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FREELANCER VS SOFTWARE HOUSE: WHO IS A BETTER CONTRACTOR?

We have a concept of a new application or software?  One of the key problems is the right decision to whom to entrust the implementation of our idea. Of course, as for making a million dollars, there is no ready-made recipe for what to do. We only have different options to choose from. What is better? This question has no one-size-fits-all answer. Therefore, based on our experience, we want to help you in this non-obvious choice. Unfortunately, the text will not contain answers, but only suggestions which project will be better and with greater benefit for you implemented by Software house, and which by freelancers. 

 Another question immediately arises: will the text published by the company in which the Software house enters the structure be objective? The answer is simple and short – yes. We will only present a comparison of these two different solutions, and we will leave the choice of the better one to you.

Another study prepared by Global Managed Services Report 2020 in which more than 1,200 management representatives from 29 countries were asked for opinions shows that in the next few years companies will be particularly looking for expert support in the field of cloud infrastructure.

Let’s define the terms

  • Freelancer

The labor market has changed significantly in recent years. Over 30% of employees are freelancers. In some industries, they constitute over 50% of all employees, which is why this term is very broad and applies to individual units of a very diverse group, both in terms of education and skills. They can be assigned to a person in the process of study, a graduate or a high-class specialist with many years of experience. Undoubtedly, the level of services provided and the scope of competences go hand in hand with experience. The involvement of a high-class specialist in our project will be expensive, but during its duration it will compensate for it with wide possibilities of creating more advanced solutions.

  •  Software House 

The hierarchy in the employment structure as well as the skill level of Software house employees look completely different. These are only high-class specialists whose skills have been repeatedly verified by the completed projects. The involvement of the entire team sheds a completely different light on the project. The hired team works on many levels. He is responsible both for the concept phase and the implementation plan, as well as for the maintenance of the finished application after programming. Software house employees are constantly evolving, learning new things from each other (soft and hard skills) through the exchange of experiences.

Freelancer and Software House are two completely different structures and two different ways of operating. The goal we set for them will be achieved, but the choice of means, solutions and the way to achieve them may be different.

So how do you compare them?

We selected recurring critical areas and put them together. Of course, if you have already cooperated with both a freelancer and a software house, it will be much easier for you to understand the fields we compare.

Those are:

  • Project size

What is the assumption about the size of the project? This is a key question that determines both the budget assumptions and the number of people involved. Medium and large projects that require a wide range of activities will be more suitable for solutions offered by Software House. Based on experience and know-how, many stages will be completed faster on the one hand, on the other hand, the quality of the finished solution will be incomparable to that offered by freelancers. Often people inexperienced in software development do not realize that many solutions need constant testing and research. According to a Business of Apps report, 19% of all projects fail due to a malfunction in the application core.

A technological error that can be quickly verified and changed during the application development process, without simultaneous testing, may lead to the creation of a non-functional product.

According to of the above-mentioned report, in the first, shameful place (42%), was the mismatch between the prepared software and the current market needs. Having a concept of a finished product and a project implementation scheme, the client is often not aware that the solutions proposed today may be outdated in a few months. Software House, by constantly implementing projects, is better oriented in trends and is able to propose more innovative solutions.

A very important issue after estimating the size of the project is the selection of competences that are necessary for the correct implementation of the assumptions. By using the services of a freelancer, we agree to use his narrow competences. This solution will work when you need to correct a ready solution or we have a clearly defined task to be performed. Then the involvement of the entire team of programmers is unprofitable. In the event of an unforeseen need to change the direction of project development, we have limited possibilities for changes. By renting a project team at the Software house’s disposal, we have the option of expanding the project in either direction at any time, because we have no limitation in the form of the lack of the necessary competences. The design company must prepare a team that is diverse enough to be able to provide services to the greatest possible extent.

  • Budget

This is the area that most often determines the choice between freelancers and Software House. When the budget is set and it is not possible to flexibly scale it in the event of a change in the direction of the project’s development, the best solution is to hire a freelancer. However, in this case the biggest threat is underestimating the final budget assumption for a given project. By establishing the financial framework in the concept phase, it is easier to do it with an experienced Software House who, taking into account the know-how, can present the final costs with greater precision.

Softwer House is about 20-30% more expensive. The reason for this difference is the disproportion of commitment both in terms of the spectrum of competences and the number of people who work for your success. Project Managers, Front-end, Back-end, Mobile Developers, UX / UI designers, Quality Assurances – all these specialists will be involved in your project. From the concept phase to testing ready solutions. This means that using the services of a software company will be more expensive, but will provide more complex service in many fields.

  • Stability of the project

It was used to say ” accidents will happen.” Maybe not optimistic, but true. How does this relate to our comparison? When using the services of one programmer, we rely only on him. The success of our project depends directly on the disposition of our employee. No replacement option without interfering with the budget and the project completion date is practically impossible. Programming companies can reorganize their work in a random situation, which is not felt by customers.

  • Relationship with the client and relations after the end of the project

Currently, you can use many industry portals, including Clutch to see the achievements of both the entire company and its individual employees. We have a similar situation with freelancers. When building their own, unique personal brand, they take great care to present their portfolio and achievements in various projects as fully as possible.

Therefore, we can easily verify potential contractors before starting the project, but the differences are felt during the duration of the order and after its completion. Individual specialists usually carry out several projects simultaneously and after complying with the provisions of the contract, the order is considered completed. Programming companies prefer a different model of cooperation aimed at building a relationship of trust with clients and long-term implementation of the project. It is a more profitable model than the implementation of many smaller projects. Sohtware House usually maintains the service of the created application for a certain period of time, introducing changes and updates.

  • Scalability

In the case of demanding projects, the analysis phase must not be omitted, both in terms of financial profitability and the necessary resources to undertake implementation. By engaging specialists to develop the necessary requirements, we will eliminate the possible possibility of financial underestimation or a mistake. However, we must accept a certain error limit and be able to change also at the stage of software development. It won’t be a big problem for the Software House team. They have a wide range of qualifications that can be involved at any time.

  •  Legal issues

We have a choice between cooperation with the company and a person economic activity. We have to answer the question what possible consequences we can enforce from each of the parties. The undoubted disadvantage of the software house is the lower flexibility of the forms of cooperation. However, it should be remembered how much responsibility we place on the contractor and what secret we entrust to him.

In the event of termination of the contract, the longer notice period will most often be in the case of software companies. However, it is important to remember that it works both ways.

  • Know how

We have already mentioned the issue of know-how in the article. The experience and amount of competences on board undoubtedly speak for Software house.

“Software house has the entire software development process, from collecting requirements, preparing analytical documents, leading a team through internal testing, user acceptance testing and implementation.”
Krzysztof Rusek, COO Software House RITS.

Prepared and practiced action plans, a structured hierarchy and large resources of various competences, unfortunately, are costly. Here the circle closes and we can return to the point related to the project budget and answer the key question of what we need.

So what to choose?

There is no universal solution. A person who believes that Software house is an ideal solution will be wrong. It is also wrong to say that a freelancer can handle any project. Ideally, it will be a supplement to the team’s competences.
When we already have our own project facilities, and we lack a person who will complement individual areas or phases of the project with his skills, using the programmer’s service will be the best solution both in terms of the profitability of the project and the operating processes we have prepared. We will have full control over the project in progress and it depends on our decision in which direction we will develop it.

 

Warsaw, September 21, 2020, RITS Press Office

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