From outsourcing to ownership: How we brought development in-house without breaking delivery

Outsourcing worked – until it didn’t.

After Akirolabs achieved early market validation and onboarded its first enterprise customers, outsourcing began to create strategic limitations around scalability, intellectual property (IP) ownership, security and delivery execution.

The challenges started after the first enterprise customers confirmed product-market fit. At that point, delivery speed became directly tied to business growth. Product quality expectations increased. Infrastructure and security requirements became stricter. Investors started asking difficult but fair questions about IP ownership, operational dependencies and long-term scalability.

Most importantly, engineering execution was no longer just an operational function – it became part of the company’s strategic advantage. That was the moment when the founders decided the company needed dedicated technology leadership to address these challenges. This is how I joined the company at the beginning of 2023. As VP of Engineering and a bit later as CTO, I led the transformation (usually known as insourcing, repatriating or backsourcing) from an outsourced model to an internal engineering organization while maintaining product delivery continuity and preparing the company for the next growth stage. The process took roughly a year and involved not only technical migration, but also organizational design, hiring, process development, infrastructure modernization and cultural transformation – everything from the ground up.

Building an internal engineering organization while still delivering

One of the biggest misconceptions about insourcing is that it is primarily a technical project. It is a leadership and execution challenge.

When I joined the company, there was effectively no internal engineering structure, limited visibility into the existing system and no clear long-term technical strategy. My first months were dedicated to understanding reality and I began with a comprehensive assessment of the codebase, operational risks, documentation quality and knowledge dependencies to determine the most viable transition strategy.

Very early in the process, I faced a critical strategic decision: whether to gradually assume ownership of the existing platform or rebuild it internally. To make that decision, I evaluated four distinct transition models ranging from limited management insourcing to a complete internal rebuild.

After assessing the technical, operational and long-term business implications of each approach, I selected the most demanding option: rebuilding the product internally while maintaining uninterrupted delivery for existing customers. Although riskier in the short term, a full rebuild offered the clearest route to complete IP ownership, architectural flexibility and long-term scalability.

At the time, this decision ran counter to the approach typically taken by startups in similar situations. Most organizations gradually assume ownership of an existing codebase to minimize short-term risk and preserve delivery capacity. My assessment was that the accumulated architectural debt, fragmented knowledge distribution and long-term maintenance risks would ultimately make a phased takeover more expensive and less scalable than a controlled rebuild. The strategy required significantly higher execution discipline, but it allowed us to establish complete ownership of the platform, eliminate inherited constraints and create an architecture capable of supporting enterprise-scale growth.

The next challenge was hiring.

In Germany, hiring can easily take four to six months – mostly due to a typical 3-month notice period, which is incompatible with startup timelines. We solved this by building a hybrid organization structure early: a lean internal core team combined with carefully selected contractors. Instead of hiring only narrow specialists, we prioritized experienced generalists capable of operating across architecture, infrastructure, security and compliance discussions. Later, we evolved toward a product engineering model, where engineers owned broader product outcomes rather than narrowly defined technical functions.

During the first three months, we established a core engineering team of four senior engineers. Over the following nine months, the organization expanded to roughly fifteen engineers while I strategically designed and executed the transformation of the platform’s architecture to meet the rigorous deployment and compliance standards of our first enterprise clients, including Raiffeisen Bank International and Bertelsmann. This structural overhaul allowed the company to meet the deployment, security and compliance requirements of enterprise customers that had previously been inaccessible under the outsourced model. At that point, we had already achieved complete coverage across backend, frontend, DevOps, QA and security.

I also intentionally kept processes lightweight during the transition. Instead of introducing heavyweight frameworks, we focused on clarity of priorities, fast decision-making and execution discipline. We used Kanban over Scrum, eliminated unnecessary meetings, shortened the remaining ones and emphasized engineering culture over process overhead.

Another major challenge was project estimation. Because dual-track development was unavoidable until the in-house platform reached production readiness, estimation accuracy had a direct impact on budget efficiency. Despite all challenges, my initial estimate ultimately proved remarkably close to the final delivery date, differing by only about a week. Accurate forecasting under conditions of parallel development streams, ongoing customer commitments and active team formation became a critical leadership challenge. Maintaining this level of predictability throughout the transition helped align engineering execution with business planning, hiring decisions and investor expectations.

