Creating a new software development project for your company can be a complex and often frustrating task. Especially if you're a small or medium-sized business, there are many things you have to consider beforehand and a few things you can afford to go wrong. To succeed, you need to invest in the appropriate resources, arrange your schedule efficiently, and, of course, stay within your budget.

There's been an ongoing debate within the software development industry for over ten years now regarding which is the best choice to build your own project. Building an in-house team or hiring an outsource agency? Making the right choice is essential for your project's success, and before you select, you should know exactly what to expect in either case. In this article, you'll see the key advantages and disadvantages of both in-house and outsourcing so you can decide which is more suitable for your needs.

In-House Tech Teams

To begin with, let's summarize what the in-house software development model entails.

In-house involves:

  • Building a team of people responsible for designing.
  • Developing.
  • Maintaining your website or mobile application.

Your company may already employ these experts, or if not, you can hire them one by one through recruitment processes.

Advantages of an In-House Team

Communication

One of the key advantages of having an in-house team is direct communication. You can make changes to your project more quickly, reduce misunderstanding errors, and resolve any concerns faster. Of course, with the increased popularity of remote working, the value of this advantage has become less significant.

Better Team Control

Assuming your team works in the same office or has established a good level of remote communication, monitoring work progress and managing the complete development process is more straightforward. Additionally, you can offer guidelines to your employees that'll make sure they're consistent with your company's values.

Commitment

Having full-time employees ensures that they will be solely focused on the needs of your project and the company in general. Most companies aim to create a friendly work environment that'll make employees happy and go the extra mile. Especially in startups, team members are even offered equity as an incentive to add a level of dedication.

Disadvantages of an In-House Team

High Overall Costs

It can be far more expensive and time-consuming to recruit, hire, onboard, and train an in-house software development team than build a remote team. Besides high salaries, especially if you need to hire employees with in-demand skills, there are also secondary costs like pension plans, bonuses, vacations, workspace and hardware expenses, etc., that add up to a substantial amount of money.

Lack of Specialized Skills

Companies often choose to outsource their development due to a lack of skills within the company. Most software products require highly-skilled people who can develop specialized products with cutting-edge technology. If your team members don't have the necessary skills, you can train them or hire a new member. You'll need to invest valuable resources in both cases because finding specialized professionals from your local area with a salary you can afford can be a challenge. Before you start a new project, you should fully understand the strengths and weaknesses of your team and plan ahead.

Time-consuming Process

To hire in-house members, you have to create a job description, interview candidates, make an offer, wait for the new hire to join the company, etc. Clearly, this is a time-consuming task that can even take 60 days for new IT/technology hires. A long process can drain your resources and weaken your competitive advantage.

Outsourcing Tech Teams

Outsourcing software development means that you hire an external individual, a team of individuals, or an agency that will create your development projects for you. You can outsource web and mobile development projects, UX/UI design, or other types of technical work.

Advantages of Outsourcing 

Fast Launch Times

A significant advantage of outsourcing is that it significantly reduces the time needed to complete a project. Outsourcing your technical needs allows you to start working on your product almost immediately - when building an in-house team and starting the actual project can take two months or even more. An outsource partner will remove the grunt work from your shoulders and speed up your project's launch.

Accessing Talent

Building an in-house team with talent coming from your local area is challenging. If your office is located in an area with limited talent options, finding good developers won't be easy. Relocating talent has many objective difficulties in addition to increasing the overall cost. Outsourcing extends your talent pool beyond the geographical boundaries of your area. You can access professionals from all over the world, and you can benefit from the variety of specialized skills you can find. Besides human resources, with outsourcing, you have access to a broader range of technologies you can choose from to address all of your project's needs.

Flexibility

Often, full-time in-house employees can cost less than contractors or agencies. This is probably generally true, but you should take into account how many team members are actually necessary on a full-time basis. In general terms, not all roles are required at every phase of the software life cycle. Therefore, having the flexibility to adapt your team based on your needs is a big advantage that outsourcing can offer. With an in-house team, your expenses are fixed even when work slows down and your budget changes. On the other hand, outsourcing allows you to allocate resources based on your requirements.

Cost-Effective

Working with an outsourced agency can save you a lot of money in the long run. They will provide all the necessary resources so that you don't have to worry about investing in expensive equipment, office costs, or other expenses associated with full-time employment.

Disadvantages of Outsourcing

Indeed, outsourcing has disadvantages, but they can be reduced if you choose the right partners.

Minimum Control

As mentioned above, one of the benefits of having an in-house development team is better control. Monitoring and controlling an outsourced team, on the other hand, isn't always possible. In most cases, all your information about the project's progress comes from a representative of the agency you are working with. If you arrange and maintain clear communication channels, the problem is mitigated, but you still can't directly supervise the work process.

Communication Issues

A lack of personal interaction can lead to misunderstandings about the project's requirements and various other misconceptions. Although modern ways of asynchronous and synchronous communication have evolved, direct in-person interaction is more effective in many cases.

Transparency Issues

There can be accountability and transparency issues when working with an outsourcing team since you don't have a local physical presence to work with. There needs to be mutual trust so you can ensure that your sensitive data and project, in general, will be safe. Carefully selecting your partners can reduce your concerns.

Outsourcing or In-House?

Working with an outsourcing company is the best option for developing your product right away and significantly reducing the time to market ratio. You don't have to be concerned with finding employees, onboarding, and training them because they have already done the heavy work for you. Outsourcing agencies have gained hands-on experience through multiple projects and have developed efficient processes that take time to optimize. These ensure not only fast development but also a quality result. Without a doubt, you will benefit from an outsourced team that has the necessary skills and knowledge.

Furthermore, outsourcing is cost-effective. Since you don't have to hire and maintain an in-house team, you avoid all the expenses that come with having full-time employees, and you significantly reduce overhead costs. Additionally, you can easily scale your team to match your needs and budget.

One thing to always keep in mind is that not all outsourcing options have the same caliber. Your selection process should be thorough before choosing an outsource partner, as your project's success may depend on them. Before you begin, consider the services you require, as it will determine the type of choice you're looking for. Then, do your research, search through various rating and review platforms, read testimonials, etc. From there, you should examine portfolios with completed projects, see if the work quality is up to your standards and determine if there's a fit.

When you select an outsourcing partner, you should clearly communicate your goals. Tell them upfront what your expectations are and how you imagine the collaboration moving forward. Lastly, keep in mind that time is of the essence, so establish a clear timeline for every project step. At Solwey, work starts as soon as the client gives the green light, often only days after they've even realized they had a technical need.

Do not wait two months to start if your company needs full-stack web development, mobile development, e-commerce solutions, UX/UI design, or other technical needs. With our efficient and comprehensive process, you'll be ready to launch your project in no time. Get started immediately by scheduling a call.

We look forward to hearing from you soon.