Should You Outsource Your Software Development or Develop In-house?
Posted on 30th Apr 2021
So you decided to build a software or an app and you are faced with a question: Should you outsource your software or develop it in-house?
This can be a very tough decision to make, but we will try to help you choose which one is best for you in this post.
Since the price is something that can change everything, let’s start with costs:
Different costs
Having in-house developers is extremely expensive.
Just consider all these costs: salaries, office, training, hiring an IT recruiter, monthly health and dental insurances, holidays, employment taxes…
Not only that, but you also have to provide computer equipment for programming, development and design tools!
On the other hand, when you outsource software development, you don’t have to pay for all these things and you don’t even have to pay for the tools. The only thing you need to pay for is Results!
It doesn’t mean that outsourcing is equal to lower costs.
The worst-case scenario is when you choose the wrong partner, pay, and get nothing but a headache. But fortunately, this can be solved by choosing the right partner.
In that case, outsourcing usually turns out to be more cost-efficient.
Communication Matters
As the saying goes: Communication is the key to success.
In-house Team
Being in one office and having the same working hours allows making communication much more comfortable and clear.
When you have a team of in-house developers, you can reach out to them whenever you want and they can do the same. Also, you can share the information and instructions very quickly and get instant response.
When a problem arises, such as a bug in the code, it’s a lot easier to explain it to your in-house team and you can start working on it right away.
It is important to mention that it depends on how much the thing you want to develop is related to other components of the business.
If you are developing an upgrade to a legacy system, it’s hard for an outside collaborator to catch the threads quickly. In-house is often the right choice here.
But if you need a stand-alone project made according to best practices, it is generally better to take a partner who specializes in just that.
When you have a whole team in one place, communication seems easier. Right?
But this form of communication is more prone to off-topic chatting. Sometimes it may be a distraction and lower people’s focus, making them less productive.
Face-to-face is seemingly better, but most often it’s simply inertia and unpreparedness for the modern age than a real need.
Last year showed that.
Outsourced Team
Time zones can be an issue for communication, but scheduling a meeting beforehand and setting clear expectations can easily solve it.
While working with an outsourced team you communicate online, and one of the advantages of online communication is that your team can actually be more efficient.
Level of Quality Control
When it comes to quality, people think it’s easier to control the level of quality when you can speak face to face with your software developers.
On the other side, outsourcing gives you a big opportunity to hire the best developers for your job. To be honest, this is an illusion.
It may be worth mentioning that it’s difficult for a non-technical person to evaluate the results of even their own team. A good agency should have well-defined processes and quality control, while in-house it is often ad hoc.
Before you decide to work with an IT company, take a look at their portfolio. It’ll give you an idea if they’re a good fit and if they can produce the quality you are looking for.
Information Confidentiality
When hiring, a lot of companies sign contracts and agreements with their employees to stop them from giving some sensitive information away.
This also can be done when starting to operate with an outsourcing company.
If you are afraid that your idea or project will be stolen, consider signing an NDA. It guarantees the protection of your intellectual property and project ideas.
In-house or outsource, the risk is similar, and you need to protect yourself in both cases.
Level of Commitment
Software developers who are members of your in-house team are much more engaged and they treat your project as theirs.
They know the product inside and out, and all their efforts are directed towards your project.
“With an in-house team, you’ll have a nice group of people all sharing the same values and culture.”
This is what I’ve read somewhere. Is this really true? Does it relate to each in-house team?
Not really. Look, it’s reasonable to worry that you might not get that in a remote team.
But you know what? If you find a good outsourcing company, they will also treat your project as theirs. If they don’t, find another company.
It’s that easy.
Some outsourcing companies act as one-time vendors, and their commitment to you and your company lasts only as long as the software development process does.
This is why you need to set up things straight from the beginning and be open about possible future projects and collaboration.
Considering Long-Term Plans
Something you must consider before choosing an in-house team or outsourced team is your-long term plans.
What is your long-term plan?
Will this software be the core of your business?
If yes, then you may benefit from hiring an in-house team.
If software development isn’t the core of your business, then hiring an in-house team would become an unnecessary strain because it’s time-consuming and it could distract you from more important things.
Are you planning on a long-term development project?
If you do, then it makes sense to build an in-house team. But you can also team up with an outsourced team for a long-term collaboration.
The third option is hybrid models.
You can hire an outside team, have them build the project, and later educate the internal team and hand off the project.
Will you have a consistent task long-term for your team?
Keep in mind that full-time developers get paid full-time even when your company doesn’t have software development-related tasks.
Both Can Work if Done Right
Both have their pros and cons and both can work if done right.
In-house teams can create an amazing company culture. True. But if they do, it means that team members are committed to giving their best to meet company goals. You have full control over the project from start to end.
Seems ideal again, right? Let’s make it more realistic. Great company culture comes with a price. In-house teams are very expensive and often very time-consuming to manage.
After all, you need to choose the right people, then you need to onboard them, develop their skills, pay them, pay someone to manage them, etc. This takes time.
Let’s simplify it. If software development is not your core business, it is very difficult to hire the right people.
You need to have the knowledge and the right processes in place.
By: etrellium