The engineering transformation enabled capabilities that contributed to Akirolabs being recognized as an IDC Innovator in Procurement in 2023, named amongst the Top 27 AI Startups in Germany in 2024, Sifted’s 100 Fastest-Growing Startups in DACH & CEE 2025 and inclusion in 2024-2026 in ProcureTech100 annual recognition of procurement technology providers shaping the future of digital procurement.

Managing risk without slowing down the business

The hardest part of insourcing is not writing code, selecting the technology stack, designing architecture or configuring infrastructure. It is avoiding disruption while the company is changing underneath the product. I successfully orchestrated the concurrent overhaul of product architecture, cross-functional engineering recruitment, infrastructure modernization and live customer operations under exceptionally tight margins.

To reduce delivery risk, we approached the transition in layers.

First, we focused on infrastructure reliability and operational readiness before feature expansion. Cloud architecture, recovery testing, permission segregation and incident management processes were implemented early, not after launch. We also introduced multiple testing stages and dedicated QA functions after learning the hard way that a “developers-only” quality control approach does not scale for complex web platforms and business domains.

Second, we established a structured knowledge-transfer process to rapidly onboard engineers and reduce external dependencies.

Third, we became extremely disciplined about scope management. One of the most common reasons insourcing initiatives fail is uncontrolled change during the rebuild phase. Every new feature request increases uncertainty non-linearly. We learned to separate strategic improvements from distractions and protect the core delivery roadmap aggressively. Throughout the transition, we successfully maintained uninterrupted customer operations by utilizing planned maintenance windows, achieved a near-zero-downtime migration and permanently doubled product velocity immediately following the migration.

Beyond the technical migration itself, the transition established a repeatable operating model for scaling technology organizations beyond the product-market-fit stage. The framework combined organizational redesign, controlled knowledge repatriation, architecture modernization and enterprise-grade operational practices while maintaining uninterrupted customer delivery throughout the transformation. While the implementation was specific to Akirolabs, the underlying principles are broadly applicable to organizations seeking to transition from outsourced development to internal product ownership without disrupting business operations.

By the time the new platform reached production readiness, I had established not only a functioning engineering organization, but also a stable operational model: internal ownership, production-grade infrastructure, security processes, scalable hiring practices and clear technology and product roadmaps.

A positive side effect of the transition was the creation of internal UI/UX and Data Science capabilities, which later became strategically important for AI product initiatives and created a foundation for the third version of the product, which we released in mid-2025.

My technical restructuring and migration to a secure proprietary platform reduced architectural risk, established full in-house ownership and helped strengthen investor confidence during the company’s successful €5M fundraising round in 2024.

The transition created a stronger foundation for scale and supported the company’s continued expansion among enterprise organizations operating at Fortune 500 scale, including Ahold Delhaize, Workday, IFF, Deutsche Bahn and others.

Lessons learned for CTOs considering insourcing

Looking back, several decisions made the transition successful, and several mistakes made it harder than necessary.

The first lesson is simple: decisiveness in strategic transition is paramount to maintaining business momentum. Rapidly evaluating insourcing frameworks and defining clear boundaries with the external partner allowed us to mitigate operational downtime and execute a highly efficient migration ahead of critical market deadlines.

Second, hire more senior people and do it as early as possible. Strong technical leaders multiply execution capacity far beyond their individual contribution. In our case, the quality of the first hires influenced architecture quality, hiring standards, delivery discipline and engineering culture for the entire organization.

Finally, culture matters more than frameworks. Processes can be added later. Ownership mentality cannot.

The biggest long-term advantage of bringing development in-house was not simply faster execution, not better code quality or operational cost optimization by over 30% after the transition which we also achieved. It was an alignment. Product strategy, engineering decisions, customer priorities and business goals became part of the same conversation instead of being separated by organizational boundaries. For technology companies operating in highly competitive markets, that alignment becomes a compounding advantage over time.

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