In-house vs. Outsource development comparison

At the beginning of your project, one of the major decisions is whether to develop in house or outsource to a software development service. There are arguments supporting both sides.  In this article we will outline some of the biggest differences between these two, and help you decide what is the right answer for you!

So what exactly is in-house development? You use the term “in-house development” to refer to a project that you, as the business owner, assign to a person or department within the company instead of hiring an outside person, agency or company. In this case, you assign the job to your developer team! In-house development usually utilizes the already existing resources within your company and/ or organization to achieve a goal.

Sounds like you have a lot of power and control over your project, right? That’s correct, one of the biggest pros of in-house development is the control over your project and how to “fit” that project into your company culture. Since you’re the one making the product, you can customize it as much as you want, and since it’s your team who’s making the decisions along the way, they probably share the same cultural/ language background that make it best for understanding what should be done and what has gone wrong. 

As mentioned, since the team making the product is often working together, at the same location, it can make communication much easier. Problems can be resolved quickly, and quality can be controlled. Support will be more straightforward and efficient, and at the same time, you can train your workers so that you have a professional, skillful team to maintain the product independently. 

However, the cons of in-house development are huge! And trust us when we say huge, because it is! First of all, it is very expensive to have in-house development, as the costs come from different sources. It requires a lot of funds to be invested, especially in the initial stages when you and your team do not know the exact direction that you want to take. The cost of hiring is always high, especially right now when the job market is red hot. When doing in-house development, you may worry about an employee leaving or being dismissed, because the money, time and other resources put into training that person will become a waste. You’ll most likely have to spend the same amount of resources, or even higher, to recruit a new one. What a headache! For startups where funds are not available 24/7, in-house development can be a pain.

You also lack talents in several areas – or as we like to call it: skills shortage. In order to apply specific skills, you have to hire a new person, and the loop continues: money spent on training, they might not like your company then leave, and you waste money finding another replacement. 

It also takes a lot of time before your product can be introduced to the market. According to an article in 2019 by QSM, a reputable analytics company, the average development project takes just over 11 months to complete and requires 11,414 hours of effort. Today’s market is extremely competitive, thus companies need to get their products to market as quickly as possible before losing the deals to their competitors. 

Outsourcing, on the other hand, can be a great resource as other companies, or organizations, build your product for you. There are, of course, both pros and cons to be considered.

The first and biggest advantage of outsourcing is the access to worldwide talent. With outsourcing services, your talent pool is never restricted by your location. You can hire people from anywhere in the world to work for you (Example: MobileFolk’s developers are mostly located in Vietnam, while our headquarter is in Toronto, Canada!).  An outsourcing partner can help put together a team with many different skills (mobile development, backend development, frontend development) on short notice much faster than it would take to hire.

More importantly, a good outsourcing partner can help you mitigate the risks associated with your project, such as lack of scalability. For example, at MobileFolk, we take the time to understand your needs and wants, pinpoint any potential problems, and work with you closely throughout the project, thus risks are minimized. You and your outsourcing partner share the project responsibilities and risks!

Finally, an outsourcing partner can provide more flexibility than an in-house team.  If a project is canceled or needs to wind down, has a drastic change in direction, or has a limited scope that will end on a certain date, then it is much easier to make those changes compared to a team of full time employees.

There are undeniably many cons to outsourcing services as well. The biggest, most concerning one has to do with logistics and the logistical challenges. Working with outsourcing companies sometimes means working with teams located in different time zones. Although this does not necessarily slow down the progress, sometimes meetings can be challenging. At MobileFolk, we are lucky to have teams located in Vietnam and Canada, which means our clients have support anytime needed without worrying about the time difference. 

In conclusion, it must be noted that both models have their benefits and drawbacks. The choice depends on the specification of your project. If you’re still unsure about your choice, shoot us a message and we’ll be happy to assist you!