Is in-house or outsourced software development the best route to go when it comes to creating software for your business? The answer isn’t clear cut – it depends on your goals, budget, timeline, and more.
But no matter which way you go, you need an experienced, skilled development team to translate your ideas into a usable system.
Choosing the right team for you doesn’t have to be difficult. Ultimately, it comes down to two main options: you can hire a team for in-house development or outsource the project to a software development company.
In-House Software Development
When a company has an in-house software development team, they are hiring a group of software developers, project managers, and quality assurance specialists to complete their projects without the help of anyone outside the business.
If a company is choosing in-house development to create their own software product, their in-house development team will complete the entire project from planning to development to testing.
In-house software development is most common in large companies that are regularly developing and maintaining their own software and digital projects, such as Amazon, Boeing, and PayPal.
3 Benefits of an In-House Development Team
There are quite a few benefits to hiring full-time employees to join your company’s in-house development team and work on your software development projects. Here are three worth mentioning:
On-Demand Communication
Being in the same time zone and having the same work hours as your dedicated development teams can be an invaluable asset to your company and your in-house development project. Your in-house team can save time by getting answers quickly and by being able to easily schedule meetings for updates or problem-solving sessions.
In addition, you and your in-house development team may feel more comfortable communicating with each other than you would with developers outside the company. As a result, you may have more direct and clear conversations which allow you to avoid misunderstandings and increase efficiency.
Quick Modifications
An added benefit of on-demand communication is the ability to discuss and apply changes to the software or project requirements quickly and easily. No need to wait for the next meeting with your team to discuss your concerns or to have your bugs fixed.
It might just be easier for business stakeholders to fit in-house collaboration around packed schedules. Your in-house development team is easy to reach and quick to make whatever changes you need, making the development process smoother and more efficient.
Better Understanding of Company Goals
Having an in-house development team eliminates or mitigates many of the common cultural barriers in outsourced teams. Your employees will have a more comprehensive understanding of your company’s culture, goals, and priorities.
For example, perhaps your in-house team knows your company prioritizes quality over deadlines. They can feel confident in their decision to push back a deadline, so they can uphold the quality of the code they are producing rather than sacrificing it to save time.
Learn more about Geneca’s work styles and goals to see if they’re a good fit for your company.
Disadvantages of In-House Software Development
While in-house software development comes with many benefits, it also has its own challenges:
Employee Turnover
One of the often overlooked risks of in-house software development is employee turnover. In an ideal world, our best team members stay on our team indefinitely.
But what happens when an employee leaves in the middle of a project? What if the worst-case scenario occurs and your entire team leaves around the same time?
Regardless of the situation, you are bound to lose time on the project due to a decreased number of developers, and you may ultimately need to push back deadlines. In this situation, you’ll have to decide between the lesser of two evils. Should you:
- Complete the project with one less teammate and accept that the project will take longer than anticipated
- Spend time and resources to onboard a new team member, losing time initially in hopes of speeding up development once they’re trained
There is no simple solution to employee turnover, and there’s no surefire way to avoid the loss of employees during a project, so keep this in mind when considering in-house development.
Employment Costs
The price of an in-house team costs your company more than their salaries. You’ll also need to factor in the costs of:
- Recruiting
- Training
- Equipment
- Benefits
Your current employees’ time and many resources will be devoted to the employment of an in-house team. As a result, forming a new software development team can be costly and will need to be budgeted for appropriately.
Lack of Comprehensive Talent
Depending on your software development project, your company may need to hire more software developers than you expected to cover every skillset and expertise needed.
You may also find yourself paying for talented individuals that don’t have anything to do for half of the project, like a technical architect or a quality analyst.
Not only does a lack of comprehensive talent lead to additional costs, but you may also find a project takes longer as in-house developers learn about fields, tools, and methods they weren’t previously familiar with.
Outsourcing Software Development
Smaller companies, or companies who don’t regularly need software development services, will often outsource software development to save time and money. With an outsourced software development, companies hire teams on a project-basis.
For example, if a retail company is looking to develop a mobile app for their customers, they’ll hire an outsourced team with experience in the retail industry and expertise in creating mobile applications. This is often an easier solution than hiring full time staff for one project.
Are you a retail company? Read more about how we’ve helped retailers increase profits with ecommerce options.
5 Benefits of Outsourcing Your Software Projects
There are many advantages to outsourcing software development for a new project, including:
Cost Flexibility
An outsourced team builds what you want when you want it. They will help you understand what each feature will cost, allowing you to make decisions that fit your company’s needs and budget.
Unlike an in-house team, you’ll only pay an outsourced team for the time they spend on your project, such as when they are designing, coding, and testing the software. Once the project is over, you no longer have the cost of full-time employees on your plate and can devote those funds to other areas of your business.
Wondering how to budget for your software project? Learn more in our blog post about Budgeting for Software Development Costs.
Industry Talent Pool
An outsourced team is hired from a software development company.
Since software development companies have many employees with a wide range of skills and experience, they can assemble a team with the exact expertise and skillsets your project requires.
Plus, they can do it all in a matter of days, rather than the weeks or months it could take to find the right full-time employee.
Scalability
Similarly, when outsourcing software development, you can quickly and easily scale your project up or down in scope.
If you remove or add features to your software project, the outsourcing company can adjust the number of software developers on your team as needed throughout the software development process.
If deadlines change, it’s also more likely that a software development partner can adapt accordingly.
Faster Completion
Without the need for recruiting, onboarding, and training, outsourcing software development is often faster, and projects are completed on a shorter timeline.
Since the outsourced developers have experience in the areas they’re working on, it’s possible that they’ll work faster than their in-house counterparts who might need to learn as they go or focus on other tasks.
Advanced Technologies
An outsourcing partner is constantly investing in the newest technologies and teaching their employees cutting-edge methods.
When working on projects, outsourced employees will use those technologies and methods to create advanced, updated software that is competitive with other digital products on the marketplace.
As the company hiring them, you’ll get to save money by using their technology while still getting a top-of-the-line software solution that is built to evolve with your business.
Disadvantages of Outsourced Software Development
Outsourcing software development comes with its own challenges, such as:
Communication Gaps
Whether it be different time zones, language barriers, or cultural differences, communication gaps are one of the most common issues when outsourcing software development. Since seamless communication is essential in keeping projects on time and avoiding failed expectations, these gaps can create serious issues in a software project.
Many outsourcing partners will use project management tools to avoid these communication gaps and keep everyone on the same page. If you’re considering outsourcing development, ask your potential software development partner about how they avoid these communication pitfalls during the development process.
Different Work Styles
While in-house teams understand and hold the same values and priorities as your company, the same might not be said for an outsourced team. Your company may prioritize features over timelines, but an outsourced company may be more likely to cut out features to meet deadlines.
These different work styles and priorities can cause tension and miscommunication in software projects, leading to lost time, money, and satisfaction.
Should You Outsource Your Software Development?
If the benefits of outsourcing outweigh the disadvantages of in-house development, then outsourcing may make the most sense for you and your company. If you decide to go the outsourcing route, check out this guide for 9 steps to find the right software development partner.
It’s helpful to discuss communication frequency and methods, establish priorities and expectations early in the project, and ensure the company has developers who have the skills and expertise your project needs.
At Geneca, we:
- Understand your business needs and listen to your goals
- Help you determine what features fit within your budget and timeframe
- Build a team of developers specifically fit for your needs
- Maintain transparency and visibility throughout the duration of your project
If you’re ready to discuss your next software project, contact us today to get started.