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App Development
7 minutes read

In-House Development Vs. Outsourcing: Which Is Right for Your Business?

By Robert Kazmi
By Robert Kazmi
App Development
7 minutes read

If your business is looking to develop a mobile app or website, you might weigh in-house development vs. outsourcing. How do you know which approach is best suited for your organization? There are pros and cons associated with in-house development and outsourcing software development. The only way to decide which approach best meets your company’s needs is to understand the pros and cons of each. 

This post will compare in-house software development vs. outsourcing development. Both approaches are great for certain types of businesses. Learn more about each of these options and decide which approach best suits the needs of your business. 

In-House Development Vs. Outsourcing: The Pros and Cons 

In-house development and outsourced team software development both have advantages and disadvantages from a project management perspective. However, to make the best decision for your organization, you need to understand the requirements of your software development project and the resources at your disposal. 

Let’s start by exploring the pros of each approach.

The Pros of In-House Development

Building an in-house development team is a great way to approach software development. The significant advantages associated with in-house development include:

  • Better communication
  • High-quality standards
  • Culture 
  • Ability to pivot quickly 

Better Communication 

Sharing common working hours and working in the same building makes communication simple. In addition, there likely will be no language barriers either. In-house development teams work together today, and managers can directly converse with the team. Direct communication reduces misunderstandings and increases effectiveness. 

High-Quality Standards 

Employing an in-house team of software developers makes it easier to enforce quality standards. For managers, it is simpler to oversee development tasks and ensure code quality when they are all being done under one roof. The other reason having an in-house team is beneficial is that it makes it easier to keep track of compliance and accessibility standards. 

Culture 

Software developers that are permanent members of a company are far more likely to pay attention to the needs of the organization. When you build an in-house team, you can create a strong development culture and hire software developers that align with your company’s internal culture. Don’t underestimate the value and importance of forging a strong organizational culture. 

Ability to Pivot Quickly 

Perhaps the greatest benefit of in-house development is the ability to quickly change course, add new features, and make other changes to a project. Sometimes decisions need to be made quickly, and with an in-house team, you can quickly align your development efforts to meet the changing needs of your organization in real-time. 

The Pros of Outsourcing Development 

Outsourcing software development is a very popular option for several good reasons. The primary advantages of outsourcing include:

  • Cost-effective 
  • Access to more talent 
  • Scalability 
  • Faster turnaround time

Cost-Effective

Outsourcing development is popular because it is the most cost-effective approach to software development. Not only are there several providers competing for your business, which drives prices down, but your company also doesn’t have to pay the costs associated with employment, like benefits, hardware and software, office space, etc. In addition, you can hire a highly skilled outsourced team of software developers from parts of the world where labor is less expensive, like Latin America or Eastern Europe. 

Access to More Talent 

Hiring an outsourced team gives your business access to far more development talent than is available in its local area. Not only can you pick and choose from a highly-skilled pool of software developers, but you can also choose talent with the experience that most closely aligns with your organization’s needs. In addition, outsourcing development allows your business to consider more people for your open positions. 

Scalability 

Outsourcing software development gives your organization the flexibility to scale up and down rapidly. For example, if your development project intensifies, you can quickly add more software developers to your outsourced team to meet demands. However, if a project is cooling down or demand dips, you can scale down without having to fire developers that you have hired. 

Faster Turnaround Time 

When you choose to outsource software development, you unlock faster development times. Instead of training and onboarding new hires, your outsourced team is ready to get to work from day one. In addition, you don’t have to spend time recruiting talent. All in all, if you are looking for speed, outsourcing development is the best choice your business can make. 

Now that you understand the benefits of each approach let’s explore the cons associated with each option. 

The Cons of In-House Development 

Every option has drawbacks, and in-house software development is no different. The main drawbacks of this approach include:

  • Cost 
  • Talent retention 
  • Lack of local skill

Cost 

The most significant obstacle standing in the way of most companies that want to build an in-house development team is cost. Not only are the salaries for software developers high, but you have to account for related costs like hardware and software, training, benefits, office space, recruiting, and retention. Unfortunately, the high cost of in-house development pushes many interested companies away from this option. 

Talent Retention 

Retaining skilled software developers is a difficult task. These positions come with high salaries, and there is never a shortage of companies looking for skilled development talent. As a result, retaining in-house developers can be difficult, and it requires a significant investment on the part of the company to continuously engage and please these employees. 

Lack of Local Skill 

Even if you want to build an in-house development team, you might not have sufficient talent in your local area. Besides cost, the most common roadblock companies run into when trying to build an in-house team is a lack of talent. If you require specialized software developers, you might not be able to find them in your area. 

The Cons of Outsourcing Development 

While outsourcing development comes with an impressive set of benefits, there are some cons to this approach as well, including:

  • Logistic challenges 
  • Less control 

Logistic Challenges

The most common issue associated with outsourcing is the logistic challenges of communication and collaboration. This issue is only exacerbated if you choose to pursue offshore outsourcing over nearshore outsourcing. If you are going to outsource software development, nearshore is the best option because it keeps your business more aligned culturally and temporally with its outsourced team. 

Less Control 

Typically, less control is a benefit that allows your business to focus on core competencies. However, in some cases, lack of control can lead to quality control issues. A good outsourced team will ensure that the proper management tools are in place to allow your business to provide regular feedback and receive updates. 

Final Thoughts 

Both in-house and outsourced development are good options. Generally, in-house development will best suit large companies that have ongoing development projects, and outsourcing will best benefit startups and SMBs that need to control costs without compromising software quality. If you want to better understand the debate surrounding in-house development vs. outsourcing, reach out to an experienced app development partner.

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