In-house vs. outsource: how to make the right choice

It seems like the dilemma between outsource and in-house software development is here to stay. When trying to choose between in-house development and outsourcing one must consider the following: project’s scope, deadline and budget.

Your in-house teams, will have a deeper understanding of your company’s business and product. This is a great advantage and often time saver when dealing with the core technology and the daily operations. But when facing a need for a more specialized skill set for certain projects the in-house team will not have an advantage over an outsource team and sometimes even the opposite. For example when building a mobile app, companies often luck the skill set in-house.

Outsourced tech teams, on the other hand, may lack the firsthand overview of your business. However, they will have a broader view given their experience while serving many different clients. You can often count on the fact that they will come with a range of skills to address your immediate needs.

If you’re a new startup with a great idea and a very limited budget, that needs to reach a milestone in order to go raise money, looking for an outsource development partner to take you safely to this milestone will probably be the best choice. The other option will most likely be beyond your budget and will take longer time. But once you’ve reached that milestone and scored your first significant round of funding, this is the time to take your core development team in-house. So that you and your team will be under one roof, and share the same passion and vision and whenever needed change the direction of the product based on the immediate needs of the business.

But outsourcing is not meant only for startups, also big companies, and often with more emphasize, face situations that outsourcing is not only an option but the only way to go. If we take for example a project that many big companies decided to outsource over the last couple of years because of luck in manpower and expertise is the GDPR compliance. Outsourcing this effort was the right decision rather than hiring and training new people for the job or using existing teams for that.

There are many pros when turning to software outsourcing solutions. Not only would you not have to worry about office space, workstation, necessary hardware and software, but most important you wouldn’t have to worry about hiring a very skilled team of engineers and train them, you can start immediately. Putting together such a team in-house can take months.

Taking the budget issue (and the overheads) of the table, there is no doubt that a highly skilled, trained and experienced in-house team that can handle any project is the best. But the question is how long does it take to get there and whether the alternative or a mix of approaches can get you closer to your business goal in a shorter time and with less efforts.

A combination of an in-house team that handles the core development and is leading a very skilled outsource team that compliments the missing skills and experience, this can be an achievable goal and with reasonable timetable and budget.

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