Every company is looking to optimize its productivity, profit, and performance. Software is one way all the three mentioned metrics can be enhanced without a lot of expenditure. 

But where most top-level decision-makers are stuck is how to get the software developed? Should they hire an in-house team or outsource the entire project to an offshore software development agency? 

Today we try to solve this everlasting dilemma.  

We will discuss the pros and cons of both approaches to help you make a more confident and correct decision.  

Let's quickly see what in-house and offshore development are?

What is in-house software development?

When the required software is developed using company resources is generally termed as in-house software development.  

For companies whose core expertise in software development, in-house development is a great fit. They already have the required human power, skills, technical infrastructure, and resources to develop software on their own.  

But for other businesses and enterprises, it is a long process involving hiring the right developers, setting up the infrastructure, and creating a strong foundation to develop good quality software.

What is software outsourcing? 

In simplest terms, outsourcing is when a company hires another agency or offshore company to build their software for them. It is an agreement between the external vendor to complete the work despite in-house development.

This business practice is most appropriate for nontech companies where no IT department or IT is busy with other core business operations.

It saves a lot of initial time and capital from hiring employees and buying technical resources.

Virtues of in house development 

• A dedicated development team 
• Constant face to face communication  
• No language or cultural gap  
• No time difference  
• Complete control over quality with development, maintenance, and internal support 
• A grittier understanding of IT business culture and processes 

Vices of hiring an in-house development team  

• Increased cost (salaries, yearly raises, insurances, benefits, etc.) 
• Lack of worldwide skills and talent 
• High initial expenses of setting up the technical infrastructure 
• Lesser number of hours of work 
• Employees can leave anytime, hampering the whole development process. 

Merits of outsourcing software development  

• 3x-5x cost savings 
• Access to world-class talent  
• Latest technology  
• The expertise of a particular technology  
• Lesser time to market 
• A solid strategy for the development process 
• No complication of hiring developers 
• Lower risk 
• A fresh perspective  

Demerits of outsourcing software development  

• Loss of control over the development process 
• Time and language differences 
• Security of Intellectual property  
• Reduced Communication and management  

Now let's explore and compare the approaches in detail.  

In-house software development  

For tech companies and startups with in-house software teams, in-house development is the best route. There is nothing more suited. But before concluding too fast that this is the way to go, you must consider that it is a lengthy process.  

Imagine you own a booming e-commerce startup where there is a need to evaluate the performance and efficiency of your customer care executives. Software is the way to go. So now the business analyst maps out the requirements. As you know how software development works, you need to gather a team of software developers, designers, testers, and project managers to complete the task.  

And here is the glitch. You need to hire a development team for the project, which will take a few months.  

As mentioned earlier, there are the added advantages of hiring an in-house team as well.  

So we will move on to the crucial part - cost. Because no matter how big a company is, the cost of any project or process counts the most.  

Along with hiring an in-house team, the cost your business/startup undertake: 

1. Salaries  
2. Yearly bonuses 
3. Computers and other IT infrastructure 
4. Working spaces  
5. Taxes  
6. Training costs 

Also, for western countries, the cost of employing web developers is much higher than for offshore developers.  

To wrap up: hiring an in-house team is very expensive.  

Software development outsourcing  

In today's world, where companies are looking to innovate, software development is a great way to compete. You can work with globally certified developers and hire whoever you want. 

There might be some obstacles while you're starting to find the right company. You need to learn about their culture, development process, experience, etc. There is always the concern for Communication and management, which are vital for the success of any software development project.

All the troubles are until you find the right offshore software development company. The time and price are significantly reduced as compared to in-house development. It also means you can set the deadlines for faster time to market as dedicated developers are working on your project.

Although all of this will be in vain if you end up hiring the wrong software development company, you might waste a lot of time explaining your requirements and business plans and get stuck with incompetent engineers and low-quality software.  

A bigger threat is the loss of information to a third party as you will share your intellectual idea and property with the offshore vendor. In any scenario, don't forget to get an NDA signed by the software agency.  

With the correct attitude and hiring process, you can find a custom software development company that is the best fit for your business partner. It will take some time initially to know the people who run the company and how well trained the employees are, but it will still be less from months of hiring a whole team of competent software developers.  

Summary  

When done strategically, outsourcing can turn massive benefits for enterprises. Outsourcing activities that are not your core expertise will gain a competitive advantage in the market and help your business grow exponentially.  

Ensure you hire the best developers from a trusted custom software development company and lock your business success.