Software Development: In-house vs Outsourcing

Having decided to build software or application there is a need to determine how to organize the software development process. So the question arises: what team of software developers to hire — in-house vs outsourcing software development. Whether you’re a startup or an experienced company, you want to build your product fast, keep the quality high, and keep the costs low. Have you found the answer for how to do that? The solution is choosing the right team.

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It’s hard to recommend one approach for all cases, as every software project has its own requirements and factors to consider. We know how tiresome this choice can be, so let’s outline the biggest advantages of both these options. In this article, we – ArrowHiTech would like to introduce to you guys the comparison between the two options of software development: in-house vs outsourcing software development. Let’s get into it!

In-house software development: Pros and cons

Pros of in house software

#1. Direct access to your employees. 

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With an in house software team, you know the abilities of every team member and can assign them tasks accordingly. If you have an issue, you’ll know who caused it and that it will be resolved quickly. Urgent tasks and fixes can always be prioritized by your in-house team, while an outsourced team you once worked with might be engaged in another project at the moment.

#2. Ability to build a company culture. 

If you’re a startup, it’s important to outline a strict workflow and develop corporate ethics, codes, events, etc. from the very beginning. Team spirit is something you’ll never have with an outsourced team. People’s relationships influence how products are created and, consequently, the final result is created by the in-house software development team.

#3. Personal involvement. 

Call it a psychological effect, but it works: an in-house team has a sense of fellowship and engagement in the company’s activities. This cooperation is rewarding not only for you but for your team. They’ll be proud of developing and implementing new technology, causing endorphins to kick in and resulting in job satisfaction. It makes the employees passionate, loyal, and productive.

#4. Expertise in your software development company’s profile

When you are your own client, it’s easier to comply with your requirements. You don’t need to spend hours explaining to contractors what you want to be done and how. An understanding of a company’s philosophy, ethics, position on the market, and even cultural peculiarities are crucial for the best performance. People who possess corporate knowledge will be able to solve issues more easily than an outsourced worker.

Cons of an in-house team

#1. High cost for a in house software development team 

Whether they’re working on a big project or making small changes to support a product’s performance, you have to pay the same salary. Moreover, it’s your task to provide benefits for your employees. On top of this, you have to pay your developers even if they’re on the bench because they don’t have the latest project. Your task is to keep them interested and retain them. So you either have to find generous investors or keep you and your business basic.

#2. Team management and hiring are handled by you

While a service provider takes care of outsourced developers, the in-house approach gets you involved in this tiresome process. Managing your software development team can keep you busy and constantly distract you from your main tasks. Finding the people who will make a long-term commitment to your company and onboarding them might seem like a never-ending process.

#3. Lack of versatility. 

If you’re a software development company, you might want your employees will be experienced in one area only. They might ace one or two programming tools but have a poor command of others. The IT sphere is constantly changing, and you have to offer different products to remain profitable. If you decide to launch a brand-new product with the unknown technology, you’ll have to employ a professional or enroll your employees in courses.

#4. Investment in skills development 

So you have a team. A team of people with diverse knowledge and experience that’s either too little or inapplicable in most cases. What’s your next move? Training. Building a professional, well-qualified team in-house takes a lot of time, money, and effort. If you’re a startup, it will take months, maybe years because you’re doing it from scratch. Also, your development cost would be so enormous.

Outsourcing software development pros and cons

Pros of an outsourcing team

#1. Cost-efficiency

We know this is a controversial advantage and is not always the top priority, but money still matters. All you need to do is choosing a software development developers in your price range, with decent portfolios and references. Another thing to consider is that outsourcing is short-term cooperation, and you pay the vendor only once. Maybe twice if you need a follow-up. On top of that, you don’t have additional expenses like the in-house ones.

#2. No recruitment hassle if you’re hiring an outsourcing software development company

While working with a vendor, this advantage really stands out. You may know how tough it is to build a team from scratch. Not only you have to find people with the perfect skill set but also attract them with a decent salary and working conditions. This isn’t generally a problem for household brands, but it might be a long-lasting challenge for startups. Why bother with all of this if the outsourced vendors can provide tons of services along with risk management?

#3. Get the expertise that you lack

One of the most appealing advantages of outsourcing is access to an almost unlimited talent pool from all over the world. A specialist from any country with any expertise will eagerly start working for you if your offer corresponds with their expectations. Moreover, outsourcing software development is a rich source of fresh ideas and innovation for creative projects. This is additionally important if you develop an international app or website. 

#4. Focus on your urgent tasks

When you’ve found the right people for your project, you’ll have plenty of time on your hands. You can devote it to planning your budget, working on urgent questions, building a marketing strategy, etc. Leave the software development sequence to the outsourcing team.  This will help you manage tasks and avoid failures. Your site will be on the map, with the increased sales and conversions, as a result.

Cons of the outsourced team

#1. You can’t take full control/you can’t directly contact with the software development team

This might be a challenge for newcomers, as you aren’t where things are happening. You can’t see a problem coming or can’t gather a meeting in 20 minutes. You might also have trust issues and think that you could do it better yourself. Transparency isn’t a strength of such an approach. But you can track your team’s progress using modern software and management approaches. Still, you can possibly 100% know what your outsourcing team is doing.

#2. Different time zones. 

This is often seen as a major issue when working with a remote software development team. Time zone differences can create delays, which may be an obstacle when you want to arrange meetings. But look at it this way: if you have a large time gap with your contractors, it means that your company can work 24/7. If your company is based in Vietnam, an outsourced team in Japan is literally in the future and can finish before your deadline.

#3. Security threat

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The security threat when outsourcing

There are certain risks connected to confidentiality and project details. There have been cases of disclosure of companies’ secrets and confidential project data. While there still are software development companies with unreliable employees, nowadays you have fewer chances of stumbling upon them. It’s so easy to check the reputation of a vendor or freelancer. You can certainly find their portfolio, read testimonials of their work, and likely find their blog.

#4. Commitment when choosing outsourcing software development team

Finally, outsourced developers might not share the excitement you have about your project. For you, it might be your first big project and you want it to happen so badly; but for the team, it’s just another task they have to fulfill. Your expectations about their output may not align with reality due to a lack of personal engagement.

The brief comparison between in-house vs outsourcing software development

Having your in-house vs outsourcing software development requires some preparation. As a result, we’ve decided to prepare several useful notes of comparison that can make the process more comfortable and profitable. So now, here we want to differentiate between the in-house team, versus the outsourcing ones.

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in-house vs outsourcing

Final words

That should be it! Throughout the article, we have introduced all the pros and cons of in-house vs outsourcing software development for you to choose for your eCommerce business. In conclusion, it must be said that both of the models have their benefits, but there are also disadvantages. The choice depends on the specifics of the project. So, you should examine your needs, goals, and budget in order to make the right decision.

We – ArrowHiTech is proud to be one of the most well-established outsourcing companies all around the world. That is to say, with over 14 years of experience, we can provide the best software development services for your business. Also, if you want to go through our showcase, you should visit our product page here: MageSolution or our portfolio: ArrowHiTech portfolio.

ArrowHiTech – a software development outsourcing company

If you have any questions, don’t hesitate to CONTACT US. We would love to hear every feedback from you guys.