In-House Software Development vs. Outsourcing: Pros and Cons

After evaluating the needs of your software development project, one of the first decisions to make is whether to develop in-house or outsource to a software development service.

In-house software development involves using the skills of your internal team to create your software. Outsourcing involves working with a third-party provider with specialist skills to develop your project quickly and efficiently.

Both approaches have their benefits and drawbacks and you should carefully consider each one before moving forward with your development. Factors like communication, timescale, expertise and budget should all be considered.

The approach that will work best for your project will depend largely on the specifics. Let’s look at the pros and cons of each approach in more detail.

In-House Software Development vs. Outsourcing: Pros and Cons 2

IN-HOUSE DEVELOPMENT: THE PROS​

Ease of Communication

In-house software developers work together every day. They understand the underlying principles of a project and have an invested interest in its success as employees of the company. Internal teams will already be familiar with workflow processes and procedures for providing feedback. With in-house development, there typically aren’t any language barriers to contend with.

Quality Assurance

With an in-house team, it’s easier to enforce QA standards in all aspects of development. Having your developers under one roof makes it easier to oversee the quality of individual tasks and ensure coding standards are met. Developing in-house also helps you keep track of compliance to ensure that PCI DSS and European accessibility standards are met.

A Good Culture Fit

In-house software developers will already understand the company’s culture and the reasoning behind their processes. There isn’t the same need for staff onboarding as there is with an outsourced service and developers can begin work straight away.

IN-HOUSE DEVELOPMENT: THE CONS

  • Skills Shortages

    One of the principal reasons that companies outsource their software development is a lack of in-house skills. Skills gaps mean steep learning curves and overstretched staff. Before embarking on a software development project, it’s important to evaluate where your team’s expertise lies. Once you know where your team’s strengths and weaknesses are, you can use these insights to determine their impact on your project.

  • Budget and Resources

    Developing software in-house can put a strain on a company’s budget and its resources. If skills gaps need to be filled, employing full-time employees can be expensive and labor-intensive, particularly in today’s competitive marketplace. Annual salaries, employee pensions, benefits packages and ongoing training all come with the territory. According to PayScale, the average software engineer salary is just over $83,000 USD, which shows just how expensive hiring full-time staff can be. Likewise, if an entire team is working on a single project, there’s no capacity to take on new work.

  • Slow Time to Market

    In-house software development can end up taking longer than expected. With staff members at full capacity, developers may need to double-up on projects and work overtime to keep up with demand. According to analytics company QSM, the average development project takes just over 11 months to complete and requires 11,414 hours of effort. In today’s competitive business landscape, companies need to get their products to market quickly or risk losing out to competitors.

OUTSOURCING DEVELOPMENT: THE PROS

Quick Turnaround Times

One of the biggest benefits of outsourcing to software development services is having a project completed on time. Experienced software teams will have workflows in place to ensure that project milestones are met. For example, BairesDev’s workflow is characterized by a Design Thinking mindset and a five-step approach to software development: empathize, define, ideate, prototype, test. This was the approach used when launching an exclusive e-commerce project for Netgear Arlo.

Shared Project Risk

Working with an outsourcing partner can help mitigate the risks associated with your project, such as underestimating timescales and lack of scalability. A good software development service will take the time to study your project specification and identify any potential issues. BairesDev carries out feasibility studies to validate ideas and their associated technologies. By delivering proof of concept, developing prototypes and carrying out regular testing, risks are kept to a minimum.

Access to Worldwide Talent

Statista reports that software application development was the most commonly outsourced function by IT leaders worldwide in 2017. With software development services, your talent pool isn’t restricted by your geographic location. You have access to the very best software developers in the world. BairesDev receives more than 145,000 job applications each year and hires less than 1% of these candidates.

OUTSOURCING DEVELOPMENT: THE CONS

  • Logistical Challenges

    Working with an outsourced team sometimes means negotiating different time zones. Although this doesn’t necessarily slow down the development process it can make organizing meetings difficult. Time zone differences may also mean that companies don’t have immediate access to developers if bugs or errors need to be fixed quickly. That being said, many larger outsourcing companies provide unlimited, 24/7 access.

  • Deferred Control

    When partnering with a full-cycle development company, customers sometimes have less control over the workflow. For the most part, this frees up their time to focus on other business activities, but occasionally it makes it more challenging to ensure quality control. A good software development service will ensure that project management tools are in place for both parties to provide regular updates and feedback.

  • Confidentiality and Security

    Outsourcing software development means trusting your partner with confidential information. It’s important that a Non-Disclosure Agreement is in place, setting out the confidential terms of the project. You’ll also want to ensure that your outsourcing team has robust security processes to combat cyber attacks.

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