In-house Development Vs Outsourcing: Overview of Pros and Cons

6 min read

Hiring a Software development company has never been an easy task. Choosing between In-House Development or Outsourced development is one of the most difficult decisions one might have to make. Organizing this development process becomes challenging as you go on to find some talented tech specialists. There are many factors that a person needs to consider such as money, time, skills, experience, working hours, etc. If you have just started a Software Startup, then it becomes even more crucial to avoid making any mistake that might have a huge impact on the company’s growth. Due to financial statements, many companies go for outsourced development as you can choose a pocket-friendly team. In this blog, you will read about what exactly is In-house development and what is Outsourcing with its pros and cons.

In-House Development:

When the projects or assignments are assigned to people who already work for the company, or assigned to new employees hired by the company, it is referred to as In-House Development. You would need to hire or select the right people for a particular task. Take into consideration their specializations and then hire them. In-House development means that you will have to build a team for your organization from scratch, i.e, go through all the steps that include interviews, reviewing applications, recruiting, onboarding, etc.

Outsourcing:

The practice of hiring a developed workforce of any other organization for a certain period or the duration of a particular project is called outsourcing. Companies generally go for outsourcing because of the cost-benefit and scalability. There are several companies in the field of travel, media, telecommunications, and more that rely on outsourcing for the completion of tasks and projects.

Pros and cons of In-house development:

Pros:

1.Full involvement:

With the team working from the office, for the office, the engagement rate would be higher and so would be the involvement of all the concerned parties. The project details, updates can be shared with the organization. All the teams would be included in every step of the project and the authorities would have full control over the activities happening.

2.Company culture:

There are a few core values, morals, that every company has. Employees must learn to align their values with the company culture. With In-House Development, there is a plus point that you get to have a team whose values match with your companies’.

3.Effective Communication:

Communication is the key in any relationship; personal or professional. With an In-House Development team, the communication process would become much faster and efficient. You would not need to wait for emails to set up calls and can just have a face-to-face meeting to clear things up. 

Cons:

1.Required skillset:

The trends tend to keep changing in every industry nowadays. With the In-House Development option, you don’t have the option of choosing from abundance for every project. As the software development trends keep changing, it is necessary to make sure that your teams’ skills are always up to the level and match the requirements of the given tasks/projects. Keeping up with the changes becomes crucial when it can have an impact on the company’s growth.

2.It is costly:

Hiring an In-House team means paying for vacations, sick leaves, social security, recruitment, onboarding, etc. There are a lot of factors that come into play when talking about the finances of an In-House team. Even if the team has no projects or leads for a while, you would still be required to pay their salary.

3.Experience in hiring:

While hiring a new team, you must ensure that your decisions don’t have any negative impact on the company. Hiring the right people for the job becomes very important when you are utilizing the company’s resources and finances. Make sure that the added pressure does not cause any wrong decisions from your side.

Pros and Cons of Outsourcing:

Pros:

1.Lower rates:

Outsourcing cuts many expenses such as recruitment, onboarding, training, etc. With the same level of talent and expertise, or maybe more, you can have teamwork for the company at lower rates. One would not have to build a team from scratch and can choose the professionals from a sea of talented individuals.

2.No commitment:

Hiring for a particular project or a particular time means that you don’t need to commit, which is great. You can fire or hire anyone after a project without feeling guilty. This would also bring a different skill set and experience to several people over the course of many projects.

3.Abundant talent:

Outsourcing includes choosing the best from the crowd. The world is filled with talented professionals who are waiting to get that one chance to prove themselves. Do your research and select the people who meet the requirements of the project, the company, and can deliver quality content within the given time.

Cons:

1.Time difference:

The best options for the job may serve your company from different countries. This means that you would have to suffer the consequence of the time difference. It can get a little problematic as the meetings would happen at an odd time for either of the parties. The time difference would also lead to delayed communication.

2.Lack of Control:

With an In-House Development team, you get to live and give inputs on every step of the development process but with an Outsourcing team, you would have limited control as they would not be working in the office. Your engagement would not be much with an outsourced team.

3.Trust Issues:

Signing an NDA and doing proper research on the outsourcing team is of utmost importance. As beneficial as the team sounds, they are a 3rd party after all. Make sure you take all the necessary steps and trust the right people.

Conclusion:

There are pros and cons for both; In-House Development team and the Outsourcing team. It depends on the company’s requirements and budget that which option is the best for them. Make an informed decision and do thorough research. 


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