In-house vs outsourcing software development: benefits and challenges

Any company that decides to take on a development project is faced with the choice of in-house or outsourced software development. 

This article aims to settle the debate between in-house and outsourcing software development by focusing on their benefits and challenges. 

However, before we jump right into it, it is imperative to understand that each company is different, as is the development project they are trying to execute. Therefore, various factors should be considered, whether you opt for in-house software development or outsource it. (Yes, we will talk about some of those factors.) 

What is In-house software development?

If you are building your development team from the ground up within your company, that’s in-house software development. You will be hiring for multiple positions, including, but not limited to, front-end engineers, back-end engineers, mobile developers, QA specialists, UI/UX specialists, and other relevant roles. 

Why do it? Because it gives you more control over how any development project proceeds. What’s the downside? You’ll bear the cost, including salaries, license fees, devices, and other overhead charges. 

The process is similar to filling a permanent position within your company. You’d be recruiting people from the market, meaning you’d spend a lot of time sifting through resumes, conducting interviews and tests, and then onboarding and training. 

Pros and cons of insourcing

There are certain pros and cons associated with in-house software development. We have created a table for you:

What is outsourcing software development?

If you don’t hire a team in-house and delegate the project (outsource the project) to a development company, you’d choose to outsource the software development. 

The process is accompanied by a legally binding contract that outlines the project’s scope and clearly defines each party’s responsibilities during the contract’s duration. IT services account for 72% of all global outsourcing contract values. 

Outsourcing software development is preferred because it is budget-friendly and allows you to scale without increasing the size of your permanent team. 

Pros and cons of outsourcing

Check out the pros and cons of outsourcing software development:

In-house vs Outsourcing: Which is better?

There is no definite answer to which one is better. The reason is that every project has varying requirements and scope. Choosing which option to choose between in-house and outsourcing software development will depend on certain factors. These factors include, but are not limited to, budget, project scope, business requirements, and both short-term and long-term goals. 

We have discussed these two options in detail, along with their pros and cons. Let’s conduct a cost comparison of both options and determine which one makes more sense to you. Of course, when deciding, you won’t only be looking at the cost. 

Labor Cost

If you outsource to certain countries, such as Pakistan or the Philippines, labor costs will significantly decrease. However, if you outsource to countries such as the United States or the United Kingdom, labor costs will increase. 

However, when considering labor costs, it is also imperative to consider the quality of work. You don’t want to end up with subpar quality work while trying to cut costs. Additionally, you want to outsource to a team where you can easily communicate and language is not a barrier. 

Hiring And Training

Recruiting and training team members isn’t just time-intensive; it also translates into higher costs. On the other hand, when outsourcing a project, you don’t need to worry about finding the right talent and getting them up to speed on how your company runs things. 

Outsourcing providers, such as Coding Crafts, have complete teams readily available. These teams comprise technical personnel, project managers, and non-technical personnel to ensure that every project is executed seamlessly. 

Overhead And Infrastructure

Apart from paying your newly hired employees their salaries and benefits, you must also cover logistics costs. What does that mean? It means you’ll be paying for their office space, software license, devices, and other overhead expenses. These costs are generally clubbed together as CTC (cost to the company), and these costs go away when opting for the outsourcing model. 

Required Level Of Expertise

Each project is different and demands different niche skills, right? So, what are you going to do? Are you going to look for the right talent in your local area whenever you need to undertake a project?

When you opt for the outsourcing model, you can access a global talent pool at economical rates. 

As you can see, while hiring in-house or opting for outsourcing depends generally on the project, it almost always makes sense to choose the outsourcing model. 

Coding Crafts, a trusted partner for outsourcing software development 

As you can see, outsourcing software development offers many benefits compared to in-house software development. However, the key is finding the right development partner for your project. 

It sounds quite simple, but unless you do your due diligence, you will end up with a development agency that doesn’t deliver on time and doesn’t deliver quality work. That’s why investing time in finding the right development agency is crucial. 

There are several ways to approach it. For instance, search for the top 10 development agencies that cater to your specific type of project. From there, you can contact those you like and discuss with them. You’ll need to obtain initial quotes, inquire about previous projects such companies have undertaken, speak to a few of their previous clients, and check their online reputation. 

Additionally, you should join calls with them to assess their communication skills and avoid frustration later in the development cycle. As you can see, it is not a straightforward process and does require initial efforts. However, this is important. Otherwise, you might miss out on the pros of outsourced software development discussed above. 

Do you want to skip all these steps and partner with a great development agency with the experience and expertise? Connect with Coding Crafts today!

We have several teams in place, each with its particular area of expertise, and we take pride in our work. Give us a call today and let’s get started on your software development project!