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

I work on an internal team like you would be building, I think for a company of your size and probably needs it is very much a needed thing to control the software in-house. Not having people that are dedicated and know your stuff leads to the situation you're in. Just do it. We've outsourced a couple small projects, then re-written them within our team because the quality and lack of specification is just...bad.

My current industry is pumping chemicals, it's non-glamorous but it's a need that must be fed, versus "fancy tech" or whatever. We keep a team of guys employed and happy. Just pay them decently well, don't try to micromanage them, give them good requirements and honest feedback, give them the tools they need.

Incidentally, "Domain Driven Design" was written around a theoretical logistics/shipping platform. That book didn't make it seem "non-glamorous." Everything is exciting to someone.

I have not navigated a similar transition, but I have studied CS and read tons of business books.

I think if you do this and take the development seriously, it will be a ridiculous good return on investment. The success to Tencent according Mohnish Pabrai was that they had ROI on their developers over 10 years. They just put everything they could in development and if it was too much they would spend the rest on lower ROI categories. Overall 50% ROI. (IIRC).

It’s also essentially vertical integration if you do this. If you think it can make your beer taste nicer, as Jeff Bezos put it, then it’s probably worth it. Note that Amazon’s in-house team spawned a new industry. Also, Tesla is currently much ahead on competitors due to their software. I think many car manufacturers underestimate how much Tesla is ahead. The apparently even have their own ERP system called Tesla OS.

For attracting and retaining, I think you can definitely do it. There are engineers who like to see physically how their product is being used. Short feedback cycles can be very rewarding. Also, to retain I would look at Napoleon. What is the best for morale? Winning. Give ambitious projects and make them succeed.

I worked on freight and logistics software for 10+ years for a New Zealand based company that has significant operations in USA, Australia, Europe and Asia. (domestic freight/road, air, sea, 3PL)

We were a bespoke software dev shop, and the freight company was our customer.

During my time there we were transitioning to their third “major” version of the software over about 30 years. It was a new system designed to handle the US market, where the customer was a relatively new entrant who had been running off the shelf software for some time.

Due to the way they run their business, with strong P+L requirements down to each individual location/site they had a presence, and even individual trucks operating as separate business units, a lot of what got built was effectively accounting. If this sounds like you, or you use a lot of third party carriers, keep this in mind: tracking freight movements alone isn’t that hard, but you need really strong accounting fundamentals in the system from the get-go to be able to really understand costs in this business. Some off the shelf software doesn’t do this particularly well.

Based on this - my strongest advice would be to choose boring tech (Java or .NET) and recruit specifically for some core developers who have a solid grounding in accounting fundamentals, or do some serious training on this before embarking on the design. You will inevitably end up posting journal entries to your accounting software, so treat cost tracking as a double entry accounting system rather than trying to construct a journal as an output.

The customer is pretty vocal in their annual reports (publicly available as they’re listed) about their successes in IT as well as their business model. They look at having control of their platform “in house” (product ownership in house, outsourced development of their own platform) as a core part of their success.

If you would like to chat, I’m not hard to find - look me up on GitHub, then search my name + New Zealand on Linked In. (My customer is also pretty obvious from there).