In-house vs outsourcing software development has always been a big question for businesses. There are many pros and cons to each. Whether your business has stood the test of time and you’re looking for upgraded software development, or your organization is new on its journey, and you need a solution, we’re going to break down the benefits and differences of in-house vs outsourcing your software development.
Software outsourcing occurs when companies let a third party develop their custom software. Outsourcing software development has many well-known advantages, such as cost optimization, better efficiency, lower risks, and improved safety.
Today, companies actively use access to the world's top software developers to work and succeed in the primarily digitized business landscape. Not only startups but established companies work with outsourced software developers to stay current. For many years, outsourcing software development has become a standard. In this article, you will learn more about the benefits of outsourcing software development for companies.
In today's world, companies that provide software development outsourcing services can contribute significantly to business growth and are valuable business partners. Technological changes allow the software development industry to adapt quickly to new reality. New methodologies are constantly introduced, new programming languages become more relevant, old standards of many industries are no longer relevant, and some more innovative practices become a standard. It is one of the reasons why businesses accept the importance of software development outsourcing as a global strategy. Small and medium-sized enterprises without in-house development teams can use cloud computing, blockchain, the Internet of Things, and other specialized development areas. It is no longer a challenge for them.
Software development outsourcing has become a global strategy, even for large enterprises. Even Google uses outsourcing development services for automation engineering.
As the fast-growing outsourcing software development company, VITech provides high-quality outsourcing services that drive the software development industry forward. We offer businesses from different areas possibilities for digital acceleration in the long term and allow their in-house teams to fill in the skill gaps.
In-house vs. outsourcing software development has always been a big question for businesses. There are many pros and cons to each. Whether your company has stood the test of time and you're looking for upgraded software development or your organization is new on its journey and needs software, we will discuss the benefits and differences of in-house vs. outsourcing your software development.
Outsourcing software development has certain benefits, including the following:
At VITech, we work with the most talented software engineers, offering our clients top-notch tech expertise.
Businesses that work with outsourcing software development companies can benefit from filling in the skill gaps of in-house tech professionals.
You need an experienced tech partner to save time and make software development more effective. Of course, compromising on quality is not an issue in this case. At VITech, you'll find the expertise that helps accelerate the time to market for the product you develop.
Outsourcing software development to a trusted third party is the best and most proven way to increase cost efficiency. In this case, you only pay for the expertise you need, easing pressure on internal staff.
Outsourcing a software project allows you to invest resources and time into running capacity issues and focus on the main business functions. It also allows internal staff to save time and focus on running daily business tasks.
An experienced team you outsource your software development process allows you to lower risks and make the results more predictable. The eventual errors and liabilities can be foreseen, identified and resolved thanks to robust SDLC and QA processes.
Each experienced outsourced software development team has robust workflow practices that help you establish proper monitoring of work progress and meet requirements, goals, milestones, and deadlines for completing the project.
As an experienced software development company, VITech considers feasibility analysis an essential part of our working practices, which allows us to provide solid validation of technological and budget issues. Our outsourced software development services include creating prototypes, proofing the concept, and implementing solid QA practices. All this allows us to mitigate the potential risks on the project at the early stage of the product development cycle.
Outsourcing software development vs in-house was traditionally a great way for organizations to cut costs, but today's development environment calls for more than just cutting software costs. Organizations need the ability to solve complex development needs; outsourcing provides that by achieving them in-house. Organizations can utilize their in-house staff for post-implementation maintenance and processes and rely on outsourcing for the skills required for the development.
Outsourcing development is also suitable for businesses in the startup phase, as many don't have the experienced IT skills required for development in-house. It helps new organizations launch their products much faster than trying to develop them in-house.
Pros of outsourcing:
The most important thing about outsourcing software engineering is understanding the process's complexity and unavoidable challenges on the way. This knowledge can help you avoid some common mistakes and underestimate the difficulties. You have to stay tuned and prepared and not be afraid of challenges.
