Advantages and risks of outsourcing a game startup

Time and money are the major cornerstones of any startup, so outsourcing is a very important solution to be considered. Many developers do not allow third parties to be involved in their projects, while others actively use this cheaper labour force. In this article I have outlined the pros and cons of outsourcing to aid you in deciding whether or not it’s the right fit for you.

REASONS

Understanding fully if and when outsourcing should be used will help you in choosing the right strategy and to plan everything beforehand.

    1.  To save money and time

If your company operates in the EU or the US, the hourly cost of in-house developers and artists will be higher than that of a labour force from some Asian or CIS countries. But it is not only about the hourly rates: you need to include the taxes of all of your employees, the costs of equipment and licensed software, and finally, of the HR or recruiting agencies which are helping you to find the right people. After estimating those parameters a better understanding of how much you can save with outsourcing will arise. One way to save costs in this area is to use independent contractors instead of actually “hiring” them as employees – this means that they will pay their own taxes, while in practice they can be working full-time for you.

    2.  To add expertise.

You may have a talented team which can cope with any given project, however- that doesn’t mean that there aren’t any professionals out there who can improve your project even more in one way or another. To understand if external expertise is needed, you should evaluate the advantages and bottlenecks of your own team’s professional capabilities. For example, art outsourcing studios usually have  superior access to a pool of talented artists, while IT outsourcing companies may have better solutions for back-end development. Outsourcing something that you are not really good at, instead of investing a lot of resources and money into become better at it, may be a very reasonable business decision, since you won’t only get the work done – you will also obtain the experience from the outsourcer regarding the methodology of how a certain result can be achieved. Game development has way too many aspects for most startups to be able to become fully proficient in all of them: after all, even if you have enough 2d, 3d artists, programmers, game designers and testers, are you then going to hire professional musicians and voice actors as well? What if your next game needs a totally different type of music or voice? Will your game have a website? At some point, there has to be a dividing line between what is done in-house and what is outsourced.

    3.  To avoid repetitive work

Every project has time-consuming and boring work that nobody likes, but which needs to be done. By letting the outsourcers deal with the repetitive tasks, you will be able to focus your  team’s efforts onto something more important and exciting. This is a good idea when you have more than one project in your production pipeline. This kind of attitude will allow you to prevent overtime for the personnel, keep the team motivated, and make you a better employer to work with.

 RISKS

There are no advantages without risks, and outsourcing may have some negative effects on your game startup, but they are manageable and depend on your business approach:

    1.  Incompatibility and low quality   

This is the biggest problem that many inexperienced employers may face when dealing with outsourcers. In order to get the results you desire, you need to choose the right contractor and set goals correctly. Working with many different freelancers means that each of them can do his work using other standards and provide you with results that might be incompatible. You may have a some buggy code, it might be that the animation does not fit the concept, or other things. The easiest way to prevent these situations is to deal with an outsourcing company that is transparent enough to share not only their results but their work process as well. You just need to negotiate more details and include constant status reporting with the contractor. For example you may ask an outsourcer to use Jira Agile or another project management service to report on the whole process. If you are able to communicate directly with the employee who is doing the work and indicate all the problems in his work in a timely manner, you won’t need to argue over the results after the milestone has passed.  

     2.  Unreliability

When you have a group of people sitting in the office and waiting for your further instructions you may feel more confident about the project. Even if part of your team is not involved and is just killing their paid time, you still know that they are always ready to step in. You need to understand that an outsourcer has limited obligations to you and that they do not share your company’s goals and team spirit. It is not unheard of for a freelancer to disappear after receiving his money for the milestone, so you need to find another one to take over – this may be difficult and time consuming. The best way to avoid such predicaments is to deal with an agency instead of an independent freelancer.

     3.  Data security

The life-blood of any business is the information that keeps it running. When you reveal your concept and solutions to a third party, the confidentiality may be compromised with unpredictable consequences for the project. You should of course sign an NDA, but you shouldn’t rely on it too much – the legal meaning of NDA’s varies in different parts of the world, so keeping others’ secrets is more about contractor’s reputation and not legal issues. Therefore, if you are concerned about confidentiality – find an outsourcing company that is already established in the market, has a decent history and values its reputation.  

 SUMMING UP

Outsourcing may be of great help to your project, however it is not without risk. However, the final result will be dependant not only on the outsourcer, but on your experience and management skills as well. Before taking a decision on whether or not to outsource, you should first come up with a clear strategy for the whole project. Having a well-structured and detailed plan will make the decision self-evident.