Outsourcing VS In-House Software Development – Which One is Better?

In-House VS Outsourcing Software Development – Which One is Better?

Software development is a technical job that demands both expertise and specialization. Companies that develop software applications choose two ways to go about it: outsourcing and in-house software development. Both have a unique set of pros and cons.

With that said, which one makes for a better choice for app development companies? The comparison of outsourcing vs in-house software development below will shed some light on it.


Outsourcing VS In-House Software Development: Merits and Demerits

Advantages of in-house software development

Disadvantages of in-house software development

Advantages of outsourcing software development

Disadvantages of outsourcing software development

Outsourcing VS In-House Software Development: Which Is the Better Choice for Your Company?

Outsourcing vs In-House Software Development: Merits and Demerits

For a mobile or web app development company, it can be tricky to decide whether to have an in-house team of professionals or hire a software outsourcing company. Weighing the pros and cons of both these options is the surefire way for a company to make an informed decision. So, let’s check out the merits and demerits of both choices.


Advantages of outsourcing

  • Availability of a hugely talented workforce: A never-ending pool of talented professionals is one of the major advantages. You can rely on vendors to get help with it from efficient professionals.
  • The flexibility of costs: Many countries around the world offer cheap options. Several parts of Europe, with excellent IT sphere and infrastructure, constitute a case in hand. When you rely on the readymade pool of talented individuals, unlike the in-house app development approach, you don't need to allocate funds separately for training. 
  • Faster delivery of products: When you work with an in-house team of professionals, you always need to strike the right balance between the recruitment of professionals and app development projects in hand. However, you do not need to worry about the same if you adopt the approach of software development. It doesn't necessitate much effort in balancing out the number of resources vis-a-vis the number of projects in hand.
  • Scalability: Achieving scalability with a team of specialists is much easier in comparison to that of an in-house team. You can either choose to increase or decrease its size, depending on your needs. What’s more, you also get the choice to do it according to your will. 
  • A wider range of technological choices: Sometimes, a region may not have human resources for specific projects. For instance, you may not find a suitable UI/UX design developer for your project. Outsourcing your project to another company can be of great help in such situations. Vendors from other regions can make arrangements to fulfill this requirement. As a spin-off, you get your work done without any delay and also get the assurance that a specialist will work on your project.

Disadvantages of outsourcing

  • Less security due to lack of communication: Lack of security is one of the leading causes due to which a business owner needs to think twice before opting to go with it. Because direct communication is difficult in this respect, there is a wider scope for the theft of groundwork and ideas. You can minimize the risks in this regard by signing an NDA contract with a vendor. Whether you trust your vendor or not, you can prevent such possibilities by performing this smart step.
  • A gap in communication: Though English is the international language for communication, all app development professionals working under a vendor may not know be very proficient at it. It increases the chances of a communication gap during the briefing as well as the execution stage of your project.
  • The difference in the time zone: Time zones vary as you go from one country to the other. You may not face any challenge if the difference in the timings is less significant. However, differences in the timings ranging up to a few hours can mince up matters for you, especially if you wish to get into a conversation with the app-development professionals from the vendor’s end.

Advantages of in-house software development

  • Easy integration with the culture of a company: When staff members work as permanent members for a business organization, they operate as a team for its benefit. They look for new ways to work together and add more value to the organization with their contribution.
  • Direct communication: Communication is the key to success. Without proper communication, you can’t expect your work to be done in the right way. Hence, most companies prefer direct communication among staff members these days. It prevents the possibility of misunderstanding among staff members.
  • Smooth implementation of changes: It is simple and easy for app development companies to operate with a functional team of developers. Unlike a bunch of outsourcing developers operating from a distance, an in-house development team works swiftly to fix various issues.

Disadvantages of in-house software development

  • Higher expenditure: The price factor looms large while running a company with a team of in-house developers. Apart from basic expenses, a company spends money on taxes and the training of employees if it goes with an in-house team. Employee benefits also add up to the overall operational costs.
  • Difficulty in the recruitment of technically talented manpower: Hiring people for IT job roles in certain regions is easier said than done. App developers are in high demand in the IT market. Due to the growing competition, a company either hires quality staff members at a higher salary package or remains content with mediocre staff members.
  • Low turnover of staff members: Software developers believe in switching companies. While its frequency may vary, the basic tendency remains the same among the majority of them. Generally, they do so in search of better opportunities. Companies strive to provide better working conditions to attract as well as retain top talents.

Outsourcing vs In-House Software Development: Which Is the Better Choice for Your Company?

From the above discussion, it is evident that both the alternatives have positives as well as downsides. As such, what appears to be the best option for an application development company may not be the same for others. The best bet to do so is to decide depending on your budget and operational requirements. It is a surefire way for a company to boost its profit margin and cut down the losses.

  • As a leading Vietnam software development company at Saigon Technology, we dedicate ourselves to your success by following our philosophy: Your success is our mission.
Content Manager

Thanh (Bruce) Pham CEO of Saigon Technology

A Member of Forbes Technology Council

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