An experienced software engineering company can guide you through the development process, and you have much more chances for success. Even if the working process might differ depending on the company or specific industries, some common steps determine all the work processes.
Software engineering is one of the most essential activities in today's world. It focuses on developing all kinds of software. To produce scalable, high-performing, secure software, you must follow certain principles, methodologies, and best practices.
It may seem that software development and engineering are the same, but this impression is wrong. Software engineering focuses on the engineering part, not on the development. As the basis for designing and creating applications, software engineering uses scientific knowledge, putting certain practices at the very foundation.
The first thing you need to start a project is to clarify the requirements, goals and scope. At this stage, you have to define what you want to receive at the end, the overall timeline, estimates on the budget, and the specific goals. All this has to be done before you decide to outsource the project. Without a complete understanding of the goals and the whole scope of your project, you can not determine what type of outsourcing engagement you'll need.
After clarifying all the details of the future project, you can begin looking for suitable outsourcing software development companies. It would help if you chose appropriate development companies with the industry experience and expertise needed to deliver your project successfully. You must compare outsourcing companies' services, their working models and evaluate their experience, reputation, quality, and SDLC principles.
Once you have chosen the outsourcing company that suits your requirements, you can start working on the project. The first step is meeting with the outsourcing team, discussing the goals, and defining the working roadmap. Don't forget to consider your involvement in the process to know exactly how to proceed.
The outsourcing software engineering team can start working on the process after you have developed the strategic plan. There are different engagement models you can work with:
You can choose between the above options or mix them according to your needs. Another possibility is to work with staff augmentation, which allows you to fill in the skill gaps of your in-house team. You can outsource only certain parts of the project unsuitable for your in-house team's expertise or the entire project, it allows you to focus on the most pressing activities besides the software development work.
After you provide the deliverables according to the setup timeline and agree on the road map, the outsourcing team can follow the instructions. Even if the project will have changes and adjustments based on your feedback, they can be considered during the work. Depending on the project's specifics, the outsourcing software development team may go on to provide updates, maintenance, and further development work. The goal is to have the software ready; changes and challenges are part of the process.
Clients can usually choose between several main models of outsourced software development. Each model has advantages and disadvantages. The decision depends on your budget, timescale, competencies, level of personal involvement, and project complexity.
The staff augmentation model allows your in-house team to work with an outsourced software development team, filling in the skill gaps. Augmented teams usually have regular contact with the in-house development team; they may also work on the project remotely.
The dedicated team model is another possibility to work with an outsourced software development team. In this case, the outsourced team is more responsible for completing the project. The outsourced delivery team can allocate specific tasks, monitor workflow, and provide management structure. This model allows you full access to highly skilled developers' expertise.
The project-based model means that the outsourcing software development company manages the entire software development process, from defining the goals to allocating workflow, setting timelines, and quality assurance.
If you're in the market for outsourcing your development needs, we're here to provide some helpful tips. Before you decide who your software developer will be, you need to do some prep work in-house.
You have to follow the following essential steps to ensure the seamless flow of your project:
Before you hire the outsourcing software development team, you need to know what kind of expertise you require. Check the knowledge and expertise in your in-house team to define skill gaps. Knowing what skills you need, you can start working on a project specification that explains the product's goals and the work process's steps. Then, you can look through the list of outsourcing companies and choose the most suitable outsourcing development team.
At VITech, we consider the workflow and project specification in detail. Our approach ensures that every project is delivered on time and is characterized by our unique design-thinking mindset. We successfully fulfil all the steps of proper software development: ideate, empathize, define, create a prototype, and test. This approach and technical expertise enable us to execute projects quickly without compromising quality.
The first step in looking for a suitable software development company is evaluating each candidate's reputation in the marketplace. Before hiring a software development company, look at the case studies on the company website. After that, check third-party reviews and the social media channels of the outsourcing software development company you hire. Knowing about the company's position in the software market is essential. Try to contact their former clients and ask for feedback about the cooperation.
