In-house Software Development vs Outsourcing: What Is Best?

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Published On

August 11, 2022


Since the COVID-19 Pandemic first began in 2020, the world has been evolving at a rapid pace. The pandemic brought about changes to every aspect of life. One of these changes was an increased reliance on technology, especially in business.

In a survey of executives in the United States, nearly all respondents said that the impact of the COVID-19 crisis accelerated their use of technology and software by three to four years.

More and more companies worldwide rely on software. Business software is a system or application that can help improve, support, and automate processes. From start-ups to corporations, it is a critical component of how they do business.

The global business software market is expected to grow by 11.7% by the year 2030. Advances in technology and dependency on automation over the last few years are leading more businesses, from retail to healthcare, to create their own software that is custom to their specific processes.

If your business needs a software development team, there are two options to consider: in-house software development vs outsourcing. Which of these approaches is best for your project? To understand which one is right for you, this article will explore both methods and compare the pros and cons so you can make an informed decision about hiring developers for your next project.


What is In-House Software Development?

In-house software development means using an internal team of software developers that are employed by you. You are responsible to interview and hire each individual person who becomes a permanent employee. The entire team works full-time to build and maintain custom software, and all of their tasks are performed for your business alone.

Assembling your own in-house development team can be highly beneficial, depending on your business and projects, but it also has severe drawbacks. Here are the pros and cons to consider:


Advantages of In-House Software Development:


Hand-picked Hires

Because you get to interview each candidate yourself, it can ensure that they are a good fit for your business. Every company's culture is unique, and it's important for your employees to be of the same mind and attitude. The likelihood that your development team aligns with the core values and behaviors of your business increases when you are able to assess and recruit them yourself.


More Motivation

An in-house team may be more engaged and dedicated to your projects. Since they are permanent fixtures to your business, they may be more inclined to add as much value as they can by achieving the best results. Working towards one shared goal makes an efficient and effective team.


Clear Communication

Misunderstandings are less likely to happen with face-to-face communication. Sharing the same office space and having the same hours means that your in-house development team is more available for interactions with you or with one another. This is especially helpful when their involvement is needed to make quick changes to a project, or when it's crunch time before an important deadline.


Disadvantages of In-House Software Development:


Extreme Expenses

There is a high price to having an in-house team that your business may not be able to afford. These costs include recruitment, training, salaries, benefits, infrastructure, and equipment. If a developer resigns, or the team needs to expand, many of those costs are repeated. It can put a strain on resources and budgets, especially for a small business or start-up.


Too Much Turnover

The demand for software developers is high, and there is a chance that members of your team will leave for a different opportunity. This may happen at an inopportune time, affecting projects and pushing back deadlines. Finding a new developer is time-consuming and takes a lot of effort, and it slows down production from your remaining in-house developers.


Skills Shortage

When building an in-house team, you may find that there is a lack of qualified developers in your local area. This means that either the hiring process will take a long time, or you could be forced to hire candidates that do not meet your standards for soft or hard skills. In the long run, this could have a negative effect on your business' productivity and work quality.

Is In-House a Good Option for Your Business?

While there are benefits to having an in-house development team, the risks involved can be very costly. An in-house team is a great option for you if the core of your business is completely focused on software. For example, if your business creates and sells office applications, it requires a strong, dedicated software development staff. Having your own team makes logical and financial sense.

In-house development is also a good choice if budget is not a concern. If your business has the means to maintain a full-time software development team, and you value the ability to oversee people and projects fully in all areas, this may be a valid option to consider.


What is Outsourcing Software Development?

Outsourcing software development means using a third-party service provider to create and build software that's specifically tailored to your business. The development process is discussed in detail with a project manager, development costs are agreed upon, and then the outsourced team develops custom solutions.

Working with an outsourced development team is the most favored choice for business owners. Sixty-four percent of companies across the world outsource their software development rather than doing it themselves. What is it that makes outsourcing the preferred software development method?


Advantages of Outsourcing Software Development:


Reasonable Rates

By outsourcing software development, your business can bypass all of the expenses that come with hiring and retaining employees. Typically, the outsourced team works remotely, which reduces costs, because equipment and workspace aren't required. If you have a set budget, projects can be scaled accordingly.


Assurance of Abilities

When you choose a software outsourcing partner, the talent pool increases considerably. Using a remote team means that you are not limited to your geographic location. Software development agencies have the means to hire a wide range of professionals with specific skills, knowledge, and expertise. They can curate the best technology team that is most qualified to meet your business needs. You won't have to deal with the stress of interviewing applicants to find the best one.


