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Outsourcing software development services these days has become a norm. Many software development companies started to feel the need for outsourcing due to expensive in-house development, time constraints, lack of domain expertise, lack of experience in complex software development technologies, or shortfall of resources.
Moreover, outsourcing boosts globalization, knowledge spreading, exposure to a qualified team, high-quality solutions, and minimizes infrastructural and technology costs. Still, many companies favor in-house development and criticize the outsourcing model for being risky and nontransparent.
This argument of in-house development and outsourcing is never-ending. However, you can weigh the pros and cons of each model and decide for yourself which suits best to your requirements. So, without further ado, let’s start the comparison of the in-house Vs outsourcing model.
In-house model refers to software development process carried out by employing different teams and expanding technological capabilities. Here, the company recruits software developers to build applications for increased control over the process. This also enables companies to have resources with a comprehensive understanding of corporate culture and manage them more efficiently.
That said, let’s have a look at the advantages of the in-house development model:
Your in-house development team may belong to the same country or city your business is operating in. Thus, the chances are they belong to the same culture and language background, which streamlines face-to-face communication. With fewer boundaries and limitations of cultural differences, your team will have a better understanding of what’s expected of them.
In this model, you won’t have to share your confidential and sensitive information with third-party vendors. Moreover, it allows you to keep the knowledge and insights you have gained through working on different projects within your organization, minimizing the chances of any breach or leak of information.
Another benefit of the in-house development model is your team can master the skills while developing the project. Further, it allows your team the opportunity to gain the highest level of expertise and become seasoned professionals. This means your team has enough resources and skills to keep supporting projects independently.
Let’s see what are the disadvantages of this model:
In-house development is way expensive if there’s no infrastructure and hardware setup available. Companies may have to invest at the initial stage to set everything up even for small and large-scale projects. Other expenses include employee benefits, team management, development ecosystem build-up costs, and others.
The biggest disadvantage of the in-house development model is skilled employees tend to keep changing companies more often. This means you’d have to re-invest in hiring other suitable resources, which slows down the whole software or product launch process.
As hiring good developers is a complicated process and requires you to compete with other companies to offer the best deal and environment, it takes about 30–35 days on average. Even after employing new developers, it would take time for them to adjust to the new company culture to reach high productivity levels for meeting deadlines.
Specific project types may require you to gather specific skilled resources, which naturally isn’t a viable option. Further, as the project unfolds, the need for additional competencies may arise to solve complex technical problems, which may take longer with the existing set of resources. This could lead to additional investment in training those resources in terms of money and time and hurts the project delivery schedule.
All these disadvantages of the in-house development model do not make it worth investing in. Thus, companies looking for alternatives to in-house development would go for an outsourcing model. So, let’s have a look at what outsourcing is along with its pros and cons.
Software outsourcing simply refers to recruiting another company to carry out the development work without you going through the hassle of hiring an in-house team and setting up the whole infrastructure. Outsourcing is perfect for those that need to cut down on expenses and do not have core competencies in software development.
It is not only driven by cost-saving as it offers many other significant advantages too. Let’s have a glance at the pros of outsourcing software development:
Outsourcing gives exposure to an expert team of developers with varied skills across the globe. It opens new doors of opportunity to access qualified professionals to work on your projects and complete them on time for delivery. This boosts the flexibility, efficiency, and performance of your organization.
Another great benefit of this model is accessing top-notch services and high-quality software and product development solutions from niche-specific experts. Software developed from such experts has fewer chances of errors and bugs and will give an edge over your competitors.
While outsourcing to an offshore development company, the time-zone difference can work in your favor. Your extended outsourcing team would work on your projects even when you are fast asleep. However, you may have to face some hurdles initially, but once you overcome those, the work will continue round the clock.
Since you are outsourcing the whole project, you wouldn’t have to worry about recruiting a specialized team in-house, reducing expenses on resources and operation costs. Moreover, offshore outsourcing to countries like India is a great choice to get your software and products developed at cost-effective rates.
Companies having software development as a non-core business aspect can go for the outsourcing model. This allows them to focus on their efforts on core business areas and come up with future strategies to improve the business’s overall strength and performance.
Outsourcing software development model aids your business’ growth. While growing rapidly, you may need to hire more resources, relocate to bigger office space, expenses increase for employee benefits and management. All these could simply be avoided when you hire an experienced and adept outsourcing partner.
Let’s have a glance at the cons of the outsourcing model:
One major concern of companies while outsourcing is the security and confidentiality of their sensitive information. There’s always a risk of your company’s vital information being breached or leaked to rival companies. Such breakouts of information could jeopardize the company’s reputation and they may have to bear hefty monetary penalties.
Your outsourcing partner may have already been catering to other companies at the same time. Thus, they may be unable to give proper attention to your project and its requirements. They may lose complete focus from your project, making you suffer from developmental delays.
Another disadvantage of outsourcing is dissatisfaction with the development services provided by your outsourcing partner. Your outsourcing team may stretch delivery deadlines or provide software products at sub-standard quality. Going through such kinds of experiences makes companies refrain from trying outsourcing.
In conclusion, outsourcing many of the IT business processes along with software development has become a cost-effective alternative in comparison to the in-house development model. On paper, the outsourcing model completely beats the in-house development model. However, many companies are still reluctant to try outsourcing and go for the in-house model.
Based on this comprehensive overview of outsourcing vs in-house development model, you can take your own decision if you should outsource software and product development or not.