Project management tools are, in the first place, things that need to be implemented to chart progress after you've chosen your software outsourcing team. Use platforms like Jira, Basecamp, or Trello to assign tasks to specific software developers and monitor the status. All those platforms enable effective communication between the developers and clients through messaging, online meetings and calendars. To ensure the achievement of milestones and meeting responsibilities, your outsourcing software development company must allocate a project manager and team lead to a project. You can see efficient progress on the project and plan the timely launch only if communication channels work correctly. Communication is the key to successfully outsourcing software development. Finding a software outsourcing company you want to work with in the long term can take time. Don't hesitate to invest time in it.
You're essentially asking for low-quality development work and not a lot of support for your software after the project is completed and outsourcing is over. This leaves room for mistakes, errors, and bugs in your system that you wouldn't otherwise have in-house. If you outsource with a cheap development company, this will cost twice your pay.
Is the company reputable? What is their outsourcing history like working on these types of projects? Do you have any peer companies you can consult with to understand the quality of development work you will receive in-house from the outsourcing company? Reliable development companies will have a portfolio of work to share with you for a proven track record. Some services help you read and understand reviews and pricing of outsourcing development.
Confidentiality is key in these outsourcing projects. Sign agreements like NDAs to protect your data, practices, and processes. Don't forget to include particular clauses on how the data is transferred between your company and the outsourcing software development company.
Related: How to hire the development team for your startup
Follow these steps to protect your business:
At VITech, we work with highly skilled and talented software engineering professionals. We are keen on providing software development projects to companies, from minor to significant global corporations to startups. We are powered by an Agile mentality and technology and driven by talent.
Outsourcing software development has several associated risks compared to working with an in-house team. Of course, despite the dangers, it is an excellent option for many.
First, an outsourcing software development company can not be familiar with or understand your in-house processes or systems in the same way as the in-house team. This can cause problems, including more time spent investigating the working processes. You have also considered potential confidentiality issues that might be problematic with an outsourced development team. Another issue you must consider is the technical support of the delivered product and the ability of the in-house team to do it.
Sometimes, cutting costs by outsourcing results in a low-quality product. That is why you have to choose your development partner very carefully.
To sum up the most common disadvantages of outsourcing development:
In this chapter, you can read about the most common outsourcing myths:
Main pros of in-house software development
While outsourcing software development has its perks, developing in-house has many benefits as well. The in-house team offers increased control, a better understanding of the internal environment, and better security and risk measures as no one externally is involved, like outsourcing. Software development in-house also allows for better team dynamics through streamlined communication efforts. There is no need to get up to speed on common internal language, systems, and processes in-house, as would be the case with outsourcing. In-house teams can fully understand development requirements around business specifications.
Pros of in-house software development:
Although it can be beneficial, in-house software development also has cons compared to outsourcing. The process alone to hire someone with a software development background can take months and prove to be quite costly as their skills are in high demand. Once they're in-house, they'll have to learn the systems and processes. Expenses are much higher with an in-house development team because of having to cover everything from payroll and other benefits to taxes while hoping for no turnover during the project. If you don't have the budget to hire a developer in-house, you run the risk of your team having limited to no expertise or experience with the project, which could, in turn, lead to longer launch times and expensive fixes than with outsourcing.
Summarising the cons of in-house software development:
Each year, software development websites publish thoughts about the most expected trends of the future. In a field as dynamic as software development outsourcing or software engineering, trends change rapidly, sometimes even in a few weeks. It makes it almost impossible to foresee the most dominant trends even for a short period, not for the whole year. Here, you can see the areas of software outsourcing that are changing constantly:
Outsourcing software development has become an industry norm in today's business world. Companies want to avoid attracting and hiring expensive development talent and in-house training teams when they can have an external development company do it. Businesses have figured out how to cut back and reduce expenses in-house by at least 50% when outsourcing so they can focus on their core business product and goals in-house. This has led the outsourcing industry to profit by almost $100 billion and growing.
