Comparison: in-house vs. outsourced software development

Do you want to hire expert skills to work on your project but can’t decide between in-house and outsourcing? Well this is a common struggle for many startups. Both options are great ways of ensuring that you end up with products that customers enjoy.

The number of companies choosing to outsource talent has increased over the past few years. This is mostly because it takes away the stress of searching and hiring developers while also cutting costs. However, many still recognize the need for having an internal team that prioritizes business goals and growth. With that said, what is the best option? Let’s dive into all that you need to know about inhouse vs development outsourcing, and check when each is the best option according to N-iX.

In-house option

For in-house software development, you rely solely on your team to work on a project. Also, the tech stack that you use belongs to your company. Therefore, you have full control at all stages of development.

Pros: Full control

First of all, you can get full control. With an in-house team, management is easier. Sure, you have access to all workflows and processes. Being able to hire specific talent puts you in more control over who works on a project. You have full control over:

• Resource allocation
• Hiring human resource
• Decision making
• Development processes

Continuity

When you invest in your own team, developers can improve skills over time. By providing the necessary training, you enjoy the long-term benefits of having highly specialist developers.

Over time, the employees familiarize themselves with your company’s goals and culture. This eliminates the need to continuously keep orienting new professionals. Transitions are smoother with enhanced workflow continuity.

Team motivation

Developers on an in-house team can get promoted over time. This creates employee motivation and room for growth. Motivated employees are likely to produce quality results which leads to improved customer satisfaction. There are opportunities for career advancement.

Cons: It’s expensive

The biggest disadvantage of hiring an in-house team is the costs. This covers recruitment, infrastructure, and tools. If you want to get the best skills, it will cost a lot of money. Some bigger enterprises may be able to afford this but it may not be your case.

Slow workflow and restricted skills

When you hire your employees, it can take a long time to get the required professionals. Also, you have to invest time and money in training new staff which will slow down progress. This results in teams failing to meet set deadlines.

When you have access to only an internal team, it limits the skills your company can access. This removes the opportunity to discover new talent that may be crucial for projects. Without fresh talent it is difficult to have a new perspective and remain innovative.

Use cases

So when is using an inhouse team a good choice? Here are some cases:

• Projects requiring close collaboration
• Projects with sensitive data
• Customized projects with ongoing work
• Having sufficient funds

Outsourcing option

This involves assigning certain tasks to another company. For example, the development outsourcing company provides experts, solutions and tools for your project. It is just effective and gives access to talent that may be difficult to hire and find.

Pros: Cost effective

Outsourcing is a great way of cutting on costs. It allows you to avoid hiring employees on a permanent basis. This is an effective way of reducing expenses toward salaries and benefit packages. There are other expenses that you can avoid cutting costs including training staff.

Access to wider expert skills

So you can get the best skills on the market on your team. By outsourcing software development, you get expert skills that may be otherwise difficult to access, considering how competitive software development is. Also, you are not restricted to local talent.

Outsourcing agents provide experts from different parts of the world at an affordable rate. This means that even small businesses can get the best skills without spending significant amounts.

Competitive edge

Software development is highly competitive. Not only do you have to get the best skills on the market but also provide quality products. This means you have to get access to the latest innovations that facilitate development. Paying for the latest tech can be expensive. By outsourcing, you not only get the needed skills but also the best tech stack to build software.

This puts you in a competitive advantage against others in the industry. Other ways you remain competitive include:

• Reduced time to market
• Optimizing operations
• Improved customer satisfaction

Improved productivity

Most companies have created processes that maximize on efforts and promote productivity. This means tasks can be completed faster with little to no errors. While the outsourced team focuses on the project, the inhouse developers can put all efforts into the core activities of your business.

Cons: Possibility of reduced control and involvement

Actually, there are not that many cons. However, depending on the company and contract, one of the challenges could be that you don’t have full control. This usually means you are not able to supervise teams working on a project. But it is also a doubtful question as it all depends on your agreement with the outsourced company.

Communication barriers

Today, many developers speak English and you can be certain in it. With a reliable company, it would not be an issue at all unless you want to find contractors who speak other specific languages.

Communication is important as it allows you to understand each stage of development. You may have difficulties with communication, especially when you work with offshore software development agencies. Working with teams in different time zones may also be a cause. Another hindrance to communication could be internet connectivity (but these are not really an issue if you work with a reliable company who proves to provide proper support).

Use cases

After considering the pros and cons, there are certain cases where outsourcing is the way to go. These include:

• Your team has reached a skill limitation
• Lack of the latest innovations
• Projects requiring expert skills
• Rapid growth
• In-house teams lack a competitive edge

Final thoughts

At the end of the day, the choice will depend on your needs. If you want to cut on costs then outsourcing development would be the best option. However, you may have to compromise on having full control. Because communicating is important, make sure the provider emphasizes on this. This will give you a better idea on the state of a project at all stages.

For large companies that have the funds, hiring an inhouse team may be a great idea. However, keep in mind that with new innovations, you will need experts. In such cases outsourcing can still be useful as you won’t have to invest in hiring a team of specialists permanently.