Data integration is a critical part of any business, but when done in-house it can come with some risks.
Here are the top five risks associated with in-house development for data integration:
- Cost overruns: Cost overruns occur due to unexpected costs that arise from developing and maintaining an in-house system
- Lack of Expertise: Lack of expertise can lead to mistakes or missed opportunities
- Difficulty scaling: Difficulty scaling means that as your business grows its needs may outpace what you’re able to do in-house
- Security Vulnerabilities: Security vulnerabilities could leave your data vulnerable
- Complexity: Complexity increases over time as new systems must be integrated into existing ones.
Taking all these factors into account will help you make the best decision for your business when considering whether or not to go down the route of in-house development for data integration. Ultimately, the risks and unknowns associated with developing in-house could result in higher short-term and long-term costs.
In this article, we'll dive deep into the risks of in-house development for data integration and whether it might make sense for your company to outsource your data integration needs to a trusted third party to ensure all your needs are met on time and on budget. We'll provide a comparison of the costs, benefits, and risks associated with both approaches, so you can make an informed decision that best serves your business needs.
Table of Contents
- Overview of In-House vs. Outsourced Development for Data Integration
- What is In-House Software Development for Data Integration?
- Why Do Businesses Choose In-House Software Development?
- Risks of In-House Software Development
- Benefits of Outsourcing Your Software Development
- Risks of Outsourcing Your Development
- How to Find the Right Vendor for Your Data Integration Needs
- Why Integrate.io Should Be Your Preferred Vendor
Data integration is essential for businesses to achieve efficient and effective processes. For successful data integration, businesses can choose between in-house software development or outsourcing their data integration needs.
Overview of In-house vs. Outsourced Software Development for Data Integration
G2, the world's largest software review platform, has over 100,000 software products listed on its site. It's no surprise, considering top companies use an average of 37 different tools or software platforms to run their day-to-day operations.
Each of these tools has its own purpose, and data is often needed from multiple sources to be analyzed or to accomplish critical business tasks. The problem is that different vendors make most of these tools, and there's no native way for the applications to interact or share data.
That's why a data integration solution is needed to allow data to flow to and from these various applications, allowing companies to make better decisions and drive growth.
The problem isn't easily solved, however, since data integration can be complicated. Not only are there processes that need to be followed, but there are also risks to data integration. For instance, you might experience a data integration failure that could lead to losing important information.
Businesses usually have two options when it comes to integrating their data:
- Develop a data integration tool in-house
- Outsource to a data integration provider
This post will discuss the top five risks of in-house development and why outsourcing may be a better option for you.
What is In-house Software Development for Data Integration?
In-house software development for data integration, or in-house data integration, is the process of creating a solution that allows data exchange between different applications (databases, third-party apps, CRMs) using in-house resources. The alternative is outsourcing data integration needs to a third party who would manage the process for you.
A third option is choosing a tool like Integrate.io’s new ETL platform with reverse ETL capability that allows you to design and execute data pipelines securely in minutes. Integrate.io also offers a very fast CDC platform that you can learn more about today.
Why do Businesses Choose In-house Software Development?
To better understand the risks involved with in-house development and why outsourcing could be a better option, it’s essential to know why businesses still choose in-house development.
The most common reasons companies still choose in-house development are:
- They have the funds and resources. Larger companies may opt for in-house development because they can invest the money, time, and energy into maintaining an in-house team for their data integration needs.
- Development staff is 100% dedicated to the specific project. When development is outsourced, the outsourced resources often work on multiple projects simultaneously.
- They have complete control over development. If your company needs to monitor each stage of development or particular details, it may make sense to keep the project in-house.
Risks of In-house Software Development
Unless a member of your dev team is experienced in managing custom development (or you plan to hire someone), your team may lack the expertise required to build in-house data integration effectively.
You don’t know what you don’t know
Many moving parts require specific skill sets at every stage of the development process. For example, you may need software designers to design the solution, software developers familiar with your company's business applications, DevOps, and someone to manage the project.
If you aren’t clear on precisely what's needed to create the solution, you’ll have trouble hiring the right talent, which could lead to additional risks and wasted time.
More time spent than projected
Developing an in-house data integration solution can be time-consuming if you don’t know what you’re doing.
Suppose this is your company’s first attempt with an in-house data integration solution. You may end up with issues, bugs, and setbacks that a specialized team could have avoided.
Building a custom data integration in-house isn’t the same as basic app development. If something goes wrong, there's a potential for security risks, personal data leaks, or even the loss of critical business information.
That said, if you’re developing in-house, you’ll want to be certain the end product is completed correctly. That means you must have top talent who will add value to your business now and in the future.
Finding the best talent is another project in which time will be spent in various rounds of interviews, providing offers, waiting for responses, onboarding, and so on. Then you’ll have to worry about retaining talent.
The cost of hiring in the IT industry is high, so you may see a cost reduction by outsourcing your development.
Inability to scale quickly and efficiently
Let’s say you’re developing in-house, and your needs change due to an unforeseen circumstance. Depending on the issue, this can be costly for your business as you’ll need to pivot to either add or remove resources.
As you know, adding new resources is time-consuming. If your solution depends on a specific skill set, the time and effort spent could increase costs and slow down your project.
