The term “outsourcing” has a negative connotation with a lot of people. So I’d first reframe the question as to whether you feel comfortable managing a distributed, remote team or having everyone in one place? The answer to this question can be substantially impacted by the type of project you are working on (ie hardware vs software, do you need people on site to do product testing, etc) and also your experience level managing distributed teams.
I am a strong proponent of lean startup and design thinking principles when building a software product and I think a lack of adherence to these principles is what causes so many “outsourcing” experiences to end in disaster. This is a story I hear over and over, “We found a team on UpWork, they told us a reasonable price for our entire project and then it ended up taking 5x as long, we checked in every 2 weeks and they just kept building the wrong things”. Anyone contemplating doing this…if you want to just send me 50% of the money and keep the other 50%…you’ll probably end up in the same place but with 50% more money.
If your answer to the question of “whether you feel comfortable managing a distributed team” is “yes”, then the benefits of outsourcing may outweigh the costs for you. The financial savings can be substantial and access to a global and flexible talent pool can make it much easier to scale your team up and down quickly without needing to go through the arduous process of bringing on FTEs. This can be especially valuable for startups or large companies looking to prototype new products and explore new markets. It can eliminate red tape in testing new ideas and also allow for budget allocation from more easily accessed pools of money within larger companies.
The outsourcing team that you choose is vitally important. There are merits to both woking with an agency and also with individual freelancers. An agency can offer you much faster access to vetted talent and may already have well developed processes for working with partners. Their employees may also benefit from internal training and professional development programs within their organization. And most of all, a good outsourcing company is likely to be reliable and will be able to assist in hiring specialized team members for you (in the event you need them in the future). A freelancer can also be good for smaller projects because they may be more open to working below certain budget thresholds (ie projects that a larger company might not be willing to consider).
Whether you opt to go the agency or freelance route, the most critical element to your success will be adhering to a high communication, scrum process. You should insist on daily stand up calls to discuss progress and also be very diligent and thorough about breaking your project down into individual tasks complete with clear mocks and easy to understand user stories. You should act as the Product Owner and make sure there are no proxy Project Managers dis-intermediating you from the actual development and design team. Playing telephone doesn’t work with general communication, so it certainly won’t work with something as involved as a software project.
So to summarize, first ask yourself “am I comfortable managing a distributed team” and ignore the stigmas about outsourcing. Those are a result of poor implementation.