Software Development Dilemma in 2022: Should you go the In-House Route or Outsource?

If you are scrolling through this article, you are probably considering building a software product and contemplating in-house vs. outsourced solutions. You want to build your product quickly, keep the quality high, and bring down the costs – all three things with one approach. So, how do you decide? The solution lies in choosing the right team: let it be that of in-house developers or outsource it to external experts.

Whether one option is superior to the other solely depends on your company’s circumstances. Below, you will find a guide that will help you weigh the most crucial aspects of the decision-making process.

#1 Time Invested to Recruit

Most developers in India have a notice period of at least 60 days before they can switch to another job. For some, the notice period can extend up to 90 days. This means, that from the time you can conduct an interview for an in-house developer to the period of joining could demand approximately 3 to 4 months. Add to this the expenses attached with the recruitment process. On the other hand, it takes about 2 to 4 weeks to find an outsourcing agency, which may minutely vary depending on your engagement and requirements. Time is the biggest expense here, especially if you are running tight on schedule.

#2 Availability and Expertise

The level of competition existing in the software development segment is limitless. The amount of experience each one of them possesses is very subjective. Someone might be an expert quality analyst while the other could be a leading application developer – finding a jack of all trades in the software development industry is rare and practically irrational. When you outsource your requirement to an agency or a team of developers, you gain access to multiple talents with diverse experiences that are not restricted to your country. Companies are also more likely to have higher bandwidth to manage and execute multiple projects at the same time, should you have a larger requirement to be fulfilled in a shortspan.

#3 Onboarding Formalities and Management

When you hire an in-house software developer, the onboarding process along with training draws up a decent amount of time and effort. Though it is very rewarding when it comes to a time-sensitive project to be implemented, every single day counts. However, the bigger advantage here is having a permanent team member to manage the team. Plus, with an in- house member, there won’t be a time-zone difference to experience. In contrast, outsourcing teams do not necessarily have to undergo the onboarding process, they are quick to adapt, independent, and self-organized. But finding a company that treats your requirement like their own and engages equally may take some time. Also, in case of a location difference, time-zone may demand special workflow organization.

#4 Development Fees

In-house development is considerably expensive when compared to outsourcing the process to a reliable, experienced agency. To find an in-house resource means investing time and resources, and paying a monthly salary, regardless of whether your requirement is going to be short-term or long-term. Additionally, there are many other expenses attached to an in- house development member that arise from being an employee, such as office supplies, legal obligations, bonuses, and paid leaves among other things. By outsourcing the project to an external team, you avoid paying all the costs and end up compensating just the service fee after the completion of the task. Any costs incurred above and beyond this would be minimal.

#5 Possibility of Scaling Up

Outsourced teams are easier to scale up or down. Whereas, hiring and firing in-house team members when you no longer need their services or have projects to offer is challenging and threatening to your market reputation. When you have a larger external team handling your requirement, it is practically possible to add a few more experts if you plan to expand a project. The bigger advantage of outsourcing to a software development team is the flexibility of being able to adjust the contract freely. This way, your business can be pivoted with great agility.

The Final Verdict: In-house Development Vs Outsourcing – The Best Option

Both in-house and outsourcing software development have pros and cons. Taking into consideration all the factors, outsourcing your development project is often a wise choice. Taking a final decision also depends on what you want to prioritize: whether you want to focus on building your core business or invest a part of your time in sourcing and managing a team. Our advice is: if your workload fluctuates a lot or is unpredictable, speed is a necessity, you are seeking expertise in the field, and have a limited budget, consider contracting an external provider.

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