next blog post, where we'll delve deeper into the challenges and lessons learned from our "not-so-good" Outsourcing experiences.
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