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In-House Vs. Outsourced Software Development? A Guide To Help Decide What’s Better For You

Category: Development

If you want to create a website, mobile application, or management software for your business, you might be confused about whether to perform the task in-house or acquire outsourcing services. It’s indeed a never-ending dilemma.

When it comes to developing software, the topmost priority of every firm is to produce the highest quality product within the shortest span of time. However, hiring personnel who possess the desired level of skill set and talent isn’t a feasible choice every time. 

First of all, the probability of having employed just the right person is quite low. Second, the chances that the selected person will get along with the company’s budget and culture are even lower.

These are some of the many reasons behind the rapid rise in the number of companies that prefer to outsource software development. It may come to you as a surprise but more than 50% of the businesses in Europe hire external help for developing websites.

Source: Eurostat (online data code: isoc_ske_fct)

To Outsource Or Not To Outsource?

Though outsourcing has become a widely used practice in the software industry, a hard-and-fast rule on whether you should go for this approach or not cannot be defined. 

Every business has to take this decision themselves after considering their budget, time requirements, product expectations, and any other limitations.

In case you’re also facing the dilemma of choosing between in-house or outsourcing, we are listing the pros and cons of the two approaches to help you make your decision.

In-House Production  

As the name suggests, in-house development refers to when you develop a product within your company, using your own equipment and workforce. Let’s take a look at the pros and cons of this approach:

Advantages

  • More Control: In this approach, you enjoy full control over the development process. You have the liberty of guiding and coordinating your team members as you want. 
  • Better Communication: In-house development enables you to readily communicate any suggestions or issues with the developers. When you have all of your employees working under the same roof, you can assess their performance as well as address any matters within no time. 
  • Rapid Modifications: Since your staff is always there with you, you can make alterations and modifications to your project immediately. 
  • Company Culture: In-house working allows you to develop your company’s culture. A healthy work culture ensures greater project success due to better engagement of employees with the company’s goals. 
  • Enhanced Company Profile: A good company profile can only be built by the company’s internal expertise and experience. A stronger profile that is created as a result of in-house working can act as one of your biggest competitive advantages in the long run. 

Disadvantages

  • Recruitment Delays: Building an efficient in-house team requires you to take time-consuming tests and interviews for hiring the best talent out there. According to Glassdoor, the average period for hiring a software expert is around 30 days. And it is expected to increase with time. So, the process of selecting the right individual wastes a lot of time. And it’s something you can never ignore while meeting strict deadlines.  
  • Adjusting New Hires: To build an in-house development team, you can’t just hire an employee and sit back. You have to help them adjust into your company’s culture while making sure that they fit into your budget umbrella as well.
  • Management: Management can sometimes become difficult when you establish an in-house team. As a manager, you probably lack the software skills that are required to oversee your technical developers. Supervising them would also divert your time and your core management would take a hit. So, you need an expert team lead to supervise your techies.

Outsourcing

As mentioned earlier, outsourcing refers to a company seeking the services of a third-party vendor to do projects that can’t be completed in-house. Let’s take a look at the pros and cons of this approach:

Advantages

  • Time-Saving: The biggest advantage that makes outsourcing a popular choice is time-saving. The moment you decide to outsource your project, you have at your disposal countless experienced professionals from around the world. You don’t have to spend time in recruitment, training, and helping the recruits adjust. The time that you have saved can be invested in a lot of other profitable ways.
  • Skill And Experience: Outsourcing allows you to readily access skilled and experienced workers. In most of the cases, the third-party professionals would have previously completed projects similar to yours. So, after getting product specifications from you, chances are, they would turn it around quickly and with the best possible results. 
  • Improved Efficiency: Most of the small companies resort to outsourcing since they lack the required resources, be they equipment or technical knowledge. So, by outsourcing, they achieve the efficiency that they could otherwise never acquire.
  • Expert Consultancy: The professionals you access through outsourcing can help improve your product. Since the third-party developers are constantly in contact with other businesses, they’re better aware of what’s going in the market. So, the modifications proposed by them can make your product both unique and competitive. 

Disadvantages

  • Loss Of Control: The biggest disadvantage is that you lose control when you outsource a product to a third party. In contrast to the people working under your roof, you can’t access the external developers at all times.
  • Lack Of Communication: Communication with an outsourced partner comes with its own challenges. No matter how frequently you follow up with your instructions, there’s always going to be a communication gap when you choose to work with an external vendor.
  • Security And Other Risks: Since the outsourced partner has access to your sensitive data, there’s always a risk of security breach, corporate espionage and intellectual property theft. 

Does Outsourcing Save You Money?

You’d have often heard that outsourcing saves you money. However, this isn’t correct in all cases.

It’s true that you don’t have to spend money on advertising vacancies, conducting interviews, making workspace arrangements, and purchasing software and hardware. Still, outsourcing isn’t a cheaper substitute every time.

When you acquire the services of a software house, you pay them for their work, equipment as well as the expertise they have developed over the years.

Outsourcing providers continuously invest in keeping their teams updated with every latest innovation there is. And this is something that also reflects in their invoices.

The Most Important Thing: Choosing The Right Software House

The importance of choosing the right outsourcing partner can’t be overemphasized. Working with a reliable outsourcing provider is important because:

  • They would make sure that you don’t suffer any delays.
  • They would keep updating you time to time about their progress and any changes that they made in your instructions.
  • They would make sure that their product is sustainable and has what it takes to compete in the market.

Conclusion

While in-house development helps you build a competitive profile, it creates problems like:

  • Recruiting the right talent
  • Possible employee turnover
  • High equipment costs
  • Long-time results

On the other hand, outsourcing ensures a faster delivery, a wide pool of talent to choose from, and indirect access to the latest technologies.

However, it poses concerns like:

  • Loss of control
  • Lack of communication
  • Security and other risks

It can be hard to decide whether to follow the in-house or outsourcing approach. The truth is, both approaches work fine in different settings.

Outsourcing is the best approach when you’re up against a one-time project. It is absurd to invest in hardware, software, and personnel that may not be needed in the future.

In case of ongoing or long-term projects, it is generally preferable to do it in-house. 

However, there’s one more option. You can go for a hybrid approach by combining both outsourcing and in-house development.

At The Web Ally we offer development staff augmentation whereby our developers will essentially become a part of your in-house team.

If you lack expertise for a project, you can seek external help while continuing to develop an in-house ability. If you are concerned about security and control, then this hybrid approach is probably the most fitting for your business.

On the other hand, if you would like to consider outsourcing, give us the chance to explain to you how we operate and explain the procedures that we have in place to overcome issues of control, communication and security.

Contact us today, to discuss how outsourcing can benefit your company

Let us help your business succeed.

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