In an era where companies constantly seek ways to reduce costs and increase efficiency, outsourcing has become a popular solution. Yet, despite its appeal, the downsides of outsourcing—particularly to large, low-cost teams—are often overlooked. Our experience has taught us that bigger isn’t always better when it comes to UX design, and outsourcing inefficiencies can be overcome.
The Boeing 737 MAX example: A lesson in outsourcing gone wrong
The Boeing 737 MAX serves as a stark reminder of how critical hiring decisions can be. Boeing outsourced key software development to overseas engineering contractors from India to reduce costs, from a big and reputable company. Later it was discovered that the engineers were paid as low as $9 per hour, far below the industry standard for experienced developers, even in lower-cost countries.
The savings were short-lived: the $9/hour engineers lacked the expertise and the big structure of the company made them lack the contextual knowledge required for such a complex project, leading to subpar work that required extensive corrections.
When the costs of project delays, management overhead, and rework were factored in, Boeing’s true cost per hour rose to about $80, well above what they would have paid for experienced developers. More importantly, this decision played a role in the safety issues that delayed the plane’s release, caused tragic accidents, and damaged Boeing’s reputation​. (Supply Chain World magazine)​(Taipei Times).
Although this is an extreme case, it illustrates a broader issue: cutting costs at the expense of quality can lead to disastrous results. What seemed like a cost-saving move became much more expensive when you factor in delays, rework, and the damage to Boeing's reputation.
This case highlights an important point: hiring large and reputable outsourcing companies doesn’t necessarily mean you’re getting better results. Often, it means you're getting engineers or designers who may not have the right experience or context for your project.
The reality of hiring large outsourcing firms
When companies choose to outsource, they often opt for firms that boast large teams and impressive resumes. But just like hiring an employee with numerous diplomas and prestigious work history, the reputation of an outsourcing company doesn't always equate to actual skill and a successful outcome. A big firm may come with layers of management, communication gaps, and engineers who lack the specific context needed to truly understand your project.
At Pengreen Design, we keep our team small and nimble for a reason. With a small number of members, but experts, we maintain a deep understanding of each client’s goals, challenges, and needs. This allows us to deliver results faster, with fewer revisions and less friction. When everyone on the team is aware of the full context of the project, there’s no room for misunderstandings or unnecessary rounds of corrections.
The hidden costs of outsourcing
Outsourcing, particularly to low-cost countries, may seem like an effective way to cut budgets. However, the hidden costs often outweigh the initial savings. For example, Gartner reports that 50% of outsourcing contracts exceed their original budget due to unforeseen complications. When the costs of rework, management overhead, and delays are factored in, companies often end up paying more than they would have by hiring a small, experienced team from the start​.
A University of Manchester study also found that companies outsourcing complex tasks can experience up to a 30% loss in productivity due to communication and coordination challenges. These inefficiencies lead to longer project timelines, missed deadlines, and increased costs particularly damaging in UX design, where understanding user behavior, context, and business goals is critical.
Small, focused teams mean higher efficiency
Larger teams often struggle with efficiency due to their size. With more people comes more complexity—more communication channels, more handoffs, and more opportunities for things to go wrong. On the other hand, a smaller, experienced team like ours at Pengreen Design can move swiftly and seamlessly. Each member knows the project inside out, reducing the need for constant back-and-forth and allowing us to stick to our estimates and meet deadlines.
Unlike many big firms, we provide estimates based on our experience—and we meet those estimates. Clients know what to expect, and we maintain a reputation for delivering on time and within budget. It’s not about being cheap; it’s about being efficient.
Hiring for skill, not size
Whether you're hiring an internal employee or an external team, the process should always prioritize skills and experience over sheer numbers or impressive credentials. Outsourcing to a large team may seem like a safer bet, but if the individuals working on your project aren’t skilled or lack the necessary context, you’re likely to face delays, cost overruns, and subpar results.
When it comes to outsourcing, the key to a successful project lies in hiring teams that are experienced, skilled, and deeply involved in your project’s context. The biggest questions should be: can they handle the service? Can they fully immerse in our case and deliver what we need?
At Pengreen, we’ve intentionally kept our team small because it works. Each person is an expert in their field, and we operate with a level of collaboration and context that large outsourcing firms can’t match. This approach has served us and our clients well for over a decade, providing a unique cost-benefit balance between internal employees and outsourcing. We've seen firsthand how a small, tight-knit team can deliver more value and efficiency than large outsourcing firms ever could.
EN_US
PT-BR