In-House Development vs. Outsourcing: Which One To Choose?
Do you have an important project waiting to be realized?
Do you want to develop a mobile app for your business?
Are you in need of ongoing software development?
The bad news? Finding software development talent is tough. Over 40 million developer positions are waiting to be filled. Even with a projected 22% increase in talent by 2029, the problem will only get worse.
The good news? You’re not without options. Here’s a well-kept secret: some countries have too much IT talent and not enough jobs. They are excellent at producing software developers, but not as good at giving them opportunities.
This is why companies pay outsourced software developers over $430 billion each year; about the size of Argentina’s whole economy. But is outsourcing right for you? And what do you choose when comparing in-house vs outsourcing software development?
As experts in staffing with a proven track record of successful hires, we can help you figure out these strategic approaches, discuss the pros and cons, and give you insights to reach a decision.
What Is In-House Software Development?
How are Facebook, Instagram, TikTok, and other apps and software made? One way to create these programs is through in-house software development.
In-house software development is when your in-house team is in charge of creating software applications or programs. The company hires and manages a dedicated team of developers to work on software projects directly and exclusively.
The average annual pay for this position in the US is $105,047 a year.
But did you know that hiring a remote software developer (basically like in-house) lets you save as much as 80%?
The process of in-house software development
While only 9% of companies consider hiring an in-house team for software development, it is still a strategy you can look into.
Step 1: Planning
The first step is planning your project. Gather a team of talented individuals with different skills. Your team includes software developers, designers, project managers, and quality assurance testers.
Step 2: Design
Your app or software needs a well-thought-out design. Designers can help you create the look and feel of your app, making sure it's user-friendly and visually appealing.
Step 3: Development
This is where the real magic happens. Developers write the code that brings your app to life. They write lines of code to make your app function, ensuring it runs smoothly and without errors.
Step 4: Testing
The software goes through testing to ensure it works correctly. Quality assurance (QA) specialists try out your app, looking for bugs and issues that need fixing.
Step 5: Deployment
Once your app is perfect, it's time to release it to the world. You upload it to app stores like the Apple App Store or Google Play Store so people can download and use it.
Step 6: Maintenance and updates
Your software will need updates to stay current. Your in-house team continues to work on your app, fixing bugs and adding new features.
Now that you know what in-house software development is and how its process goes, you can start evaluating if it’s for you.
The Benefits of In-House Software Development
Why is having your own software development team a smart move?
Better collaboration
When you have an in-house software development team, collaboration becomes a breeze. Your team is right there in the same office or location, making it easy to communicate, share ideas, and work together seamlessly. This means quicker decision-making, faster feedback loops, and more efficient problem-solving.
Imagine you run a small eCommerce company and need to develop a new feature for your website. Your team can sit down together to brainstorm ideas, making sure the feature aligns perfectly with your business goals.
More control
Have direct oversight of the development process, set priorities, and make changes as needed. You can also establish your development methodologies, coding standards, and quality assurance processes.
With an in-house development team, you won’t have to wait for external contractors to respond. This control allows you to adapt quickly to changing market conditions or customer feedback.
Hand-picked development team
When you build your software development team, you can hand-pick your developers based on their skills and expertise. This means you can assemble a team that perfectly matches your project's requirements, ensuring a higher quality of work.
Commitment and focus
Say you’re developing a groundbreaking medical app. Your in-house team will be fully dedicated to creating a safe and effective app since they understand the importance of your mission to improve healthcare.
Your in-house team is committed to your company's success because they are part of it. It also fosters a sense of ownership and pride among the team members, leading to higher motivation and job satisfaction. They share your company's goals and vision and are likelier to go the extra mile. Their dedication and focus can lead to faster project completion and better results.
Agility and flexibility
In-house teams can quickly adapt to changing project requirements or market trends without the complications of negotiating with external contractors. This agility can give you a competitive edge.
While outsourcing software development teams has advantages, in-house development also offers unique benefits. It's worth considering these when deciding which approach is right for your business. Building your in-house software development team might be the key to your company's success.
The Disadvantages of In-House Software Development
Before you dive in, let's talk about some drawbacks you might want to consider.
