Outsourcing vs in-house software development – which path should you go?


Outsourcing vs in-house software development – which path should you go?

Outsourcing vs inhouse in software development is a debate that has been going on ever since the market for software was conceived. The truth is that both approaches have their benefits and choosing the right one is a decision that depends on many factors. Use our advice to find the very best way to solve the outsourcing vs inhouse issue for your software project.


Only recently, we wrote an article about the issue of web development outsourcing for UK-based companies, offering advice for companies located in UK on how to find the best outsourcing partner and minimize typical risks related to this activity. That’s because it’s hard to deny their existence. According to the research by the Aberdeen Group, 76% of outsourcing customers admit to having borne costs higher than anticipated, with project administration and vendor management listed as the most common problematic areas. Still, there are many outsourcing providers that offer great quality at a competitive price and hiring an in-house team also has downsides, which often render this option completely unacceptable.


The joy of having an in-house team

How wonderful it is to have a great and experienced in-house team! Just imagine. They are right there with you everyday, constantly learning about the way your websites, apps and entire IT infrastructure function. They are committed to you in a long term, so when they need to learn something new, you may think about it as an investment. When an emergency happens, your problem is their priority. As a matter of fact, they are you. You are a part of the same company and you have the same objective, which is difficult to achieve with an external company whether it is located in your country or overseas.


Sometimes things turn sour

But this optimistic image of an in-house team isn’t a reality for the majority of companies that want to develop software. On their way there are at least three obstacles:

  • the hiring process
  • cost
  • varying work intensity

It takes qualified resources in the first place to hire really skilled developers. Even if do find them, you’re in for a cost in the region of 100,000$ a year per developer. It would all be alright providing you always had important tasks for them to complete. But unless you constantly develop new software, the work intensity may vary greatly. But you’re still obliged to respect the contact and pay your developer their salary. Depending on the nature of your project, you may have to at least supply your team with additional external developers or ever entrust your entire project to a software development outsourcing provider. Sounds scary? Use this fear to encourage you to find the best software development outsourcing option out there.


Outsourcing vs inhouse – the many colors of software development outsourcing

There are many types of software development outsourcing. Some companies turn to the body shopping in order to ‘rent’ developers as they need them. A lot of software houses can be hired as outsourcing providers to develop an entire project. Depending on the location of your software house, we can distinguish local and offshore software development outsourcing. Needless to say, outsourcing providers also greatly vary in terms of quality. We will talk about the different types of outsourcing on another occasion. This time, let’s focus on the most typical advantages and disadvantages of software development outsourcing in general.


Outsourcing vs inhouse – the bad of software development outsourcing

If you did your math and decided that hiring permanently an in-house team for a price of over $75 per hour of a single developer’s job is not a viable option, you turn to outsourcing. And you’re probably doing it very carefully for a number of reasons:


  • The varying quality and hidden costs

Oftentimes, the price per hour of your outsourcing partner may be the single catchiest thing about their offer. But the price tag doesn’t say a thing about the developer that will be tasked with working on your project. Inexperienced developers may produce non-scalable and low quality code that may cost you a lot more in future refinements. Provided they are not able to solve your problem immediately, are you ready to pay them for the time they need to learn your technologies and environment?


  • Communication problems

A typical problem that often causes people pondering the outsourcing vs inhouse question to choose the latter is the geographical distance that causes differences in the daytime. In result, at the time when you need your team the most, they may very well be sleeping. But communication online also suffers due to lack of organization. Communication problems pile up when you can’t meet with your web development outsourcing provider personally at least from time to time. Some companies never see their freelancer software developers with their own eyes! And that’s a shame, because just one face-to-face meeting is enough to polish a project specification and establish a connection and trust between both sides.


  • Prioritization

For your software outsourcing provider you may become one many. And you never know for sure just how important you are compared to other clients.


Outsourcing vs inhouse – the good of software development outsourcing

All of the problems may be easily solved as long as you come across a quality outsourcing provider. Let’s find out just how to do that.


  • Pick a software house that has exciting specializations

Some software companies providing outsourcing services specialize in areas that compel them to build up proper expertise. Try to find a software house experienced in the specific niche you’re interested in such as data engineering, Java outsourcing, Scala outsourcing, eHealth or eCommerce. Search their portfolios to find examples of advanced projects from the niche they specialize in. A software house like this will ensure solid quality while still being very competitive price-wise.


  • Consider the location of your provider as an important factor

As I mentioned previously, outsourcing may take place locally – to a company located in your town or country – abroad (including the offshore software development outsourcing to countries located far from the customer). The quality of software houses may vary greatly depending on locations. Destinations such as India or Bangladesh provide a wide choice of houses that range from very bad to very good. The number of the former is so large that a decision to outsource will always carry serious risks. Other popular destinations include Poland, which provides quality developers. It also has a nearly identical daytime to counties located in the Western Europe (one hour of difference between Poland and UK) and Scandinavia and may easily adapt to the daytime of American companies.

  • Use the initial stage to assess your provider’s interest in you

If you hire a software house to develop an entire project, you’re likely to spend some time working with them even before the contract is signed and the actual development takes place. A lot of quality software hoses uses the time to help the customer developer a project specification, letting the customer keep it even if the contract never materializes. They also encourage a project kickoff meeting – an in-person meeting that usually takes place at the customer’s site, aimed at getting everyone involved in the project on the same page.

The choice between an in-house team and software development outsourcing provider comes down to the cost of the former and the quality of the latter. If setting up an in-house team proves too costly, you should try to find a software outsourcing company. I hope that the article will help you find your answer to the outsourcing vs inhouse problem as well as a software outsourcing company that will let you both save money and get everything done on time.


Learn more about pricing in web development outsourcing in our fixed price vs time and material article.

Sensinum is a Polish software house offering top quality software development services to companies, marketing agencies and teams. If you look for a subcontractor or a software house to cooperate on your own project, you’re in a right place! Sensinum provides you with a communicative team of highly experienced developers working regularly on advanced projects. Don’t lose your opportunity, contact us and consult your software idea for free.

Sensinum Team
Sensinum Team