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In-House vs. Outsourcing Software Development: Pros and Cons

Blog: Comidor Blog

For the majority of modern businesses, using someone else’s platform is not good enough. Ideally, they want to develop a software platform of their own that they can adjust to their own customers and business needs. Software customization is the name of the game in 2024, and there are two ways to approach this:

You build your software on your own.
Hire someone to do it for you

Like always in the business world, there’s no such thing as a superior or inferior solution. To understand what each of these decisions brings, here are some pros and cons of in-house vs. outsourcing software development.

In-house Software Development

A lot of entrepreneurs value self-reliance above everything else. This is why they’re so invested in the idea of handling things in-house. In their mind, if you want something to be done right, you do it yourself.

While outsourcing is definitely the way the modern business world works, for people who prefer in-house software development, this is nothing more than a temporary solution. Why is this the case? Well, to understand this, you have to dive a bit deeper into the benefits and downsides of in-house software development. Here are some of the most prominent of these pros and cons.

Advantages of in-house software development

Direct control: The single biggest advantage of in-house software development is the fact that you’re directly supervising the entire process. This gives you more control to tweak various features and even control the pace at which the product is developed.
Close collaboration: When everything is done in-house, collaboration is tighter, and communication is more reliable. This means that separate teams all work toward the same goal. For instance, your marketing team knows which features to advertise, and your customer service knows who to contact when there’s a problem.
Tighter security: Some of the info involved in development is particularly sensitive, which is why you don’t want to risk people who haven’t undergone your own vetting process having access to these files.
Risk mitigation: When handling the project on your own, it’s much easier to mitigate challenges and ensure project success. Still, this will definitely take extra skill and effort.

Disadvantages of in-house software development

Self-reliance: The biggest disadvantage of in-house software development is that you have to do it all on your own. You need to decide on teams, supervise them, and, in some scenarios, even micro-manage them.

Higher costs: In order to create a development team, you need to hire specialists. This hiring process is already quite expensive, but you also have to wait until they become a real team, provide them with all the equipment, and assign an executive to supervise them. Upfront costs are quite high, and it pays off only if you have huge long-term plans.

Occupying your time and attention: Whenever you have to handle things that are not in your area of expertise, you’ll spend a disproportionally long time doing research. You’ll also stress yourself out and diminish your productivity on other tasks. Micromanaging is always a massive drain on your energy and resources.

Overall, in-house development gives you more control but takes more time, attention, energy, and money. Is it worth it? You’re the only one who can answer that question since it’s nearly impossible to quantify the value of direct control.

Leveraging Low-Code Platforms in In-House Software Development

In the realm of in-house software development, the emergence of low-code platforms has introduced a compelling solution to streamline and expedite the development process. Low-code platforms empower businesses to create applications with minimal manual coding, significantly reducing the reliance on traditional programming methods. Incorporating low-code platforms into the in-house development process brings forth several notable benefits, including acceleration in development cycles, enhanced business agility cost efficiency, and collaboration among cross-functional teams by providing a centralized environment for ideation, development, and deployment. What’s more, low-code platforms democratize the software development process by empowering non-technical users, often referred to as citizen developers, to create and customize applications.

By harnessing the power of low-code development, organizations can unlock unprecedented levels of efficiency, agility, and innovation, driving digital transformation and gaining a competitive advantage in today’s rapidly evolving landscape. Platforms like Comidor further amplify these benefits by offering a comprehensive suite of low-code development tools and capabilities, empowering businesses to rapidly build, deploy, and iterate on custom applications to meet their evolving needs.

Outsourcing Software Development

Outsourcing software development usually means finding a specialized agency and entrusting them with the task of creating an app or a platform for your company. While this gives you less direct control over the development, it will usually lead to a superior end product, deliver it quicker, and allow you to focus on this task.

It’s also worth mentioning that software development is one of the most outsourced tasks. People prefer to find customer service specialists, an HR agency, and a B2B marketing company to outsource, which allows them and their in-house team to focus on core tasks – those that are generating revenue.

With that in mind, here are some advantages and disadvantages of outsourcing software development.

Advantages of outsourcing software development

The advantages of outsourcing software development are quite numerous, which is the main reason why so many people opt for this development route. Some of the most important advantages are:

Cost savings: By outsourcing, you have an easy job outsourcing to a region with a much cheaper qualified workforce. You see, coding and development are universal languages, and just because a developer may not be a native English speaker, this doesn’t mean that their competence is brought into question.
More choice: There’s a reason why having the ability to choose globally is so advantageous for enterprises all over the globe. First of all, you get to see all your options, which means that you’ll have the privilege of making a better-informed choice. Second, you get the availability of global talent, which means that you get much better offers.
Specialized focus: While you may have a department in your enterprise that specializes in development, the cost of setting it up and the time until they get enough experience will be too difficult to manage. This way, you just outsource these specialized tasks straight to industry veterans.
Faster time to market: As we’ve already mentioned, even if you did this in-house, it would take you a lot longer to complete the task. Not to mention that this would distract you from your regular tasks, making you less efficient in these fields.

Overall, outsourcing saves time and money, as well as allows you to direct all your attention toward core (money-making) tasks instead of having your attention scattered all over the place.

Disadvantages of outsourcing software development

While outsourcing deals should be fairly straightforward, it’s not without its uncertainties and challenges. Here are some disadvantages of outsourcing your software development.

Hidden costs: Sometimes, when you’re offshoring, you may face different challenges caused by language and cultural barriers. This may lead to miscommunication and hidden costs, which can be quite significant and cause you a sizable setback.
Lack of in-depth understanding of your business: Your software developer is an outside entity, which means that their understanding of your industry may be limited. However, this challenge is not exclusive to software development – it’s a challenge that everyone you outsource to, from marketing to HR will have to deal with.
Lack of adequate supervision: When hiring outsiders, chances are that you’ll only sporadically read reports and have limited insight into what’s going on. Now, some businesses outsource to get faster time to market but what this may cause is a compromised quality of the product.
Dependency on a third party: Sure, this one may be a bit controversial, but you can “coerce” your team into working faster. You can only plead with the outsiders. No matter what the contract states, it’s up to them whether they’ll follow your suggestions.

Some of these challenges are quite significant, but others can be solved quite easily.

Wrap up

Ultimately, it’s nearly impossible for anyone outside of the project to determine what’s better: in-house vs outsourcing software development. Just keep in mind that some of the smaller teams don’t even have the option of doing things in-house, which means that they can either outsource or abandon the idea of developing their own platform.

Still, if there is the right answer, it’s important to analyze all your options and carefully evaluate every factor before making a decision.

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