In-house vs. Outsourced Software Development: What to Choose for Your Company?

Software development is certainly not a piece of cake. The first question you will face is who will develop your software: an in-house team or an outsourced company. Both options have pros and cons, as well as scope, features and nuances. 

In this article, we break it all down for you. Read our guide and decide who to trust with your company’s software development process.

In-House Software Development vs. Outsourcing: What Are the Differences

Let’s start with the in-house team. The whole point is in the title. You take responsibility for bringing in staff to the software development process or hiring people if there is a need for more workers with the proper skill set. You build a team that will be part of your company. If you choose this option, be ready to look for specialists in the following professions.

• Project manager.
• Designer.
• Developer.
• Content creator.
• QA (quality assurance) etc.

Let’s imagine the team-building process. In 90% of cases, businesses hire new employees because they lack workers with the necessary skills within the company. So, you have to post job vacancies, collect and analyze CVs, interview candidates, organize onboarding, and so on. Later, you’ll pay salaries, sick leaves, vacations, etc.

Now, let’s look at the other side of the coin. The outsourcing market is growing rapidly from year to year. This option makes modern and high-quality software accessible even for small companies that cannot afford to maintain an in-house team. So, outsourcing involves cooperation with a separate agency, which already has specialists with the necessary knowledge, skills, expertise, and experience on its staff. You can outsource the entire project or just some tasks.

In-house Software Development: Pros and Cons for Businesses

By choosing this option, you get the opportunity to build a team that fully meets the requirements and needs of your business. Yes, you’ll spend a lot of time and effort, but you will get a great result. If we talk about large corporations, such as Google, Microsoft, Apple, Amazon, Yahoo, and so on, they have sevduperal developer departments in their staff structure. So, let’s talk about the benefits and drawbacks of such a solution.

Benefits of Developing Software In-house

You can use an in-house team to perform various development tasks, involve employees in different projects, of course, within their working hours and agreed responsibilities. So, let’s cover the benefits first.

Understanding Business Goals

The team working within your company structure clearly understands the policies, culture, and core mission of the business. You can be sure that the software (whether a mobile application, desktop program, or online system) fully meets the generally accepted goals and objectives.

Total Control Over the Project

You can get complete information about the development process, progress, and challenges faced by developers at any stage. Absolute transparency and full access to the project will help you control its implementation.

Better Communication

When all members of your development team are in one place, communication is most effective. Even if specialists work remotely, organizing an online conference to discuss current tasks is possible.

Make Changes Quickly

As soon as you notice the need to change, you can discuss it with your team and get them to do it. With in-house developers, you’ll receive the highest possible level of technical support.

Protection of Intellectual Property

Of course, you would not want your software, in whole or in part, to be used by others. Think about data protection in advance. When looking for employees for your in-house team, remember to write a clause in the contract that provides for strict liability for disclosing or stealing project data.

Disadvantages of In-house Software Development

Despite all its appeal, in-house teaming also has drawbacks, which you should be aware of before starting the development process. Let’s take a look at the critical downsides that may influence your decision.

High Cost

Monthly salary, bonuses, sick leaves, vacations – this is not a complete list of expenses for full-time employees. If your business can afford it, no problem. However, maintaining an entire department may be impossible if the company’s budget is limited.

Difficulties in Finding Talents

You may receive hundreds of resumes for a developer job, but none are suitable. Even though there are many specialists in this field, it isn’t easy to find experts.

Team Building Time

From posting a vacancy to when the employee starts performing his direct duties, a month may pass, sometimes much longer. Are you willing to wait?

The Scaling Challenge

If your company is rapidly growing and developing, you should look for new specialists, ensure the growth of employees within the team, and find ways to retain experts.

Software Development Outsourcing: Pros and Cons for Businesses

Outsourcing software development is an excellent alternative to building an in-house team. This solution allows you to kill two birds with one stone. You get the results you seek and don’t need to worry about finding specialists and organizing their work.

Software Development Outsourcing Benefits

Even large corporations like Google, which employs more than 27,000 software engineers, often use the services of outsourcing companies. Why can this be beneficial? Let’s discuss the advantages in more detail.

Cost Optimization

In this case, you pay not for the time employees spend at the workplace but for the result.

Good Quality 

Outsourcing agencies have qualified and experienced specialists of various profiles on their staff. You can be sure that even the most challenging task will be completed flawlessly.

Easy Scaling

You can outsource one or more projects. You are not limited in this matter. You don’t have to wait for the team to finish one project and start working on the next. Save your time.

Faster Time to the Market

If you signed a contract with an outsourcing agency today, specialists will start working on your project tomorrow. Contrast that with an in-house team-building process that can take months.

Access to the Latest Technologies

If you manage an in-house team, you must provide them with the tools they need to do the job. The outsourcing company already has it; you will not pay separately for subscriptions, servers, etc.

The Pitfalls of Outsourcing Software Development

Is everything that bright and carefree when outsourcing? Of course not. There are some pitfalls that you should consider.

Less Control

To get an update on the project, you should contact another company that will need time to prepare the reports.

Possibility of Communication Problems

Imagine a situation where your project manager doesn’t respond at the right time (on a weekend, on vacation, or when sick). Unpleasant, right? Although reputable agencies do not allow such situations.

Making the Decision: What is the Right Choice for Your Company?

What to do: in-house or outsource? Every company chooses one or the other based on business goals, budget, urgency, and other factors. 

For example, if you have limited time and money, you may choose to outsource. If you want to implement many projects or make software development the main product, then build an in-house team. You may also consider a hybrid approach. 

Either way, we encourage you to consider the benefits that outsourcing can bring to your business. If you have any questions, feel free to contact us for a consultation.

Editorial The content-marketing team at our IT agency. We have a deep understanding of both people and technology.