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Ask HN: Should we bring software dev in-house?

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Re: Ask HN: Should we bring software dev in-house?

#461
post #376

Earlier quoted context omitted.

$5M/year? In the US maybe. A team of 5 senior freelancers in Europe will cost about 150-200k per person.

For compensation. The carrying cost of an employee is usually twice their total compensation.

Freelancers.

Re: Ask HN: Should we bring software dev in-house?

#462
post #235
post #206

Earlier quoted context omitted.

For me red flag is that for OP as a developer I will end up being a cost. Even with all the good words he wrote how company can improve by doing own dev - reality is that company makes money in logistics and as a software dev I would be second class citizen and cost center. That is why I much rather work in company that makes money on software, because here I am money making.

> company makes money in logistics and as a software dev I would be second class citizen and cost center If software can make the company provide better logistics more efficiently, it's not a cost center, it's an enabler. It pays for itself in reduced costs and increased revenue.

A cost centre is, by definition, somewhere that only produces costs and is never attributed with any revenue or profit.

A smart management team can figure out that investing in IT, Software, etc is going to have a positive ROI overall by increasing efficiency among other things.

Unfortunately my experience (and many others') is that only the balance sheet will be considered and the goal will always be to reduce the costs in cost centres as much as possible.

Even in a company that doesn't fall fully into that trap, often times a lot of effort needs to be expended to keep funding at current levels, never mind the rituals involved in getting increased funding for new projects, hardware, staff, etc.

Generally the more obvious the connection between your work and company revenue, the easier your life will be.

Re: Ask HN: Should we bring software dev in-house?

#463
I would prototype this by duplicating a vertical slice of the business that is (presumably) well understood and easy to teach. Don't start with the hardest thing and definitely don't try to plan it all up front. Hire some cheaper contract labor to begin with. If you find you can't even replicate a small part of something you thought you understood, you should probably abandon the overall effort.

The last thing I would do is make some grand decision, locate an 8-figure budget, hire a bunch of people, and then hope for the best. Incrementalism is the key to not blowing this idea up. You already have a ~working system. Leverage the hell out of that. At the end of the day this is probably going to be more of a people problem than a technology problem - managing scope and expectations throughout, etc.

Re: Ask HN: Should we bring software dev in-house?

#465
post #8

Earlier quoted context omitted.

Right, and notably you want the CTO whether or not the answer is: * build a team in house * bring in some contractors * make the most of the existing vendor through API integrations * switch to a different vendor * some combination of the above because somebody with the right skills, attitude and integrity has to be in charge of it.

Your and Fuzzfactor’s points are very well noted. To do this well we’d need someone who understands the domain/industry/business and who is able to set a coherent strategy. The rest follows from there.

[deleted]

Re: Ask HN: Should we bring software dev in-house?

#466
Can you buy the service provider? Can you buy a copy of their service and run it in-house?

If they’re struggling as you say; you may find that the premium to acquire all/part of their operation is relatively low.

It’s nearly always better to iterate an existing solution to better than to build one from scratch.

Happy to talk it over if you’d find it helpful: ossareh _at_ gmail

Re: Ask HN: Should we bring software dev in-house?

#467
> Besides, can we even attract experienced developers to a non-glamorous industry like logistics?

Yes!!! Nothing a developer loves more is getting into a new market where their work will drive the business and will be seen as valuable instead of a necessity (cost center vs profit center)

What's your core competency? Does it include this software? If yes, then yes you should make this a core competency.

You need to partner with an engineer with a good amount of experience that has worked both in startups and established companies. You need to discuss all the intricacies and then they can tell you what timelines you will be looking at, potential cost, and potential benefit. Do NOT HIRE a CONSULTING company. I worked at one of these and it's a good way to spend $millions without getting much in return.

There are probably providers out there - they probably aren't very good and that's why you're not familiar with them.

Re: Ask HN: Should we bring software dev in-house?

#468

Earlier quoted context omitted.

This is excellent advice but I would back up a few steps and do a few things before bringing in a freelancer team. Identify a part of this system that can work somewhat in isolation and is non-critical if at all possible. Then document the requirements for this part thoroughly. This allows you to: - Have something smaller for your new team to cut their teeth on. - Ensure you have collected all the diffuse domain know…

>> Identify a part of this system that can work somewhat in isolation and is non-critical if at all possible. I'm probably thinking about this at a different level, but when I start something new I like to find the core pieces and the most difficult pieces and see if I can tackle those first. Everything else builds on top of that. I'm assuming you mean to start at a higher level piece that will need to use all of the…

It’s a new team. This non-critical part is your shakeout cruise before heading off into the open ocean. You can identify how well you hired as well as how well you prepared for these contractors to begin work. Make appropriate calibrations or worst case scrap it and let the whole team go.

If they produce some big mess you will find out much quicker than if you set them loose on the big project. Small deliverables which incrementally get larger is how you roll on a new team. It allows you to get fast feedback and make small calibrations as you go. Hopefully avoiding the “fire them all” failed project scenario

Re: Ask HN: Should we bring software dev in-house?

#469
I work at an in-house software development team, although it's a very small one at a non-profit, so not directly comparable.

But I would say you should know you are not going to save money by going in-house. The success criteria should be getting a better product that supports your business, not saving money. It will cost more than your current software costs.

i don't know what size team you are considering, but you certainly can't do this with less than 3 people, and that's probably too small. (not all of them are necessarily 100% "programmers", there are management and other tasks, more below)

I don't actually think logistics is particularly unglamorous, I think it's as interesting as most and more interesting than lots -- but it may not be interesting enough to attract talent at significantly less than they can make elsewhere. So you're going to have to be paying at least somewhat competitive salaries -- good news for you of course is that the job market isn't great now. But still.

So think about how much it will cost to have 3-5 (possibly more) staff at competitive for tech jobs salaries... is it still potentially worth it to your business?

If it is, then great. You've got to hire good talent, including especially someone skilled at figuring out what the software should do. Product management/product ownership with a dose of user research thrown in. This may or may not be a developer (probably not, but maybe), it may or may not be a manager of developers (maybe). This will be the hardest part of execution. Just doing everything you think you as the boss need, counter-intuitively, won't actually lead to a successful product at an affordable price -- you are wrong thinking you know what you need. (Yes, I can say this with confidence not even knowing you, it's always true).

Trying to copy everything your existing software does but then adding more -- or trying to keep all the workflow exactly the same while switching software -- won't lead to a successful product at an affordable price. Part of the product design isn't really product design at all, but business/workflow design.

You could considering hiring a consulting firm to write and then maintain this software as well. That will probably not be cheaper than doing it in-house -- (although it could be if your in-house plan goes seriously awry!) -- but may have a higher chance of success than building an in-house team (and getting the right team!) if you pick the right consultant. It also of course gives you more flexibility to cancel or scale down the project at any time if it's not going well, vs the emotional and sometimes legal or financial pain of laying off employees.

Re: Ask HN: Should we bring software dev in-house?

#470
Could this be part of your competitive advantage in the future? or is the software a commodity and just kind of annoying at times?

Changing ERP systems takes a long time (months to years) and for the whole transition period you have TWO systems to maintain.

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