In-house team or Outsourcing? What to choose?

Before starting any project, the first thought to pop up in mind is regarding the specialists and professionals required for the completion of it. There is a need to determine how to coordinate the processes of software development once it is time to implement the idea. The question therefore arises: what team of software developers to employ,  in-house or outsourced?

The rapid speed at which technology advances means that there is a change in the software development industry. New programming languages are adopted and new methodologies are created as more creative methods take over, prior industry-standard methods become redundant.

Corporations and their power over tasks and choices will contrast contingent upon whether the organization is utilizing their in-house teams or opting for outsourcing.

The solution is never black or white, but  when it comes to the question of getting in-house developers or outsourcing IT specialists for software development, it seems kind of grey. There is a list of  pros and cons associated with choosing either. 

Before we jump to the pros and cons of them, let’s discuss what each of these options means. Software development requires IT-specialists to assist in making the development process smooth. These IT-specialists are either inhouse or outsourced.

Outsourcing software development 

When organizations prefer to have a software developed by third parties rather than their internal in-house teams, software outsourcing takes place. The development of outsourcing software has many benefits, including cost savings, enhanced performance, mitigated risk, and improved security.

There are different possibilities when it comes to outsourcing. Companies can choose to nearshore, offshore, and onshore. The difference between these types solely is related to the distance and geographical locations – well the name suggests so too!

Over the last few decades, there has been a huge rise in outsourcing software development in the tech industry. According to sources, almost 65% of companies now outsource their entire software development processes. 

But before we move ahead, let’s shed light on what exactly outsourcing software development means. This term refers to when corporations hire third parties to let them take care of their software development processes entirely. This software can include management software for your own company or commercial software for your clientele.

The corporation’s authority over activities and choices will vary on the choice of outsourcing or in-house development. 

Outsourcing also helps the corporation and its staff to focus on their team management and put more emphasis on the outcome generation and growth of the business. 

However, organisations must consider a handful of tips before choosing a team for outsourcing for maximised benefits and effectiveness.

There is a list of certain pros and cons associated with choosing either. 

Pros

Cost Effective

Outsourcing also acts as a cost saving tool hence it is a win-win!

How outsourcing saves money? – well, hiring in-house IT specialists or training your pre-existing staff can cost a hefty amount of money. it will require a number of resources before you can even begin to develop software internally. 

Moreover, another interesting aspect of this is the fact that you can outsource software development specialists from any part of the world. You can find great IT specialists at a fraction of the cost, hence the overall cost reduction is obvious. However, companies should not compromise on the quality of the software being developed just to save a couple of dollars. 

Getting a good deal on expenses is ordinarily the inspiration for outsourcing software development to third parties.Just because it’s expensive, doesn’t always mean it is better, which is the case for some companies when it comes to utilizing their inhouse teams. Being cost effective is the new thing 

Internal teams remain focused 

Most corporations have small scale internal workforces that are not equipped  to manage multiple projects at a single time. If this  workforce is divided to work on different projects, it can create  a lot of difficulties. 

To begin with, there will be absolutely no focus. The workers will have so much going around them that there are chances that they will not be completely efficient.

Moreover, dividing teams will not encourage teamwork – one of the essentials for there to be good growth and communication within the workforce . 

To  avoid such possible outcomes and delays in deliveries, it is recommended to outsource some of the projects to maintain a healthy working environment as well as quality deliverance of services. 

This will also ensure that the internal workforce focuses entirely on the major projects and experiments with new ideas to generate more revenue for the company. 

External expertise 

For the deliverance of software to be upto the mark, the developers must have relevant expertise. Most of the third party agencies have accumulated technical expertise as a result of working with a diverse range of clientele. 

When a corporation’s internal team lacks particular expertise, outsourcing to other agencies and IT specialists can help tackle that. They have extremely experienced IT specialists that will develop and deliver the project according to the client’s preference. 

This not only ensures the quality of the service but also ensures that the project is delivered right on time – something that might not be possible when working with in-house teams. 

Therefore, these dedicated teams and their updated resources will be a life savior!

Improved product quality  

As we mentioned before, these agencies have high technical expertise and resources hence the outcome is polished and better than what an in-house team might create. 

This is important because it will ensure that the corporation is maintaining the clients expectations as well as maintaining a standard of quality along with a good image in the vast world of technology. 

Cons 

Challenges in communication 

It is easier to communicate with an in-house team rather than with an outsourced third party. Moreover, communication does play a vital role in shaping the smooth functioning of the process. 

Outsourced teams are geographically distant, making it difficult to communicate with them. With this being said, it is also difficult to keep track of the progress made on the project. 

This can become even more difficult if your outsourced third party is in another part of the world because that will cause time zone differences and well as particular language and communication barriers. 

It seems easier to walk to an employees desk and communicate face to face as compared to setting up a zoom conference. However, this is a trade off that companies are willing to take in order to maintain quality. 

