In-House Development Vs Outsourced Development: The Pros And Cons Of Each

In-House Development Vs Outsourcing – How To Decide?

What’s better, in-house development vs outsourcing? 

Comparing these two approaches may have started in 1989 when Kodak first gave its software project to 3rd party developers. Up to now, there may not be an obvious answer. At an abstract level, both strategies may get your development project completed. However, there are pros and cons to both options. Outsourcing projects can be very beneficial in certain circumstances, while in-house software development can be beneficial in others. 

In this article, we will look at the pros and cons of in-house development vs outsourcing so that you can make an informed decision about which option is suitable for your project.

Pros Of In-House Development

In-house software development is a considerable investment. It requires more resources than outsourcing. However, it offers many advantages to the organization and its clients.

Here are some of the benefits that you can get from an in-house software development team:

Good Culture Fit

In-house developers are already familiar with the culture of the organization. They understand how the business operates and can read the company’s pulse and what it needs from its software from day one. 

Ease of Communication

Because in-house talents work for the same organization and typically find themselves in the same physical environment, they can easily communicate face-to-face. When they meet, they can explain their work in detail and answer any questions that may arise during their work. This ensures that there is no confusion about what needs to be done or how it should be done.

Ability to Make Quick Changes

Software and web development is not a straightforward process, there are usually corrections, modifications, and updates before the final product is rolled out. When there is a need to make changes in code, in-house talents can do so quickly because they are familiar with the technology and don’t have to wait for others to do so.

Cons Of In-House Development

In-house talent may look good at first, but it also has disadvantages. Here are the cons of using in-house talent:

It Is Expensive

The cost of hiring an in-house team is relatively high. The cost of hiring IT techs can range from $29.90 per hour or $74,001 per year, depending on the skill set required by the project. This does not include the cost of employee benefits, like health packages, vacations, and insurance. Plus, you will likely spend a lot of time and money during recruitment and onboarding.

High Rate Of Employee Turnover

Another problem with using in-house talent is that there is a high rate of employee turnover. At 13.2%, IT employee turnover is higher than in any other sector. IT experts tend to leave and set up their teams quickly. You’ll always have to constantly look for people to fill this gap.

Upskilling Is Your Responsibility

When you hire an in-house team, you have to ensure that they are upskilled to meet your company’s standards. You will have to pay for training programs; if your company is large, you might need to hire consultants or external vendors to train them. This can be costly and time-consuming.

There Can Be A Shortage Of Talents

In some cases, and depending on the project, qualified talent can be challenging to find in your location. A McKinsey Global Survey revealed that 9 out of 10 business executives face a skills shortage in their organization. The time it will take to source the people you need could cause delays and cost overruns for your project.

When To Use In-House Development

When comparing in-house development vs outsourcing, in-house can be expensive. However, if cost is not a deal breaker, what other factors should you consider before opting for in-house development?

You can develop your software in-house if you have your infrastructure, a solid team of developers, and no budget constraints. Businesses can control the entire process from start to finish using an in-house team. This means the web application development process is under your control, including how it’s designed and built.

Developing in-house is also ideal if your core operations revolve around software development, you are constantly developing something, and there is steady work for your team.

Pros Of Outsourced Development

Outsourcing your project can significantly reduce costs, increase efficiency, and free up time for your employees. More benefits of IT outsourcing include:

Cost-Effective

You can get a more cost-effective team when you outsource your project than hiring individual developers in-house. With an outsourced team, you can hire talented developers at a lower price and retain their services for future projects.

Access To a Large Pool Of Talents

Another advantage when looking at outsourcing vs in-house development is that outsourced developers have access to a larger talent pool than internal teams. When you leverage offshore software development, finding the right person for each position is much easier than using a team from within your company.

Faster Turnaround Times

Outsourcing allows companies to quickly move from one production stage to another without much delay compared to in-house teams who need time for training and onboarding new employees.

No Technology Restrictions

In a world of rapidly changing technologies, it can be hard to keep up with all the innovations in the market. But by outsourcing development, you don’t have to do so. You work with tech experts with extensive experience in dealing with a wide range of technologies and know what works best for each project.

Are You Looking For A Software Development Partner? Read Article To Know Mistakes Companies Make When Hiring Software Development Partner

Cons Of Outsourced Development

There are advantages to outsourcing development, but there are also cons. The cons listed below are just some of the most common ones.

Trust Issues

When comparing in-house vs outsourcing software development is that with outsourcing, you’re trusting someone else to do the job right. The only way to be sure is to work with a reliable partner. Look for a company known for transparency and communication, like Broscorp, and be sure to have an ironclad contract before getting started.

Communication Issues

Another big issue with outsourcing is communication. But in the era of Covid-19, most employees are working remotely. Even if they work in-house. Communication could also be affected by time zones, language and cultural differences.

Quality Control Issues

It is certainly advantageous to outsource, but only if you get the quality of work you expect. Therefore, be sure to select your team carefully. Be involved in the hiring process of the engineers and demand that they prove their skills. This way, you can select only the best candidates that meet your requirements.

When To Use Outsourced Development?

Having seen the pros and cons of in-house development, it is easy to tell that outsourcing is a great way to reduce costs, increase efficiency and improve productivity. You should use outsourced if you have a limited budget and want to develop your product as quickly as possible. 

Outsourcing your project is also a good idea when you cannot be fully involved in the development process when you need teams that have experience working on similar projects, and when you cannot guarantee steady work for your in-house talents. 

Most importantly, outsourcing allows you to focus on the most essential parts of your business while delegating the rest to professionals.

Learn more about Why your next software development company should be from Ukraine?

In-House And Outsourced: How To Get The Best Of Both

While in-house software development advantages are noteworthy, there is no doubt that outsourcing software development is a growing trend. With the massive demand for IT solutions, it has become necessary to outsource some of the work, a style that is expected to increase by as much as 70% by 2023. But that doesn’t mean you should not use your in-house talents.

The best way to get the best of both worlds is to have a small in-house development team work on some of the most critical tasks while outsourcing others to a third party.

This way, you retain control of your project, cut down on costs, and still enjoy access to talents from other parts of the world.

Summary

The choice between in-house and outsourced is a difficult one, but hopefully, the outsourcing software development pros and cons, as well as the advantages of in-house system development in this article, will help make your choice a bit easier. 

Ultimately, what makes the best option may depend on your specific needs, but if you are leaning towards outsourcing or combining both methods, the key to success is working with the right partner.

If you want to convert your ideas into a profitable solution, Broscorp is your ideal partner. Get in touch today to find out how our custom software development works.