Pros & Cons of In-house Vs Outsourced Software Development

The article "Pros & Cons of In-house Vs Outsourced Software Development" will give you a detailed overview of In-house and Outsourced Software Development.

If you're reading this blog post, you're probably in pursuit to build software for your business. And you probably have to choose between in-house vs outsourced software development. Throughout this blog, we will explore the important pros & cons of in-house vs outsourced software development and identify the most effective method for successful business growth.

In-house Vs Outsourced Software Development

You must have a clear understanding of in-house and software-sourcing before you go for software development. There are many good software development companies in India for outsourcing, but in some cases, in-house software development is a good option.

In-house Software Development

In this model of software development, you build a team from your own employees and assign them to your software development project. Key players in the IT industry such as Salesforce, Amazon, EY, PayPal etc are some of the examples of companies that follow in-house software development.

Pros of an In-house Software Development

Understands Your Company Culture: Your in-house team will have more knowledge about your company and culture.
More Agility in Communication: In-house software development allows face-to-face communication between developers. This makes the communication process much more agile and clear. This will also help your management to assess the capabilities of every team member.
More Adaptive to Project Changes: Your In-house team of software developers can quickly adapt to sudden changes in the project.

In-house software development may seem like an easy option. But, this model of software development is not as easy as it seems. Below we will discuss the cons of in-house software development.

Cons of an In-house Team

High Cost: It will cost you a fortune when you hire an onsite team since you have to pay them every month, regardless of the progress of your project. You need to pay to the developers even if they are doing some minor bug fixing for a few hours. Having an in-house software development team means more infrastructure, you need to meet additional expenses like taxes, rent, hardware, software, and more.
Staff Turnover and Hiring: Staff turnover is the biggest drawback that businesses can potentially face with an in-house software development team.
Hiring the right people for your software development project is a daunting and time-consuming process. When we analyze the job hiring data from various companies, it's clear to us that it will take at least one month to hire a coder. An outsourced IT vendor can build an API for your app within this time.
On the other hand, the actual cost of hiring a software developer internally significantly exceeds his base salary. This also includes indirect costs such as paid vacations, employment taxes, and training.

When should you think about in-house software development?

  • You should think about hiring on-site developers only if you want access to every stage of software development.

  • If you are a mid-sized business, this model of software development won't be the right fit for you.

Outsourced Software Development

These days, outsourced software development is trending among most of the businesses. They mainly outsource their software development to an external vendor to lower the cost of their product development. This is the main reason why entrepreneurs depend on outsourced software development. By software outsourcing, we mean a specialized vendor that offers a dedicated team of developers working closely with an in-house team. Multibillion enterprises such as Google, Skype, Alibaba, etc outsource small parts of their work to external vendors.

software development company

Pros of an Outsourced Software Development

Wide Tech Expertise: Software outsourcing companies have more expertise in different fields of technology. There won't be any need to hire new specialists to your in-house IT team if there is a sudden update or change in technology for your project. Their broad industry knowledge and experience let them predict and mitigate potential risks very effectively. You can also get access to the best of talented developers without any geographical boundaries.
Cost-Effective: This advantage really stands out when you outsource your software development project. After all, the main intention of businesses is to make good revenue. They can accelerate their revenue by outsourcing their software development projects to an external vendor. By doing so, they can cut costs, find competent staff, and save time.
You must be very careful with vendors that offer low hourly rates. The developers they offer will be quite cheap but the quality of their services won't be that much great. The quality of your software can get compromised when you choose such kind of vendors for your software development project. For example, software outsourcing companies in India are more reliable when it comes to high-quality software development.
Reduced Legal Hassle: Outsourcing can reduce several risk factors that are associated with government regulations.
Reduced Recruitment Efforts: With software outsourcing, you can easily reduce your recruitment efforts.

Cons of an Outsourced Software Development

Lack of Direct Control with the Team: This might be a challenge for most of the businesses that outsource their software development projects. With the advent of improved communication tools, software outsourcing vendors can contain this challenge efficiently.

From the above sections, it is clear to us that the pros of software outsourcing outweigh its cons. If you're looking at things in the long-term perspective, software outsourcing will be good for your business. Whereas, you will need an in-house development team if the software that you are building is going to be your core business.

Outsourcing your software development project should be considered as a strategy for reducing costs and workload. But, on the flip side, there is a lack of clarity in telling a sure way to choose between in-house vs outsourced software development. All of that depends upon your project requirements and intention.


Author: Umesh18 Sep 2019 Member Level: Platinum   Points : 5

An excellent article helping us to decide whether to go for in-house expertise in software or go for outside software. This is a very interesting comparison and one thing which I can mention is that if software is not our core area and is not our business then why we should waste time and energy for developing it in-house. Many organisations do this mistake and feel that with a handful of software/ computer persons available with them they can do anything. We should only focus on our core area and core business and concentrate on the strategies required for it. Today very good and robust software is available on the shelf and you have to simply specify your needs and experts will prepare a required code for you. So just pay for it and use it to increase the productivity of your workplace which is the main purpose of installing advanced software and systems.

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