When assessing your software development needs, at some point you will need to decide whether to develop in-house or use a software outsourcing partner.
In-house development involves working with the existing skills of your internal team to create your software. Outsourced software development involves working with a third-party team that has specialized skills and expertise.
There are pros and cons to both options. When considering the path forward, companies need to consider a number of factors before making a final decision, including communication, time to market, and risk.
There is no one-size-fits-all approach to software development. In most cases, a company’s individual needs will clearly define its exact requirements.
With that in mind, here’s a list of the pros and cons of each option to provide some clarity for businesses making this difficult decision.
The benefits of in-house development
Communication in software development is key. According to a white paper published by cloud application developer OSF Global Services, 70% of all failed outsourcing projects fail due to poor communication.
The internal teams work together on a daily basis. They share the same drive to achieve goals and have a mutual understanding of their company’s vision. Clear communication boosts morale, increases productivity and results in higher quality software.
Additionally, there are usually no major language or cultural barriers to overcome when development is handled in-house.
Unlimited real-time access
Choosing to develop your software in-house gives you the luxury of having a development team on hand whenever you need them. Internal development teams can act immediately. They can make updates quickly, fix bugs as they are discovered, and perform emergency work when needed.
Having a development team on hand at all times can sometimes give management a little more control over a project. They can closely monitor its progress and get it back on track if it goes off course.
Coding according to company standards
Ensuring coding standards are met can be easier with an in-house team. Consistent, quality code is essential for the future life of your product. Each company has its own set of corporate standards that employees are expected to adhere to. Internal development teams are no different, and all team members must follow best practices and comply with all coding regulations.
With an in-house development team, it is easier to regulate the standard of work and provide feedback when expectations are not met. Having more control over the quality of work can help you avoid potential problems down the line.
The disadvantages of in-house development
Lack of skills
Internal development teams are only as strong as the skills they collectively possess. According to Deloitte’s 2016 Global Outsourcing Survey, 31% of companies outsource their development to improve service quality.
Before embarking on a software development project, companies should assess the skills they already have to determine what might be missing. For example, user experience may be a major goal of a project, but the internal team may not have the necessary knowledge. In such cases, outsourcing might be a better option, as companies can access specific expertise and only pay for what they need.
Budget and resources
In-house software development can be tough on a company’s budget. If skills gaps are identified, employees either need to be upskilled, which may involve enrolling in training courses, or hiring new employees to fill the gap. Recruitment is an expensive process, and today’s lack of digital skills means in-demand developers expect to be paid premium rates for their work.
In the United States, for example, a junior Python developer receives an average salary of $87,000, with senior developers being paid almost double on average. And it’s not just the cost of hiring that can get expensive. Annual salaries, benefits, employee pensions, ongoing training, and other overhead all come with the territory when a company has a full-time in-house development team.
The benefits of outsourcing development
Quick to market
One of the major benefits of software outsourcing is the likelihood that projects will be completed and launched within the desired time frame.
It is not uncommon for companies to underestimate the time required to develop a product. Software management company QSM reported that the average development project takes just under 12 months and requires 11,414 hours of work. External development teams are used to working with tight deadlines and have robust processes in place to ensure a seamless workflow.
At BairesDev, for example, our workflow is characterized by a “design thinking” mindset. This approach works well for us as it ensures milestones are met on time. We have a five-step approach to software development: Empathy, Define, Idea, Prototype, and Test. This methodology allows us to execute projects quickly, without compromising on quality.
Reduced project risk
Working with a software outsourcing partner can mitigate risk. Although every development project carries some level of risk, having an experienced outsourcing team can help identify potential pitfalls early on. To minimize issues, most outsourced development teams will have an effective risk management system in place.
As part of our outsourcing service, we carry out feasibility studies to validate ideas and their associated technologies. We provide proof of concept, develop prototypes and ensure that testing is performed at defined times throughout the development lifecycle.
Access to skills and expertise
One of the main benefits of outsourcing is access to a global pool of developing talent. Statista reports that software application development was the most common function outsourced by IT managers worldwide in 2017.
A software outsourcing provider can fill skill gaps and supplement core competencies. External developers provide access to a wide range of expertise that can help turn a specification into reality. Their experience allows them to build products with scalability in mind and implement key features that will serve the product well in the future.
Software outsourcing companies provide access to the best developers in the world. Companies don’t need to compromise on the quality of their product just because they don’t have the in-house skills to manufacture it.
The disadvantages of outsourcing development
Unlike in-house development, time differences sometimes mean outsourced development teams aren’t immediately accessible, which can restrict or limit communication. A good outsourcing company will work from convenient time zones and have clear communication guidelines that outline preferred communication methods and office hours.
For companies that choose to outsource their project overseas, time zone compatibility, language barriers and cultural differences can sometimes be difficult to negotiate.
Companies often have less control over outsourced projects. Outsourcing development requires a certain level of trust and it can be difficult for companies to hand over control to an external team. This is especially true if there are concerns about a partner’s abilities.
Outsourcing can make it harder for companies to check whether a project is on schedule and to verify that the quality of work is up to standard. A good outsourcing team will keep clients informed regularly throughout the development process and provide them with access to project management tools.