Simple Scalability

Depending on the nature of your software development project, software development companies can quickly and easily adjust the size of the external team. If you find that you need the final outcome sooner than anticipated, more developers can be added to the team. On the other hand, if a deadline has been pushed back, the team can be scaled down.


Proven Processes

Outsourcing companies have tried and true methods to ensure your project's success. Their developers are highly experienced and efficient, and they have established workflows, which results in a quick turnaround time. Choosing a reliable vendor can give you peace of mind throughout the whole process, knowing that your project is in good hands. This allows you to focus on your core business while the development process is underway.


Disadvantages of Outsourcing Software Development:


Minimized Management

When partnering with third-party software developers, there is deferred control. Usually, it can be beneficial because it frees you to complete other important tasks, but sometimes it becomes a challenge to ensure the work is up to your standards. However, a quality software development company will make sure that good project management tools are in place for prompt communication and frequent check-ins.


Communication Concerns

Speaking of communication, there can occasionally be logistical challenges to establishing contact when necessary. Sometimes software development services are located in different time zones which can make meetings and calls a problem to navigate. There are some vendors located in other countries, and language or cultural differences can hinder accurate communication. It's important to verify the location, time zone, and working hours of an outsourcing company before choosing to work with them. If it seems like the communication process is inadequate or could have potential problems, it's worth finding a different one.


Developer with Divided Attention

One possible risk of working with an outsourcing partner is that team engagement may be less than ideal. If the outsourcing firm has inadequate project managers, they might assign multiple projects to their developers. Their focus could be in too many places at once, resulting in poor performance for your business. That being said, a good outsourcing firm will know how to balance and manage assignments well.


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Is Outsourcing a Good Option for Your Business?

The advantages of choosing to outsource software development far outweigh the possible weaknesses. The potential risks can even be completely eliminated when you hire an outstanding software development service. The most difficult part of outsourcing is finding the right outsourcing partner for your business.

Talentcrowd is a trustworthy source and the perfect solution for finding a qualified, skilled technology team. If in-house software development is not feasible or advantageous for your business, Talentcrowd has hundreds of experts who will design and build exactly what you need, when you need it.


Why is Talentcrowd Best for Your Business?

Talentcrowd stands out from the competition in countless ways. They are based in North America, which means they are available to your business during normal working hours. This eliminates any potential miscommunications due to cultural differences or a time zone difference.

Each developer at Talentcrowd goes through extensive testing to ensure that they hire only the most highly skilled professionals. They are required to not only have the necessary hard skills but the right soft skills too, like attitude and values. Talentcrowd evaluates your needs and then curates the ideal team accordingly. Every team member assigned to your specific project is handpicked especially for your business, and it gives you access to a wide range of knowledge, skills, and expertise.

Not only does Talentcrowd hire the best developers, but they have high retention rates. You won't have to worry about turnover affecting your projects and deadlines. Collaborating with the outsourced developers can feel as familiar as working with your own in-house teammates.

Talentcrowd offers transparent pricing and competitive rates. It's easy to fit their services into your budget as you can scale your projects up or down, and you can also choose whether to work with their developers full-time, part-time, or hourly. This makes their services available to even the smallest business.

Working remotely is relatively new but increasingly common due to the COVID-19 pandemic. However, it has always been Talentcrowd's approach. They are fully remote, flexible, and efficient that way. Because of their extensive experience, Talentcrowd can serve their clients anywhere, whether you are in the office or working remotely.


Final Reflections

As businesses rely more on technology and software now than before the COVID-19 pandemic, finding the best software solution can be intimidating. Both methods of software development are effective in their own ways. Evaluating all of the advantages and disadvantages of in-house vs outsourcing will help you to minimize risk and make the right decision.

If the core of your business is IT or developing software, and you have the financial means and available expertise to justify all the costs, then in-house development may be the right choice for your business.

However, if you need cost flexibility, access to greater skills, and reliable execution of your projects, then choosing a quality outsourcing development service might be what exactly you're looking for.

Partnering with Talentcrowd is quick and easy. Start by submitting your job to their experts. They will then evaluate it and match you with the perfect team of software developers curated especially for your project. You will gain immediate access to their extensive expertise, and you can be assured that they will provide you with high-quality digital services.

Contact Talentcrowd today to outsource your software development to a trusted and talented technology team.