Economic Development News & Insight


The Smart Alternative to Outsourcing your Tech Projects

Mentor Works / November 9, 2015

The Smart Alternative to Outsourcing your Tech Projects

Small businesses are often required to make tough decisions when it comes to completing projects. It can be difficult to decide whether to outsource the project to a contractor or hire internal talent. Small-and-medium-sized enterprises (SMEs) will find benefits in addressing their internal technical ability to complete projects. In some cases, limited time or technical expertise will prevent SMEs from completing projects internally, however this article will mention some great resources to improve businesses’ technical prowess. Although it can seem easy to use contractors to complete tech projects, there are clear advantages to hiring for a technical skillset and fostering internal talent.

Choosing Between Internal and External Technical Labour

Consider how difficult it must be for businesses without a website to attract clients in today’s Internet-driven society. Up to 90% of consumers will use a search engine during their purchase decision, making it one of the most important touchpoints a business can create with potential customers. Consulting a website design firm to create a fully-functional, quality website can equate to significant project costs with ongoing maintenance fees after the website is launched.

Outsourcing projects will enable businesses to complete a task successfully without making a substantial change to their organizational structure. As per the example above, it would allow the business to build their website and become interactive with customers. But what happens when the site breaks down or needs routine maintenance? Once again the business owner will need to bring in the contractor to solve the technical challenge for an additional fee. Although there are financial advantages in some areas, requiring a contractor to return several times will increase this fee and make the financial benefit less practical. Likewise, third party contractors do not share the same understanding of the business and its model, strategies, and vision as an employee does.

Using internal talent presents options to entrepreneurs which could be better in the long-run. Existing talent, should members of your organization have the capacity to take on new projects, will eliminate additional labour expenses and a training course can help to fill in missing skillsets. If small issues arise (such as broken website links or page layout errors) then there is someone who can efficiently deal with the situation in a cost-effective way. Don’t have someone on your team who possesses the technical knowledge to complete the task? Training your employees is an investment which provides greater organizational flexibility moving forward.

Foster Your Internal Technical Talent with Government Funding

Small business owners are encouraged to complete technical projects internally and develop their team’s skills. Federal and provincial governments provide funding to assist SMEs reduce the incurred costs associated with accomplishing tasks. Provided below are three government funding programs which you can leverage to increase your internal technical talent.

Hiring Grants for Post-Secondary Technical Grads

I mentioned training existing employees, however there is an alternative related to hiring technical talent. There are several hiring grants available throughout the spring and summer each year to help Canadian businesses hire recent post-secondary graduates into a technical role, covering up to 50% of their wages. These positions can span from 3-12 months, meaning that businesses can hire them for a project and let them go once the project is completed if they do not wish to retain the talent.

Canada Job Grant Funding to Train Company Employees

The Canada-Ontario Job Grant (COJG) is a provincial variant of the federal training grant, the Canada Job Grant. Small businesses in Ontario can use COJG to enrol their employees in third-party training. This is a great opportunity to bolster you workforce’s technical aptitude for areas such as software, website development graphic design, systems administration and more. COJG will contribute up to $10,000 per employee (up to 66% of eligible training costs) to receive formalized training which provides them with those necessary skills. This program has been effectively used to pay for expenses such as college and university courses, software training, and product vendor training.

IRAP Government Funding for Internal Business Innovation

Industrial Research Assistance Program (IRAP) is a government funding organization that provides research grants to enable businesses to overcoming internal technical challenges. One particular grant offered by IRAP called the Accelerated Review Process (ARP) helps businesses develop new products or improve processes with up to $50,000 in grant funding covering both technical labour costs and subcontractors. While up to 50% of contractor costs can be recovered through this program, up to 80% of internal labour costs can receive funding. Funding will cover a large portion of your internal talent’s labour and businesses can apply for IRAP funding each year.

NSERC Engage Funding to Aid Post-Secondary Research Collaborations

Although having internal technical talent is advisable, there are some situations where it may be better to outsource the project; fortunately, there is funding for this type of activity as well. Unlike the previous two programs mentioned, NSERC Engage helps SMEs with a specific R&D project that they do not have the internal resources or talent to solve, letting them access to $25,000 in grant funding. This funding will go towards a university professor and a team of graduate students to help solve your technical challenge over a period of 4-6 months. This financial contribution will go directly towards the project expenses. In contrast to hiring a contractor for technical abilities, this option provides a cost-effective solution to projects that can be 100% outsourced and that have an innovative element to them that would excite the professor, as professors will apply to potential projects based on their interest. After the project is complete, the business will receive their project deliverables directly from the professor.

Find Government Funding for Internal Technical Challenges

Whether you are looking to create/update your website, rebrand, or adopt a new software system, Canadian government funding can help your business foster an internal champion to manage these technical project for a more affordable, sustainable solution. In addition to research and development grants, small business funding is available for activities such as business expansion, technology adoption, and hiring and training. Does your business qualify for government grants and loans? Learn more about specific funding types or contact Mentor Works at any time to discover how government funding can help transform your small business.

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