Why Outsourcing Is Better Than In-House for Startup

Posted 26/11/21

Table of Contents

Which of you are confused, choosing to outsource or in-house development? If you feel that way, you’ve come to the right place. This article will discuss the differences and when you decide to outsource or in-house development. So don’t make the wrong decision again.

What Is Outsourcing Software Development?

Outsourcing is a practice where you outsource software development to a team outside your organization. Outsourced software development is the same as a custom software development company. Such companies are usually technologists who offer product development and consulting services. Outsourcing saves time and money if you don’t have an in-house specialist in a particular area. However, not only in such situations, it can be a good choice. In the Internet era, finding such an expert was not a problem. Their flexibility and model of working together or expanding their development team is highly desirable.

What Is An In-House Software Development?

Internal development is simply building software with the in-house experts you have in your company. All work is done by your employees without outside help. If you decide to practice this approach without involving other developers or specialists, you have to do the appropriate hiring and create a dedicated development team. This is quite a detailed process and requires proper research and understanding of specific needs. By doing it right, you will get loyal and committed.

Differences Between In-House Vs. Outsource Software Development

Now that we understand the meaning of the two let us know the difference. Here is the categorization of the differences.

Skill On Members

In-house software development has complete control over the development team; it will be easier for you to observe the work progress and supervise the project’s implementation. Moreover, you can train members in any direction you want, in line with your company’s philosophy. However, you don’t spend time preparing your team by choosing to outsource. You greatly accelerate the development process with a group of experts in a given field; you can start working on a project immediately.

Candidate On Teams

An internal team is often more involved than an external contractor. It is because such a team is working on account of the company to which they belong. As a result, the selection of candidates is often more time-consuming. It may extend the recruitment time, but it is more detailed and careful.

Read Also :  Understanding the Fixed-Price Software Development

By employing outsourced software development, you avoid the additional recruitment or personnel processes that usually occur with in-house development. You can add new elements to the developed system at any time. Moreover, by employing trusted specialists, you can count on their experience and efficiency. This significantly shortens the time-to-market.

When Should I Choose the Outsourcing or In-House Software Development?

custom software development company

In-House Team Building

Suppose the digital product you want to build will be your core business. In that case, you’ll need an internal development team sooner or later. This team is always available and understands your company and its culture. Moreover, the internal team will be responsible for maintenance and updates as the product develops. In case of significant changes, it will be supported by a remote team. This solution is cost-effective because you don’t need many monthly programmers working on the application. This way of product development is chosen by the best start-ups, such as Slack, and stable companies wishing to innovate.

According to a report by Glassdoor, hiring a programmer takes about 30 days. This number will likely grow: It’s estimated that in 2020, 1 million programming jobs in the US will be unfilled. The Uber-like mobile application can be prepared in less than 1800 person-hours (not including the servers and web applications). In 30 working days, 4 developers can work up to 840 hours, which means they will develop half the product within a month.

Furthermore, additional time is also needed for a team that has never worked to learn to cooperate. An issue often overlooked when choosing the best solution for our business is the cost of renting a new office space. Then, purchasing the necessary hardware, tools, developer benefits, or managing idle time during project development.

Cooperation With Outsourced Development

However, suppose your team is not sufficient for your product development project. In that case, Outsourcing is the better option if you want to start creating your digital product faster. As Henry 

Ford said:

“If there is something we can’t do more efficiently, cheaper and better than our competition, there is no sense in doing it, and we should employ someone to do the better work for us.” – Henry Ford (who was one of the greatest industrialists in history) –

Choosing an External team is also more efficient. It has an optimal process, which will take a long time for the internal team. The experience of Outsourcing, which has many completed projects behind them, is a huge advantage here. This positively affects the speed of development and the quality of the final product. If quality is important to you, it makes sense to rely on the knowledge and skills of Outsourcing.

Read Also :  How to Manage Offshore Software Development Team

Outsourcing is cheaper than building and maintaining an in-house development team. By outsourcing software development outside your company, you avoid the formalities and additional expenses of hiring programmers full-time. You can also benefit from effective team scaling, which helps you control your budget. If you have customized application software or requests can be done efficiently. Look how outsourcing software development works for your company.

How to Set Up a Cooperation with an Outsourced Development?

nearshore software development

How about now? Interested in outsourcing the team, but I am still confused about how to set it up. Here are tips for you.

Define your Company Goals

When starting cooperation, clearly define what you want to achieve and your needs and expectations. Be ready for questions, and don’t be afraid to ask them yourself. Take care of good communication and proper expression of your requirements.

Also, remember about proper time management and the progress of tasks in the project. You will keep better control over the situation by implementing tools to help observe how work is going. These are, for example, Jira, Asana, or Trello.

Determine Requirements

It would help if you also were clear about your requirements. Think about what services you need, whether it is to build the entire product from scratch, rebuild your existing application, or maybe you want to expand your team. It will depend on which company you should pay attention to.

Decide timeline and process

This will help to set clear standards for project completion and what needs to be accomplished if the project is postponed for whatever reason. It’s essential to consider the processes they will use for quality assurance and monitoring and when they will do it to ensure your product is bug-free and ready to go to market.

Read Also :  Offshore Software Development: Learn More About Indonesian Company

Technologies specialized 

Review to see whether the custom software development company is comfortable with the technology you want to use. If you have not determined on technology yet, try to ensure they have the experience to advise you on what would work best for you.

Do the Right Research

Compare whether your potential business partner’s profile corresponds to your company’s. Do the proper research, check out websites like Clutch.co, Behance, and check out opinions and case studies. 

Rich Portfolio

When deciding to outsource, remember a few basic rules. Start by choosing a suitable subcontractor. Pre-completed projects and a rich portfolio are a guide. It’s great to check a finished product or application on yourself and see its quality, but it’s not a must.

Communication during the project

To maintain productive communication, ask how often you will have meetings with the development team and what communication platforms you will use. Ensure that you are familiar with the project team members and that you interact with them regularly, depending on the project. You will be more informed about the status of your project’s progress, and they will receive positive input as a result.

After Product Launch

Verify whether they can provide ongoing assistance, such as troubleshooting, making necessary improvements, or adding new features if needed. Make sure who owns the intellectual property and other documents you will get after the product has been done.


Your strategy to build a digital product depends on your goals, resources, and priorities. We have outlined the differences between them. Consider your preference — time, quality, price, or communication to make a good choice. Also, you need to consider a development partner who not only gets the job done but also knows your business and makes decisions with your best interests in mind. But carefully with your decision choosing outsourcing software development company. Look how to their solved the problem of clients before.


Don’t forget to share this post!

Subscribe to *

Our Newsletter

Get weekly update about our blogs on your email.

Related Articles