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

Every company has two distinct options for software development…

…In-house vs. outsourcing!

But how can you decide which one is right for you?

You can choose the better option by weighing in-house vs. outsourcing pros and cons.

So in this article…we are going to show you the key pros and cons of in-house vs. outsourcing software development…and exactly how to decide which one is right for you!

Here’s the deal:

The software development market is an ever-expanding one with thousands of developers worldwide. More than ever, companies can now hire almost any developer they want – onshore, and offshore.

Interestingly, many companies are getting rid of their in-house team of developers and embracing outsourcing – citing expertise, productivity, convenience, and cost as some of the key reasons for outsourcing.

But there’s a catch!

The decision to outsource or build a team of developers in-house can have a significant effect of your business either now or in the long run.

So what should you expect when you build a team of developers in-house or outsource?

Why Outsource Software Development

Here are the benefits of outsourcing:

Quick access to high-quality talents anywhere

Outsourcing gives you a huge opportunity to hire only the best developers for your job onshore or offshore.

You can research as many IT companies as you want and only reach out to the ones that tick the boxes of services you want.

You’ll get the chance to see their skills, experience and portfolio even before making up your mind to contact them.

In fact, you can build the desired remote team you want within a short period of time and get them up to speed easily.

For instance, when you outsource your custom software development to an IT company like Arkbauer, you’ll get all the support you need regardless of the stage of your software development life cycle – either as a startup or an established company.

Saves time and resources

Outsourcing saves you from countless hours of creating job ads, scheduling interviews, meeting several shortlisted developers face-to-face or via Skype, and bothering about several other things from office space toa cup of coffee.

Hours that are not even part of the software development process, hours that you can easily invest in other aspects of your business.

Also, when you opt for an outsourcing software development company with a strong domain knowledge and experience in your target niche, they will contribute their market-specific capability to save you from tons of tech hiccups down the road.

In order to save you more time and resources when you outsource, we use Agile development methods, which is known to be 3 times more successful at delivering projects within the budget and on scheduled time than traditional methods.

Downsize smartly without leaving a vacuum

We can’t emphasize this enough:

Many companies are offloading their in-house team of developers for a better sustainable work model – outsourcing.

This is a very smart method of downsizing without leaving any talent vacuum. You wouldn’t have to bother about bringing in new talents to replace the ones that have left.

The best part?

You’ll end up slashing off huge overheads and salaries from your budget and become more efficient and productive by outsourcing to highly skilled and experienced experts.

That’s not all!

When you outsource to an IT firm like ours, you’ll not only get the software you want, you’ll also get an analysis of your current business position in order to figure out what can be automated with software solutions to deliver better results.

Why hire employees to perform tasks you can automate with a software?

Hire only the best at the least possible cost

You don’t have to break the bank to build a team of software developers.

Outsourcing allows you to hire only the best for your project without bothering about overheads and the cost of setting up a workstation. This is one of the key reasons why many companies outsource.

With an in-house team, you’ll have to be responsible for a whole lot of overhead costs that could affect your bottom line in the long run.

But when you outsource, you only pay for the services rendered, which are usually cheaper and readily available on demand.

See how our development process works, just so you know you’ll be getting an impeccable software development service when you outsource to us.

Only pay for services, not tools

When you choose to outsource, you no longer have to invest in the several different development tools required to get the job done. Instead, the contractor will provide their own tools, and only deliver the product as requested.

As an example, we do the software development and project management with the latest tools including Docker, Jira,, Balsamiq Mockups, AWL, DigitalOcean, Git VCS and a whole lot more.

Here’s a detailed list of our toolbox.

This means you can sit back, relax and expect only the best when you choose to outsource your software development to us.

Easily change the skill set as the project progresses

Your software or digital product may require a set of several different skills at different stages. Sometimes, these new skills are only temporarily required.

Hiring developers during such periods may slow down the entire project considering how long it takes to find, peruse and hire the right expert for the job.

Once you decide to outsource, you won’t have to bother about bringing a new expert on board on a short notice for a temporary task.

Developers who work for outsourcing companies usually have the skills and experience to handle such temporary tasks. They can get the job done as soon as you expect without the extra costs of hiring a new worker.

Innovate quickly and seamlessly

If you’re looking to thrive in a fast-paced and highly-competitive business environment, your ability to innovate quickly and easily can make or mar your business.

Outsourcing can give you a strong edge with the opportunity to innovate quickly and seamlessly by speeding up your software development without the limitation of the talent or tools you have in-house.

In fact, you wouldn’t have to bother about mastering the new innovation before developing one.

By simply contracting a remote team, your business can deliver innovative solutions that can make you a vibrant leader in your niche or industry.

Get more free time to focus on other aspects of the software

Sometimes, having a great software is not all that matters to make it a successful one.

Other key aspects like marketing, content, client specs, branding, outsmarting competition, maintenance, customer relations and support etc. all play key roles to determine how successful your software will be.

Outsourcing makes it easier for you to get more free time to focus on other aspects of the software other than development.

