Jul 21, 2021
9 minutes read
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.
Outsourcing software development vs in-house was traditionally a great way for organizations to cut costs. Today’s development environment calls for more than just cutting costs as it relates to software though. Organizations need the ability to solve complex development needs and outsourcing provides that over trying to achieve them in-house. Organizations can utilize their own in-house staff for post-implementation maintenance and processes and rely on outsourcing for the skill required for the development.
Outsourcing development is also good for businesses in the startup phase as many don’t have the experienced IT skills required in-house for development. Outsourcing development helps new organizations launch their product much faster than trying to develop in-house.
While outsourcing software development is a great option for many, it does have risks associated with it vs in-house. When choosing an outsourcing development vendor, they’re not going to be familiar with or understand your in-house processes or systems right away. There is a learning curve for outsourcing as well as potential confidentiality issues. Low-cost outsourcing vendors also come with a great amount of risk. Low cost may very well mean low-quality output. This also usually means you won’t have the full outsourcing development support you need for your product either than you would with in-house.
While outsourcing software development has its perks, developing in-house has many benefits. In-house offers increased control and a better understanding of the internal environment. In-house provides better security and risk measures as no one externally is involved like with outsourcing. Software development in-house also allows for better team dynamics through streamlined communication efforts. There is not a 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 are able to fully understand development requirements around business specifications.
Although it can be beneficial, in-house software development has its cons as well compared to outsourcing. The in-house hiring 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 systems and processes in place. Expenses are much higher with an in-house development team as well as having to cover everything from payroll, to benefits, to taxes and hope 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.
If you’re in the market for outsourcing your development needs, we’re here to provide you with some helpful tips. There is some prep work to do on your part in-house before you decide who your software developer will be.
1. Never trust super-low outsourcing hourly rates. You’re essentially asking for low-quality development work and not a lot if any, support for your software after the project completes and outsourcing is over. This leaves room for mistakes, errors, and bugs in your system that you wouldn’t otherwise have in-house. This will end up costing you twice what you would have paid to begin with if end up outsourcing with a cheap development company.
2.Always check outsourcing references. 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. There are also services out there that help you read and understand reviews and pricing of outsourcing development.
3.Do everything you can to protect your in-house data. Confidentiality is key in these outsourcing projects. Sign agreements like NDAs to ensure your data, practices, and processes are protected. Don’t forget to include special 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
Outsourcing software development has become an industry norm in today’s business world. Companies don’t want to deal with attracting and hiring expensive development talent and training teams in-house when they can have an external development company do it for them. 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 to the outsourcing industry to profit by almost $100 billion and growing.
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