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Outsourcing vs in-house software development: what to choose?

Published on 
June 26, 2020
Danil Vilkhovskiy

Basically, when you need to get software tailored to your needs, you have two options: in-house software development and outsourcing. So, in this post, we will cover all some cases and find out pros and cons of these two options to help you make the right decision.

When in-house development is your ideal option

Here we speak about the cases when in-house development is quite rational and you have all the conditions to successfully complete the task.

You have an established team of developers able to carry out the project within the set deadlines.

First, your developers must be highly proficient in the technology the project requires. For example, your Ruby on Rails developers are really great. So, as long as the project concerns the Ruby language, they build a perfect solution.

Second, you should have free hands to carry out the project whilst hitting project milestones. So, if your developers are half-loaded, they are ready to start a new project and run it till the end.

The project requires enhanced security

As you know, only in-house development ensures impeccable security of the project idea, implemented solutions, etc. So, if this security greatly affects your competitive advantages, do not risk to outsource your project to a third party. Perhaps, this is one of the greatest factors for such companies as Pay Pal and Amazon, who exploit only an in-house model.

You want to keep full control over the project

When you outsource software development to the third party, you are not able to attend all their daily meetings. Nor can you come to their working office whenever you want. In other words, you can’t completely control the project pipeline. Some software development companies may try to use this management defect for their own benefit. To clarify, they may try to draw money out of your pocket pretending they spend more effort and time to code, test, etc.

In contrast, with in-house development, you are able to know exactly who is in charge of the exact task, whether he works hard on your project or just lazily sits on its workplace. In other words, with in-house development, you have full control over the project and each end every developer in your staff.

When outsourced development is your ideal option

Contrary to popular belief, the choice between in-house software development and its outsourcing is not always available. So, there are some cases when outsourcing is the only option, though most often you can still have two paths to go.

This is a one-time project in terms of software development in general.

This reason for outsourcing is common among small and medium companies. At a certain point of time, they come to the need to get a solution that will facilitate their growth. Such companies don’t have developers in their staff. Besides, it would be the wrong idea to start an onboarding campaign and hire software developers on the payroll just to get the needed app. The reasons here are as follows:

  • it will take a lot of time to build a team from scratch
  • you may need software development services for half a year, but what will you do with your developers when the project comes to its end?

So, outsourcing is the only real option here.

Your developers are poor in the required technology or have other priority tasks to handle

First, a lack of niche knowledge and expertise in your development team makes it impossible to bring the project in the house. After all, you do not need software of low performance and scalability, with tons of bugs, or unreadable code. Thus, outsourcing with its huge pool of talents solves all your problems.

Second, a lack of free hands is also a reason to outsource the project as a whole or some of its tasks. So, if your team meets is too busy to handle one more project at the given period of time, you will not get the desired results on time. Moreover, if you still try to develop the targeted software only with your internal facilities, you may end with disruption not only of this new project but with old ones as well. So, outsourcing here is a way to get the job done by handing over the project in full or delegating to the third party some tasks.

You want to save money

Outsourcing is always associated with saving money. And many companies regard this as one of the outsourcing advantages. When you outsource your project, you cut your payroll expenses as well as overheads. You just specify the scope of work and negotiate its price. Generally, you turn to a company with lower hourly rates than you have to pay your employed developers. Thus, you can implement your project whilst spending less money. Perhaps, that is why such giants as Google and Alibaba outsource many of their software development tasks and projects.

To conclude, sometimes your business environment and development facilities leave you no choice but to outsource. However, if you really have the choice, to compare benefits you get and its price not only in monetary terms but the associated risks as well. Only then you can clearly understand whether you need to bring the project in the house or outsource it.