When and how should you outsource app development to a vendor?

Hiring an in-house developer versus outsourcing to external vendors — it’s an eternal debate. While there are merits to both approaches, the challenge is in working out which option works best with your set of circumstances. Then there’s a matter of how one should engage a vendor and how does one take care of IP rights and potential conflicts in terms of working styles?

Fortunately on Ask ACE, an online Q&A platform for startup-related issues, we have experts on hand to give advice to questions like these. Here’s what some of them said when asked on this topic.

Question:

I have started a company which provides retail solutions. I have several ideas to enhance my software and create mobile applications but we do not have the knowledge. My colleagues and I are tied with maintaining current software. How do we go about creating these mobile apps? Do we hire vendors to develop them for us? Can we share these ideas with them?

Answers:

Rahul Harkawat, founder & director of Mobitila and advisor to Teamie

Hire an experienced mobile developer and start by signing an NDA and non circumvention agreement. check references of the developers and ask them to show case some of the apps they have developed.

Once you have done the above then feel free to share the concept, develop the high level mobile structure and determine deliverables and milestones. If you have clarity on this and can clearly lay out the expectations you should be able to get the apps developed.

One of your team members could also function as part of the developer team to understand mobile development technology. use the development process to understand and get familiar with the technology. Hopefully by the end of the development process you are independent of the developer and can support the app internally.

Jeffrey Paine, co-founder of Golden Gate Ventures and Founder Institute Singapore:

If your core team do not have the skillset to build the mobile apps, I suggest you outsource to a reliable development shop. You can share the idea with them provided you have a formal service agreement with them. Cover the grounds as much as you can. I would suggest taking a look at www.contractiq.com.

Huang Shao-Ning, co-founder of JobsCentral:

Engaging in external providers seems the way out, unless your team is able to pick up the knowledge/skills fast. Inhouse work is always the preferred way (think IP, potential conflicts, etc), but it’s really a matter of skillset availability and business needs.

To address the IP concerns, as well as the doubt that the idea could get stolen, you could always ask for the source code from the vendor, and make clear in the service contract that your firm owns the IP/rights and that the developer will not infringe on those. More importantly, check the history of the provider — is it a pure software house, or has it done many branching work in the past, ie not entirely focused on development work. If latter, you may want to be more careful dealing with them if you decide to work with them.

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