What if the opposite is true, and you need to scale back your team? If you don’t have a position for the specific skillset you hired for, you’ll need to let them go or train them on different skills based on your needs.
By choosing to have an in-house development team, your ability to quickly scale up or down as needed is severely limited.
Inefficient workflows and processes
As mentioned, unless your company already has trained resources for in-house development, there's a risk of inefficiency across the entire business. Your human resources department will need to shift its focus away from your core business and operations to source and hire the new talent required to complete the project. And no matter how talented your HR team is, there's no guarantee the team will work well together. If internal conflict erupts, which is hard to predict, the project will be impacted negatively.
Furthermore, avoidable situations may arise, which can cause inefficiencies with the end product, the team, and the overall business. For example, if a critical issue arises with the data integration, you could be at risk for data loss or inaccurate data. Deployment can also be delayed, and you could face high development costs due to the abovementioned risk factors.
Finding the right data sources to integrate is challenging for non-experienced in-house teams. Especially when it comes to knowing how to use customer data to make decisions. Learn more about all the places your customer data is located here.
High short-term and long-term costs
A recent study on project management showed that only 39% of projects ended on time, on budget, and with the required functionality. In addition, 61% of projects missed the mark on one or all of these categories. The average cost overrun on projects was 59%.
As you can see, developing your data integration in-house has many risks that all impact the project's cost.
Not only will you need to hire new talent, but you’ll also need to provide them with benefits, stock options, and other perks to remain competitive in today’s hiring market. If there are any delays or bottlenecks in the project, you're responsible for eating the costs associated with the delays.
Many of these risks, including the high costs, can be avoidable by outsourcing your in-house development for your data integration needs.
Benefits of Outsourcing your Software Development
It bears repeating that the risks associated with developing in-house may not outweigh the benefits. If that's the case, consider outsourcing your data integration needs to a trusted third party.
Here are some of the key benefits to consider while evaluating your software development outsourcing needs:
Establish proven processes and workflows
Data integration vendors or outsourcing partners (like Integrate.io) are experts in their crafts.
Their entire business model is dedicated to knowing the ins and outs of development. Likely, the partner you choose will already have insight into how your project needs to be managed.
They will also come with existing business processes and industry or application-specific competencies to provide expert recommendations. They know how to collaborate efficiently and work quickly while not compromising quality.
By outsourcing your development, you'll save countless hours. You won’t need to worry about hiring and retaining talent, workflows, processes, and other details that the vendors will manage.
Vendors will schedule status calls with you and the team to scope the necessary information, report on project status, and manage timelines.
Once the project is completed, vendors can provide additional managed service support, which saves your company the headache of needing to upkeep and manage the solution after the fact.
Ability to scale as needed
A change in business requirements mid-project can be costly.
You effectively increase your scalability by outsourcing to a development agency or an outsourcing partner. The in-house development process, conversely, can be costly if you face a change in business requirements mid-project. If you need to scale up, hiring development teams will take time. If you need to scale down, firing could hurt the performance of the rest of the team.
Since you'll gain access to an outsourced team, your outsourcing partner will manage the resources needed for the project, and you won’t be incurring additional hiring costs or hassles.
Using outsourcing services will also improve your time to market.
Readily access your vendor's expertise
By hiring a vendor, you gain access to the existing talent on their team. Vendors hire top talent who are experts and specialized in their craft. Through outsourcing, you can benefit from the top talent in the industry without the high costs and risks associated.
You won’t be responsible for training costs, hiring, or firing. The development teams assigned to your project will have worked on similar projects, which can give you confidence that data integration will be completed the first time correctly.
Realize long-term cost savings
By outsourcing your development, you can mitigate risk while saving costs in the long run.
Since you're effectively only paying for what you need, you can save costs while ensuring your project is completed on time.
Risks of Outsourcing Your Development
Outsourcing development has become a popular strategy for businesses looking to reduce costs and access specialized expertise. However, there are also potential risks associated with outsourcing, which should be carefully considered before making a decision.
In this context, we have a separate article to explore some of the common risks of outsourcing your development, such as quality control issues, communication barriers, intellectual property concerns, and data security risks. By understanding these risks, businesses can make informed decisions about whether or not outsourcing is the right approach for their particular needs and circumstances.
Read More: Why Companies Outsource Development
How to Find the Right Vendor for your Data Integration Needs
If you’ve decided to outsource your development and data integration needs, you’ll need to find a vendor that is the right fit for you. It’s essential that you ask the right questions and find a business that is invested in your success as much as you are.
Consider the following when evaluating data integration vendors:
- Does the vendor offer the flexibility you were looking for? Are there self-service options allowing you to integrate your data with little time and coding expertise? Or do you need a custom solution that will require managed services?
- Will the solution be as extensive as you need it to be? Will you be able to combine all your data sources and send them to one destination easily? Or will there be additional work required by your team?
- How much support does the vendor offer after your data is integrated?
- Does the vendor in question have past successes that they can provide? The right vendor will be able to highlight a successful track record of past projects that could be similar to yours.
Why Integrate.io Should be your Preferred Vendor
If you’re considering any data integration or suffering from existing integration problems, Integrate.io’s new ETL platform with reverse ETL capability is for you. We offer a cloud-based, visual, no-code interface that makes data integration and transformation hassle-free.