In fact, you’ll have at least one less thing to worry about when you outsource.

While the developers are working round the clock to deliver the product, your entire company can concentrate on other key things from creating ads, to designing effective marketing strategies and building an effective customer support team etc.

Ease the burden on your in-house team

If you have an in-house team of developers already working on multiple projects simultaneously, you may end up compromising on quality or delaying some projects in order to complete others faster.

If you decide to expand your team by hiring new developers, you may end up spending more time and resources to recruit and train them.

But you can easily ease the burden on your in-house team by outsourcing.

Whatever IT vendor you outsourced will dedicate their time, expertise and resources to deliver what you expect without compromising on quality and time.

Scale your team easily

Outsourcing makes it absolutely easy to scale your team very fast whenever you want.

Unlike having an in-house team where you have to repeat the entire process of hiring all over again before selecting the right expert, you only have to outsource the job to a contractor with the right expertise.

You can have as many highly-skilled software developers as you want within a very short period…by outsourcing to one or more IT vendors with the capability to deliver what you want.

Disadvantages of Outsourcing Software Development

Outsourcing isn’t always a rosy affair.

Here are the downsides of outsourcing software development;

Outsourcing to the wrong company

Sometimes, choosing the right IT company to outsource can be very tricky.

There are hundreds of IT companies onshore and offshore, and choosing which one is worth your time and money may confuse you – especially if you’re outsourcing for the first time.

If you’re not careful enough, you may end up outsourcing your project to the wrong company.

This is why many outsourcing companies display their portfolio and provide references to help you make the right decision.

Short-term commitment

Some outsourcing firms act like a typical one time vendor. Once the outsourced team completes the job and gets paid, they move on to other jobs.

Their commitment to your company and your project only lasts as long as the software development process lasts.

You may have to sign a new contract with the firm you outsourced to, in order to get any additional services.

In-house Software Development

What if you choose to build a team of developers in-house?

Advantages of In-house Software Development

Let’s dig deeper to see the pros of hiring software developers as full-time employees.

A team of experts working towards a common goal

Once you build a team of software developers in-house, you can focus your attention on other aspects of your business.

You will have all your developers in one place – exactly where you need them, right inside your company.

All your developers will have a common goal, all their efforts and expertise will be directed towards the success of your project.

So all your developers will work round the clock, hand-in-hand to deliver what you hired them for.

No external access to your project

Unlike when you outsource, you don’t have to give any access to anyone outside your company, including access to your servers, mobile apps, portals and any other software you’re working on.

Seamless collaboration

Having a team of in-house developer means you can collaborate with your team seamlessly.

You can reach out to your team whenever you want and they can do the same too.

Employers and other employees can deliver information and instructions easily and expect an instant response or as required.

For instance, if you find a bug in your code, it’s easier to easily explain the situation to your in-house team and they can start working towards a solution instantly.

Disadvantages of In-house Software Development

You don’t want to miss these:

The cost of building an in-house team is high

It takes more than one good software developer to have a team. Depending on the size of your project or digital product, you may need at least 3 experts or more on your team to get started.

Most teams usually have at least one of these experts:

  • Android Developer
  • iOS Developer
  • Back-end Developer
  • Designer
  • Project Manager
  • Data Scientist

Here’s the deal:

Once you have these players on your team and you add up their average salaries per annum, you may end up with up to $500,000.

Even if you skip some experts like a data scientist, project manager and designer, you may end up with an average salary of about $300,000 per annum.

That’s not all!

You’ll have to consider these costs as well:

  • Personnel management
  • Office space
  • Licensure (if possible)
  • Training
  • Hiring an IT recruiter
  • Signing bonus
  • Monthly health insurance
  • Dental insurance
  • Payroll taxes
  • Paid sick days and holidays etc.

Bottom line?

Building a team of in-house developers is extremely expensive!

Regular payment without any task

Having an in-house team of software developers means you’ll be paying for hours of work even when they’re just sitting around drinking tea or coffee and discussing the weather.

Full-time developers get paid full-time – even when your company doesn’t have any software development related tasks.

This is a complete waste of resources.

Overhead costs

You’ll also be responsible for significant overheads like training, paid vacations, employment taxes, and acquiring computer equipment for heavy-duty programming, development and designing tools and many more.

With a team of developers in-house, the overhead costs never end!

Scaling your team will be expensive and slow

Unlike outsourcing when you scale by going for the talent you need, scaling a team of developers in-house is expensive and slow.

You’ll have to start the entire recruitment process all over again – right from advertising the job posts, going through CVs, shortlisting and inviting qualified talents to interviews, hiring, and training etc.

The time you’ll spend on recruitment alone, might be enough for an outsourced team to get the job done.


So should you outsource or build a team of software developers in-house?

If you’re planning to develop a software which will require a long-term commitment, you should consider building a team of developers in-house.

But if you’re looking to hire a professional for a limited time and mostly at a reduced cost, outsourcing is the way to go!

So do you prefer outsourcing or building a team? Share your thought and experience with us…or send your questions over.

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