Here are the latest trends in outsourcing:
Cloud-based services
Operating in a cloud-based development is a must. The market continues to expand, with more and more companies understanding how important it is to work with cloud technologies. Cloud technology is here to stay for all of your data storage needs. It offers high security, maximum flexibility, and room to scale.
Artificial intelligence
Artificial intelligence, machine learning, and data science are critical developments that will shape the healthcare industry in the future. Artificial intelligence with human-like information processing and decision-making opens up a world of possibilities. Diagnosis precision, speed, and efficiency may all be improved using this technology. Early treatment is possible because of AI-driven analytics, which can assist healthcare practitioners in determining the best strategy for a specific patient.
Increased security needs
Companies have become more targeted by cybercrimes than ever. It's become evident that they need enhanced cybersecurity development to keep up with protecting customers' data. This involves investing more in development areas like GDPR (General Data Protection Regulation). Outsourcing software development to enhance security is on the rise.
Robotics
Robotic process automation offers enhanced coordination, expense reduction, and less room for mistakes or manual errors. Business automation has become a more critical development than ever in our digital era. Companies are outsourcing their development needs for robotic process automation. RBA offers payment processing and an enhanced customer experience.
Before outsourcing some IT services, you must consider it a fully customizable process because of the project's scalability and complexity. The kind of technology a company aims for does not matter; each project has unique requirements that depend on specific business areas. Naturally, requirements will change in the process, and some new ones will be added. According to this, the goals and objectives will change as well.
At VITech, we achieve high flexibility according to client needs by offering dedicated teams for each project to develop, implement, and support our clients. This allows us to deliver high-quality custom software effectively and consistently.
The IT services that can be outsourced for each project depend on particular clients' needs and requirements.
We have experienced that the most often needed outsourced IT services are the following:
Custom software applications VITech develops are very different. We can customize a running platform, develop applications for some small projects, or create complex software according to the requirements of large companies. All businesses outsource custom software development to achieve solid technological support.
Quality assurance can be utilized as a standalone service or an integrated part of the development process. This depends on the business goals that the application has to achieve. Outsourced QA services help your product fulfil the highest standards of quality. A solid testing approach can add significant value to the software development life cycle.
You must work with cloud-based technologies to provide seamless integration between different business operations. Companies can accelerate their digital transformation by outsourcing cloud computing services. This helps to cut costs, improve business agility, and mitigate risks.
Web & Mobile Software Development Services VITech offers results in successfully delivered projects like websites that allow a solid online presence essential for interactivity and a great asset to increased productivity and optimized business processes.
VITech works with the best software developers and support engineers to stay current with the latest policies, technologies, and practices and offer clients access. Our expertise allows us to manage IT processes structurally, accurately, and flexibly.
Blockchain technology helps companies achieve the highest possible efficiency and create new business opportunities while guaranteeing information validity through an immutable register system.
Data, with advantages and disadvantages, is essential today in each kind of business. The ideal way is to use only the pros, avoiding the cons of it. Data-driven technologies define the future of each company.
The Internet of Things is becoming more popular every day. Businesses that take advantage of it can run their daily operations more efficiently and increase their business value by deeply understanding their customers' buying patterns. Telemetrics, smart devices, traffic analysis, sensor networks, and constant industrial monitoring are already part of the daily IoT-based routine.
UI/UX design is essential for a newly developed application and creating a compelling user experience strategy. Customers should have the best possible experiences across all contact points. UI/UX design helps the application gain competitive advantages that reduce customer churn, escalate conversion, and promote advocacy and loyalty.
A Minimum Viable Product (MVP) means developing a future product prototype with the minimum features needed to clarify requirements at the early development stage. Working with VITech, you will have access to top software developers, who will create the MVP for you to define all the project details for the future.
We pride ourselves on our hands-on outsourcing approach, which seamlessly integrates with your team and delivers top-quality development results. VITech stays ahead of technology development trends, so you don't have to. This involves regular on-the-job training, conferences, and workshops to keep current with our skills.
Here's what you get with VITech:
Tell us about your project and we’ll be glad to help.
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