In-house development vs outsourcing

Outsourcing vs. in-house in software development is a debate that has been going on ever since the market for software was conceived.

In-house development has always been in favor among CEO's. In-house is when you build a team from your employees and assign them to the project. 

The Pros of In-House Production

·       The benefit of in-house production is that you will have your employees on the site; any issue that may arise can be solved on the spot without any delay.

·       You can have face-to-face communication, active project engagement with an in-house production team.

·       The employee you hired has already gone through your training process; that's why they should be capable enough of doing your job correctly.

·       The whole development process is under one organization structure and your control so that guidance, fast team feedback, coordination can be managed easily.

·       Your team members involvement and ability to modify the project will be quick without any language or culture barriers.

·       It may seem that companies outsource only to cut costs, but that’s not the only reason. It has a lot to do with accessing the global talent pool.

The Cons of In-House Production

·       The overall costs of development in business are always going to be higher and in--house production will bring you the hidden costs which you would never have thought of.

·       There will be many expenses, such as paid time off, health insurance, payroll taxes, sick leaves, traveling, and many more other expenses.

·       Scaling will be severe, and letting go of employees may cost you a lot because of long-term contracts and severance packages.

·       Many times the employee you have hired would lack in skills due to location limitations as developers and programmers.

Let's have a look over Companies that do it in-house:

1.    Amazon has in-house employees handle most business processes in order not to reveal any development secrets.

2.    Salesforce is a top-notch CRM system that chose in-house over outsourced software development for its projects.

3.    PayPal makes use of the in-house approach to provide the highest quality products all around the world.

This approach isn’t new to the IT-sphere. Whereas seven years ago, outsourcing was seen as a significant risk; nowadays, it’s a common practice. There are many lists of trusted outsourcing companies, and more companies emerge on the market daily. 

The Pros of Outsourcing

·       Outsourcing will cost you less compared to in-house hired employees, and there will be no expenses will occur, such as employee training, recruitments, & interviews. 

·       There is no need of any bond and commitment because you have been outsourced for some time so that on the bases of performance you can continue with the same employee or else you can find someone else too.

·       There should be an open talent pool and a better chance for you to finding a software house with experience & skills as per your required projects.

·       You will avoid major staffing issues because of no need to hire new employees, which will result in efficient budget planning.

The Cons of Outsourcing

·       Poor communication due to different time zones, business hours, cultural differences, etc.

·       As an outsourcing company, you have to manage different projects at a time with efficient teamwork.

·       Transparency and trust issues potentially created by no in-person communication or nature of a contractor.

·       Further dependence on an outsource agency when you get an unsupported code and can’t maintain it alone.

·       Security and confidentiality risks, as you may have to share some client’s data via online communication channels.

Let's have a look over Companies that outsource:

1.    Slack worked with MetaLab, a design firm based in Canada, to design their web interface.

2.    Alibaba, a global marketplace, couldn’t exist without an outsourced team who takes care of backend development.

3.    Skype and GitHub were two aspiring start-ups that have evolved into successful companies with global outsourced teams.

4.    Google has successfully outsourced small parts of their work to external vendors.

It’s hard to recommend one approach for all cases, as every IT project has its requirements and factors to consider. You can also visit Tips to consider outsourcing your project. Feel free to share your reviews for the same.