IoT (Internet of Things) development has become imperative for businesses seeking innovation and growth in today’s fast-paced and interconnected world. With nearly every new device being IoT-enabled, the scope and complexities of IoT development are growing exponentially. 

As an IoT company, balancing your in-house development team with outsourced resources is crucial to quickly adapt to emerging technologies, market needs, and global shifts. However, determining the right in-house to outsourced-ratio and managing collaborations amidst a dynamic environment can be challenging.

This blog post will discuss several factors to consider when balancing internal and external IoT development resources and provide tips to maximize productivity in a flexible setup.

Understand core vs non-core capabilities

The first critical step to balancing the in-house and outsourced dedicated teams is identifying your organization’s core competencies and non-core functions. Core capabilities directly relate to your products/services and competitive differentiation. These require in-house expertise and control, like proprietary hardware/software, algorithms, security, compliance, etc.

Non-core activities provide support but do not impact your unique value proposition. Consider outsourcing non-essential functions like mobile app development, UI/UX design, quality assurance testing, backend infrastructure, etc. This frees internal resources for strategic work while leveraging specialized outsourced skills.

Capabilities of IoT development management

Evaluate essential skills in the present and for the future

With new technologies emerging at unpreceded pace, it’s difficult for any companies to predict the exact upcoming trends. However, it’s possible that you can manage your workforce to be ready for whatever is changing. Retain capabilities in-house that will be essential for your medium-term roadmap and it’s better to outsource short-term, transitional, or niche skills.

For example, AI/ML experts may be outsourced now but hired later as predictive analytics become central to IoT offerings. Similarly, retain hardware capabilities needed for product iterations but outsource one-time prototype development.

Moreover, creating an objective decision matrix is one practical way for companies to methodically analyze myriad considerations when devising their outsourcing strategy. A matrix structure provides a transparent, data-driven approach to arrive at well-rounded conclusions.

IoT development strategy

This dynamic evaluation ensures flexibility while securing competitively differentiating capabilities internally.

Few things to keep in mind

When it comes to managing more than one workforce, there are things that needs you to be mindful of to bring out the best of the both worlds and help you to optimize the work performance.

Business scalability

While the in-house team can help to maintain and control core functions of your companies, outsourcing gives the flexibility to scale development capacity up or down as demand fluctuates rapidly. IoT products often see unpredictable usage spikes. Having outsourced partners on standby allows for quickly swelling project teams without long-term overhead.

Moreover, external collaborators can be released when specific project work wraps up to avoid expenses of underutilized in-house resources. Strategic outsourcing builds agility to respond swiftly to market dynamics.

Location and time zones

When deciding which skills to hire and outsource, it’s necessary to be mindful of the outsourcing location and time zone differences. On one hand, core functions require supervision and in-person brainstorming may be best kept local. For example, product management and security oversight work best on-site. 

On the other hand, non-critical support roles like documentation, testing, and maintenance can leverage nearshore and offshore resources well. You can optimize collaboration by allocating work intelligently based on location priorities and regional handoff needs. Also, by taking advantage of cloud tools, you can strengthen remote coordination between two teams.

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Transparency and knowledge transfer

Outsourced collaborations thrive on transparency. Frequently share project status, pending needs, technology roadmaps, performance reports, etc. build a feedback-rich culture.

Knowledge transfer between internal and external teams is equally important. Documentation, training, and rotation programs instill outsourced partners with your domain expertise over time. This grooms external “extensions” of your in-house team with familiar work processes.


Overall, there is no perfect in-house to outsourced ratio for IoT development. Organizations must dynamically assess factors like skills, locations, and partnerships and adapt the collaborative model accordingly. 

With proactive management and knowledge-sharing, a balanced hybrid approach unlocks scalability, access to diverse talent, and agility to adjust as industry dynamics evolve. Striving for optimal collaboration is vital to efficient IoT innovation.

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