In-house Software Development vs Outsourcing


In-house software development vs outsourcing is one of the most talked-about topics in IT. The main aim of IT companies is to use the business strategies that can make them grow at lower costs. As part of these strategies, some companies hire in-house developers while others outsource the developers. It is difficult to decide in-house software development vs outsourcing, but both have their advantages and disadvantages. If you are also confused about in-house software development vs outsourcing, then you should read this article as it discusses the pros and cons of both. Let us get a deep dive and decide which one should you choose.

Advantages of In-house Software Development
Listed below are a few reasons that will prompt you towards opting for in-house development:

  1. Deep involvementIn-house development allows you to have direct involvement in the development process. You can customize the process as per your needs and make the required changes anytime during the development process. You can explain the requirements effectively and efficiently with direct tete a tete communication, to ensure a clearer understanding.
  2. In-project expertiseThe in-house experts or specialists also get involved in the project so that the bugs can be reduced at later stages of the development. This is all due to the direct support from the company and no communication issues.
  3. No communication gapIn the in-house software development, the development team, support team, and test team work together at the same place with the same working hours. So it makes communication better between them. Also, the defects can be resolved easily and earlier in the development, thus reducing the development cost.
  4. Cultural fitThe developers already working, are aware of the company’s culture. Also, they being the permanent members of the company understand the needs of the company better. This makes them motivated and works best for their company.

Disadvantages of In-house Software Development
In addition to the above-mentioned advantages, in-house software development also has a few disadvantages:

  1. High priceThe in-house development cost is quite high. This is because the company has to take care of many things, such as rent, software, hardware, tax, etc. In addition to these project-related expenses, the company also has to take care of the other spending that includes giving extra training to the employees, employee benefits, employee leaves, etc.
  2. High priceThe dismissal of an employee is a big risk for any company, especially if an employee leaves the company in between the project. The company invests a lot in the growth and development of an employee as a valuable resource to the company, but they can move away anytime. This makes the company make all the investment again on a new employee. It is time-consuming and challenging to hire with the required expertise and to meet the salary expectations.
  3. Lack of expertiseLack of certain expertise is another issue that companies face in the case of in-house development. If the companies need someone with specific expertise which they lack in their company, then they have to hire new candidates. Also, if there is a need to expand the project team, then again the hiring process would have to start.

Advantages of Outsourced Software Development
Check out these plus points of outsourcing the software developers:

  1. Reasonable priceThe cost of outsourcing the software developer is always reasonable. It is because the outsourced developers have more experience in multiple fields. Also, there is no risk of leaving someone in between the project or having to make new hires in between.
  2. Large talent poolIT outsourcing consists of a large pool of technically sound people. Therefore, the company can easily get outsourced developers in a few days. Also, it allows hiring people with different skills from anywhere in the world and get the best developer for your project.
  3. ScalabilityIt is easy to scale up or scale down the project team as per your needs. You can anytime hire more people to expand the team and fasten the development process. Also, you can anytime decrease the specialists in case there is no task to assign to them.
  4. Fast deliveryWith outsourced software development, the time spent on hiring the employees gets reduced. It is easy to speed up the process of development by adding more members to the team. Also, there is no need to spend time training the developers as they are already experts in their fields

Disadvantages of Outsourcing Software Development
Below are the disadvantages of outsourcing software development:

  1. Communication gapThe communication gap is one issue in the case of outsourced developers. The developers may belong to different parts of the world with a different time zone. So, team meetings need to be scheduled as per the comfort of everyone. Also, sometimes, there can be a language barrier.
  2. Mutual understandingThis is another crucial factor concerning the outsourced software developer, the software needs to be developed according to all the specifications. Hence, there must be a mutual understanding between all the developers, and everyone needs to be on the same page.
  3. Security riskSecurity risk is another important factor that needs to be considered. The lack of direct communication may cause a lack of trust. Regular meetings, acknowledgments, and reporting can be used to keep a regular eye on the developer and development process. Also, there is a fear of a leak of groundwork, thus you should always sign a contract beforehand.

To sum up, both stand equal in competition between in-house software development vs outsourcing. You can decide the one as per your preferences, i.e., budget, ease of communication, hire and fire, skills to look for, etc. If the code maintenance is not an issue, then you can go for outsourcing, and if the budget is not a constraint and you have enough skilled developers, then you can go for in-house developers. Outsourcing is getting popular these days as many companies are outsourcing, such as Slack, GitHub, Skype, etc. You can give outsourcing a try, and who knows you might get some long-term players. On the contrary, you can also use a hybrid of two. As part of this, you can use in-house software developers for some roles and outsource developers for others.