However, using management software like Slack and Jira to review progress, can solve this problem, as these softwares smooth down communication as well as streamline the company hierarchy. The evolution and advancements in technology have made it easier to communicate with outsourced teams today. 

Lack of control

Companies can often lose track of the projects they have assigned to third parties and this can put them in a pretty challenging situation. If  control becomes limited, management becomes far removed from the people who actually do the work which leads to lack of communication, which can mean having a costly solution with a sub-par product that may or may not be behind schedule. But all this can be taken care of by using the right risk management and communication strategies.

If you are a control freak, then outsourcing is not the best option for you. In order to gain success out of outsourcing, the corporation needs to trust the outsourced company. 

Outsourcing works quite well for corporations that have a delegated style of management. 

In-house software development 

In-house software development refers to when a team of developers from an existing workforce are responsible for creating softwares. These employees are not specifically hired for a project. 

The operations are done within the corporation and there is no reliance on any third party. Like we said before, the choice between outsourcing and in-house development is gray because there are pros and cons on both sides of the equation. 

Similarly, in-house software development has its own set of pros and cons. While it may be easier to manage and communicate, it is difficult to attain the same level of expertise gained from outsourcing to third parties. 

Pros 

In-house developers will be easier to communicate with and will have an element of control. This is because the team working on the project is within the corporation. 

Easier to communicate 

Moreover, there are no geographical distances when it comes to in-house software development. 

Face-to-face discussions and the same working hours allow for rapid feedback from the managers hence the process of software development is smoother and rapid feedback ensures fewer changes in the final product. 

Tracking Progress 

When you have an in-house team working in the same organization as you, it is extremely easy to track down the progress and give instant remarks and feedback. 

Moreover, reviewing the project alongside will ensure that the project is completed on time and there are fewer chances for any redos and last minute changes.  If you’re a total control freak and want to stay on top of everything. Then outsourcing would certainly not be the best option for you.

Cons:

More time consuming 

In-house development is relatively more time consuming than outsourcing because assigning new projects will require a good amount of time in order for the employees to become used to. 

They will need proper guidance and assistance, however this was not the case in outsourcing, as an outsourced third party is a group of IT specialists with the correct expertise. 

This will add on to the time of software development on the whole. 

Lack of relevant technical knowledge 

In-house developers usually lack technical knowledge when it comes to new projects of software development. They are confined to standard projects every now and then and this creates the overall process overwhelming. 

It is natural that it is not possible to vather every skill in a single team. Diversity of expertise is necessary in order for the quality of services to remain intact. 

Therefore, outsourcing tackles this and provides the organisation with experienced tech specialists that create these softwares with validity sustained. 

Management issues 

It seems that it is easier to manage in-house teams as compared to outsourcing but that is not always the case. Workers within a team do not always correspond well with each other as a result of individual differences and ideas. 

Managing a team and enabling them to work can be a nightmare and requires serious project management. This is something that outsourcing does not require since you can sit back and relax while the outsourced company does the work. 

Higher costs 

In-house development also means an increase in the cost of software development. Let’s dig into this further. 

Training of the workforce is high on budget. In order for them to work effectively, they will obviously need relevant training. The cost of training is high, way too high honestly… 

you will be in a long term commitment hence the standard payrolls will be a headache, literally. Not only this, you will also have to provide the workers with insurances and certain benefits like health, education, etc and take into consideration employee protection laws. 

This already sounds hectic as compared to the ease of just outsourcing to a third party. 

Outsourcing success stories 

Did you know that successful corporations like Google have also relied on outsourcing? The success of a few companies have been a result of outsourcing software development processes for sure. 

Below mentioned are two success stories that are self sufficient in defining the significance and ease of outsourcing. 

Ali Baba 

Everyone knows about Jack Ma – the founder of Ali Baba. According to Statistica, Ali Baba generated sales worth approximately 54.5 billion USD. It is one of the leading ecommerce sites globally. 

The autobiography of Jack Ma stated that Ali Baba initially also relied on outsourcing for software development. Back then in 1999, they hired software developers from the US for better development and expertise. 

The book also states that the motive behind was to appeal to audiences around the globe and to find expertise globally for high quality of services. 

Whatsapp

I do not even need to explain what whatsapp is. According to Statistica, it has over 1.5 billion active users across 180 countries. Wow, that is a lot. 

The owners of whatsapp, Jan Koum and Brian Acton began their startup with a small amount of money and obviously wanted to save costs as well as didn’t want to compromise on the quality.  

It is known that they outsource their software development projects to third parties based in Russia to limit operational expenses as well as to gain exceptionally talented software developers that may be a lot costly and expensive to hire locally.

 WhatsApp today is the third most downloaded Android application on the planet and the quantity of WhatsApp clients in the USA is anticipated to be 25.6 million by 2021.

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