Source:linkedln

In-House vs Outsourcing Software Development

The coronavirus quarantine that has swept the planet has forced almost all companies to switch to new forms of work, regardless of their financial performance and the number of employees. The conditions that could have previously been seen as one of the possible options have become a forced reality.

It turned out that many (and to be precise the vast majority) tasks, including the software development process, can be performed remotely. At the same time, it became obvious that pretentious multi-story offices in prestigious districts do not always pay for themselves. In addition, the numerous teams working in these offices also greatly increase overhead costs, which, as the experience of surviving in quarantine has shown, can be significantly reduced without compromising the result.

Today, there is no doubt that the coronavirus pandemic will not end this year or, most likely, next. Thus, business owners have confronted the same alternative. What is preferable in current conditions: maintaining your developers or looking for a reliable partner in the person of a proven and trustworthy software outsource agency? This question not only has not lost its relevance but, on the contrary, has acquired sharp urgency.

By the way, all that has been said applies not only to employers but also to any software developer who is considering what form of employment is preferable for him: daily 8 hours in the office or remote work found with the help of a software outsourcing agency.

Let’s just take a look at the pros and cons of both models.

The two poles

Exploring two options for organizing the work of your company — the formation of your staff of permanent employees or the transition to the services of an outsourcing company like, for instance, Qarea — please, remember: we are not weighing which of these options is better. Having considered the problem from all sides, you should take into account the strategic goals of your company, its internal ideology, and market positioning.

So, let’s turn to the facts.

In-House Software Development

Source:tms-outsource.com

Pros

  • Full control of the development process at all stages

If your software implies constant adjustments due to frequently changing conditions, you, probably, need regular communication with developers who deeply understand all the nuances of a global task.

  • You can create a team of like-minded people united by a common corporate philosophy

A worthy goal that is by no means unattainable. Such monsters of the IT industry as PayPal, Amazon, SalesForce went exactly this way. If you have the resources to pursue this ambition, get ready to pose for the cover of Forbes.

  • You don’t need to rush to work on an innovative solution that will disrupt the market

Just one example (you can find more if you choose one popular IT company’s Qarea blog). Developing a mobile application similar in functionality to Uber requires at least 1,800 man-hours. Keep in mind that we are not talking about the server-side, a web application for various browsers and post-production service right now. With a minimum development team size of 4 people, this work will take 30 days and 840 hours. Yes, of course, the costs are considerable, but the result is worth it!

Cons

  • Finding highly qualified employees and constantly raising their salaries to keep them from moving to other companies

According to authoritative research, 83% of IT executives complain about problems with hiring employees whose qualifications would correspond to the assigned tasks. As of 2020, there were 1 million software developers vacancies in the United States alone.

  • When recruiting and providing a team of professionals with decent conditions, you must have a sufficiently large portfolio of orders to provide them with a new job at the end of the previous one

Only the organization of such a continuous development process can make your costs economically viable. As noted by experts who have been working in this field for many years, the optimal size of one development team is 5 people. This number includes 1 scrum master, 3 programmers, and 1 product manager. We already wrote above how long it takes to develop one application by one team.

  • Given the extremely high demand for skilled programmers and fierce competition at the salary level, it will not be easy for you to find enough employees living relatively close to your office or ready to relocate

Keep in mind that you will likely need to budget for decent housing and, probably, visas for work in your country and transfer expenditures.

Outsourcing Software Development

Source:tms-outsource.com

Pros

  • Significantly lower team hiring costs

The markets of Eastern Europe and Asia allow you to attract experienced and highly motivated programmers to the development of your projects for a much more affordable reward than in the USA or Western Europe.

  • Limitation of Liability

By signing a contract, thoroughly checked by your lawyers with a reliable software outsource agency, you solve several problems at once. First, you save the hassle of finding and hiring the right people. Secondly, you minimize the risks of claims from the consumer in the event of poor quality work. If you order the application for yourself, you get a warranty against losses if it does not work properly.

  • Getting the desired result on schedule

By concluding an agreement with an outsourcing company, you stipulate exactly when you need to get a ready-made application. Everything else, from the selection of the required number of employees to the administration of the project, falls on the shoulders of your counterparty.

Cons

  • Privacy threat

By entrusting software development to someone else, you inevitably give him access to some part of your sensitive data. Your lawyer will have to work hard to eliminate any risks, prescribing severe penalties in the contract in advance.

  • Lack of constant control over the process

Modern platforms allow you to monitor the development process in real-time. However, if your developers live on different continents, and you are used to controlling every step of your employees, you will have to additionally negotiate certain reference points with the software outsource agency.

  • Difficulties with long-term post-production service

Of course, a development team assembled for a separate project cannot guarantee that your application will be served after it has been accepted by the customer. However, when dealing with large outsourcing agencies , you can always stipulate this aspect in addition.

What should you choose?

Source:computools.com

We started with the fact that the choice depends on many factors, known only to you. However, having studied all the advantages and disadvantages of both models, you may well independently accept either one of them or find a combined option, depending on each specific task.


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