a year ago

Inhouse development v/s Outsourcing, which is better?

If I want to develop a product, an app, website, something which is related to technology, is it better to hire developers and build it inhouse or outsource it?
0 0
Inhouse Development


5 main pros for outsourcing software development -

  • Fast approach to high-quality resources
The hiring process takes time. A specialized vendor can provide you with a high-quality software development team much faster.

  • Flexibility 
Outsourcing enables you to hire a professional for a limited time, according to the requirements of your project or specific business operations. Freelancers and specialized vendors are flexible to “jump in” in accordance with your project schedule and needs.
  • Scalability
Every project is specific and needs a team composed according to the specific requirements. By outsourcing, you can scale up the team of professionals specialized exactly for that specific project.
  • Short term commitment
While you need an expert in a field for a specific project, you probably don’t need him or her permanently. Outsourcing IT experts on a project basis enables you to get the best only when you need it the most.
  • Reduced costs
Top level professional that can’t be productive all the time costs a lot of money. Outsourcing can get you a high level of productivity at reduced costs. For example, studies show that with outsourcing the savings on overhead costs can be up to 60%.

5 main cons for outsourcing IT resources-

  • Quality control
It is much easier to control the level of quality produced when you can physically approach and speak to your software engineers than to put the vital phases of your project in the hands of someone you’ve never seen, and then hope for the best.
  • Collaboration
Software development is a collaborative process. Hiring freelancers from a different cultural background can be a huge challenge for mutual understanding of specific requirements. Possible problems appear also from the language barriers, which might hinder a fluent collaboration.
  • Logistical challenges
Working with a developer from a different time zone is challenging for both sides, especially when it comes to picking the time for a conference call or meeting the deadlines which are adapted to one time zone, but not to another.
  • Commitment to the project
Although it sounds great to have a freelancer developer available only when you need him or her, this developer very likely won’t just sit still and wait for your call. He/she will work on other projects as well. Independent software development companies also work with more clients at a time. This might mean that your project won’t receive 100% of their commitment.
  • Security and confidentiality
Companies face security and confidentiality risks even in-house. These risks definitely grow when the sensitive project requirements and details are shared with outsourced resources.
5 main pros for having in-house software development-

  • Long-term product development
If you’re developing a product or a solution which will require a long-term commitment, then it’s better to build the team of developers in-house. They can be fully committed to this product, know it inside out, and easily and quickly make changes or fixes when needed.
  • Aligned interests
If a company is thriving, all employees have aligned interests and share the same vision. It means that they will give their best to meet the company’s goals. Such a commitment is hardly possible with freelancers who are not fully involved in your business.

  • Company‘s culture fit
It’s important to collaborate with people who fit your company’s culture. Having in-house developers who are nothing more than capable to do the job, but who get along with you and your team is usually more productive than trying to work with the best specialists who are a poor culture fit.
  • Shorter turnaround time 
Developing a product in-house enables you to monitor all the steps in the process. If something goes wrong, you can spot it immediately. Turnaround time in fixing the problem is shorter than it would be in the case of outsourcing.
  • Alignment with the company‘s standards
Control over the company’s coding standards is crucial for the future life of the product. With the in-house software development you can decide what’s best for the future maintenance processes of the product.
5 main cons for hiring in-house developers-

  • Time-consuming process
It takes time to find the right developers and negotiate with them to join your team. And even then there is a possibility that they won’t be able to join right away. If the clock for your project is ticking, you need the right persons now, which you can get with an outsourced freelancer or specialized vendor.
  • Technical expertise
Unless your company has a large IT department or an unlimited budget to hire a wide range of IT professionals, most probably you won’t be able to cover all your specific needs with dedicated experts.
  • Limited funds to hire a talent
Hiring a talent costs a lot of money. Do you really need an expert in a certain field on a full-time basis? Will he or she pay out in the future, after your project is finished?
  • Side costs
Annual salaries, benefit packages, overhead costs – it all comes with a full-time in-house team.
  • Overload of in-house IT resources
If the project for which you need developers is not the core business of the company, such a project could be a huge burden on your IT resources. And an overload usually results in unsatisfied employees and non-optimal product.
People are facing problems such as they have difficulties in making a quick decision about hire inhouse developer or go for outsourcing software development. This decision is taken on a case-to-case basis...
There are distinct advantages to each one. Outsourcing allows you to continue with other plans while waiting on your project to be finished. when you outsource you also have the advantage of not having to hire multiple people to complete a job that needs done once.
If you go in house you can control the process however you have to pay for all the o,t, and any unexpected issues, while in development your project may or may not need more than one person to complete. If needing more thaan one person ends up being the case then the expense or overhead of your project rises.
Did you know that Skype, Github, MYSQL and Slack were built with outsourced development??
turn to specialists, create a smart contract where specify the penalties for failure to fulfill your plan
Prices Out Then Sourcing In

Every business decision ultimately boils down to the Talent & Money part...
if you already have the talent in-house then why would you look somewhere else.. unless the opportunity loss of using your own people is greater than if you hire someone else to do the job..

Else even if you have the talent then time restraint may push you towards outsourcing..

In either case be it inhouse or outsource it would make sense only if the quality and costs involved are accretive in nature!!! However, it's not as simple as it sounds sometimes...!!!

Depends on the expertise level in the organization
If internally available go ahead if not outsource
All depends on cost of outsource vs insource
Overall -

Difference -

Small business who would otherwise be swamped with costs can compete toe to toe with larger companies. Outsourcing allows them to have availability to of the same resources presented to larger companies.
Whoever can do a better job should get the job.