How to Choose: In-house Development vs. Outsourcing

in-house development vs outsourcing model
By Elena Titkova, Account Manager

You want to build your product as quickly as possible, keeping quality high but with costs in check. With this in mind, you need to make an important decision by choosing the way you’ll procure the development process: in-house development or outsourcing a software development team.

In the in-house development vs. outsourcing decision-making process, finding a single perfect solution can be challenging. To make this decision easier, read on for the pros and cons of in-house vs. outsourced development and experience-based recommendations.

In-house Development Team

In-house software development means leveraging company resources to develop or implement software according to company-specific requirements. This approach assumes that the company's forte is software development. To get increased control over development and intense project engagement within your team, you’ll need to be ready to invest substantial time and money in your team. 

Pros of In-house Development

  • Deep involvement and quick response. It allows you to maximize the customization of the in-house engineering process, including every minor tech need of your company. You can easily adjust the project to individual business needs by making appropriate changes in the development process.

  • Enhanced control. You have visibility over the day-to-day progress, know what your employees are working on and can react promptly if some stumbling blocks fall in your way. 

  • High security. Your business data and know-how aren't shared with third parties, and you keep all the knowledge gained during the project inside the company, which minimizes the chance of information leakage.

in-house development - pros and cons

Cons of In-house Development

  • Slower launch. It takes a long time to hire the proper developer (usually, it takes about 30-40 days). You have to compete with other companies and offer better working conditions in order to attract and retain top talent. And you not only have to think about getting qualified specialists, but you also need to ensure they match each other by skill set and personality in order for them to work more efficiently as a team.

  • High expenses. Both small and large-scale projects require a lot of money that needs to be invested in the initial stages: payroll, taxes, insurance, training and maintaining the IT infrastructure can be a big strain on the budget.

  • Expertise troubles. There is another classic problem with an in-house candidates pool. Naturally, gathering all the skills and roles for your team is virtually impossible. To apply specific skills, you'll need to hire a specific candidate. The same situation arises in the case the project expands. Time spent on this can be a detriment to meeting crucial deadlines.

  • Staff attrition. Another major problem of in-house software development is the attrition of your employees. After companies have invested significant resources in their adaptation, they can leave your company, and you'll have  to invest in new members of the team again, costing you both time and money.

Outsourcing a Development Team

Outsourcing today is all about optimization: instead of spending vast resources and time on growing the required competencies in-house, companies can get the needed talents faster and at a lower cost.

Benefits of an Outsourcing Development Team

  • Availability of top talents. Since there are no geographic limits with outsourcing, we can choose the leading professionals you’ll need from all over the world, including those in emerging technologies and narrow domains. Moreover, you can select lower-cost source destinations that offer a better price to quality ratio than as in your home market. 

  • Reduced costs. No expenses inherent to in-house development are related to recruitment, salaries, retention, etc. 

  • Efficient time-to-market. Benefits of outsourcing include avoiding all major hiring and staffing issues that usually occur than if you practice in-house development. You can add features that matter to your customers at any time, no matter which skills they require. This definitely shortens the timing of the product launch.

  • Flexibility and scalability. It's easier to scale an outsourced team up and down, depending on your needs. A vendor will take care of adding the right specialists to the team when the project grows and requires more personnel to manage.

Outsourcing development team - pros and cons

Drawbacks of Outsourcing a Development Team

  • Less control. The development process won’t be as transparent as in-house development, which can put a vendor's performance in question.

  • Security risks. The lack of direct in-person control and communications can possibly cause a lack of trust during project development. However, this depends on the specific contractor/developer. This disadvantage can be limited by choosing the right partner. When outsourcing, be sure that you agree on the way of reporting, acknowledgment and meeting schedules which both parties are comfortable with.

  • Communication issues. Varying time zones, cultural differences and insufficient English proficiency (or any other language) skills can become a barrier to effective collaboration.

In-house vs. Outsourcing Software Development: How To Choose

Your choice can be shaped by a general rule: if your company's core capability isn’t software development, it may become an overwhelming and costly challenge for your team to get everything right. They may lack the experience or understanding, which sadly will result in unsuccessful attempts to do it by in-house development.

But it can be smarter to outsource the project too. It’s much safer to rely on an expert who knows precisely how and has the resources to fulfill your requirements. Luckily, today the outsourcing software development market is mature, so it won’t be a problem to choose a company that suits your individual business needs. 

If you want to combine the advantages of both approaches and get the best from them, you can try a mix. This way, you can start with developing an MVP with an outsourced team and then gradually grow your in-house team for further evolution and maintenance. This alternate way is viable for those companies that already have an existing IT department. 

A dedicated team or staff augmentation may suit to keep core development activities in-house while benefiting from the outsourcing routine or, on the contrary, specific and narrow areas of development.

Takeaways

What fits one company may not work for the other. And there are a lot of aspects that are necessary to consider when deciding between in-house development and outsourcing. Think for yourself since each experience and each project is unique. 

Consider the current level of experience and the scale of your in-house IT resources, revise your project planning and requirements and hence budget before you’re ready to make up your mind. Your final selection will inevitably impact the whole project shortly and in the long-term perspective, as well as its overall success. 

Why Hire Software Developers at Solvd?

Whichever option you choose, you’ll need a reliable contractor that you can count on. The key criteria to look for when searching for the right partner should be the company’s expertise and experience. 

Solvd has the necessary experience and tech expertise to build scalable, complex and successful projects while respecting deadlines with an excellent cost-efficiency ratio. By trusting your software development project with us, you may rest assured about the quality and performance of your digital solution.

Elena Titkova
Elena Titkova
Account Manager
Elena Titkova graduated from Faculty of International Relationship of Belarusian State University with honours in 2016. She started working in an IT company in 2018. At the moment Elena works with key clients. In 2021 she started MBA study.

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