Expense
In-house software development is like buying a new car. It's expensive! You need to hire and pay full-time developers, buy software licenses, get the latest tech gadgets, and more. The expenses of hiring a local software developer can add up quickly.
Pro-tip: You can more or less lessen these costs when you hire a remote software developer. It’s like adding an in-house staff to your team, minus the additional costs.
Talent shortage
61% of human resource professionals say they have difficulty finding qualified developers and talents to fill vacant positions. It’s like finding a needle in a haystack.
Skilled software developers are in high demand. Even if you find one, you might have to pay a small fortune to keep them around. This talent shortage can slow down your project and cost even more.
Delayed start
According to LinkedIn News, it takes an average of 44 days to hire people in information technology (IT), which is quite understandable given how technical the role can be.
So, consider this factor if you need to hire a software developer for your project. That or your team may have to learn new skills or technologies. Without proper planning, you can’t move forward, causing delays in your project.
Staff churn
People change jobs for better opportunities, more money, or just a change of scenery. When your in-house developers leave, they take their knowledge with them. This "staff churn" can disrupt your projects and cost you more money as you bring in new team members.
Strain on your IT Team
Your IT team already has its hands full. Adding software development to their plate can make their workload overwhelming. They might struggle to keep up with other critical tasks, leading to a decline in overall IT performance.
While in-house software development has its advantages, it's essential to recognize its disadvantages, too. Before choosing this path, carefully weigh these factors against your business's needs and resources.
When To Use Outsourcing?
You already know what outsourcing development is, but when is the right time to use it? Let's break it down in simple terms.
Budget constraint
Imagine this: You have a great project idea, but your budget is limited. You want to keep your costs in check while still getting quality work done. This is when outsourcing companies can be a lifesaver. 59% of businesses view software development outsourcing as a strategy for cost reduction.
Difficulty hiring
An outsourcing partner can be your quick solution. Hiring the right people for a job can be tough. Around 87% of employers struggle to find local talent to build or replenish their IT teams. This difficulty leads them to partner with outsourcing firms for their software projects.
Tight launch deadlines
The perfect time to outsource is when you have a product launch coming up, and your in-house team is already overloaded with work. You don't want to delay the launch, but you need more hands on deck. Outsourcing from software development companies, who already know what they’re doing, can come to your rescue.
Lack of clarity
While human resource (HR) leaders say their top benefit is cost savings, the chief technology officer (CTO) isn’t going after saving money at all. Instead, the priority is to scale fast (42%), followed by saving time when hiring skilled people.
Sometimes, you might have a project idea, but you're unsure how to execute it. You need expertise and guidance. Outsourcing brings in experts who can help you see the way forward.
In a nutshell, these are the advantages of outsourcing. It is like calling in reinforcements when you need them the most. It's not just for big corporations; small businesses and startups can benefit too.
The Best of Both Worlds: Partner With a Remote Staffing Company
Imagine you need skilled professionals for your business, but you don't want the hassle of recruiting, hiring, and managing them in-house. That's where a remote staffing company, like MultiplyMii, comes in. We act as talent scouts, finding the right people to work on your business or project. These people can work for you from a different location, often from around the world.
So, why should you consider partnering with one?
Partnering with a remote staffing company can be the best of both worlds for your business. How? Because at MultiplyMii, we offer remote enablement solutions for a worry-free process. Enjoy services we have designed to help you succeed, like:
Our recruitment experience
Discover top-tier talent with ease. From the discovery call, we'll pair you with a dedicated recruiter who will expertly walk you through our process. But don’t worry! We’ll ensure you have a hands-off recruitment experience yet highly customized to your unique needs.
Payroll and administration
At MultiplyMii, we've got your back regarding your employees' salaries. We promise to ensure payslips are accurate, and we’ll provide prompt assistance if needed. What's even better is that we simplify things for you by turning it all into one straightforward monthly bill, saving you time and hassle.
Talent accelerator program
Receive continuous assistance from our dedicated onboarding specialist. They'll assess your employees' skills, strengths, and areas for improvement. Throughout the 90-day onboarding period, we'll also conduct monthly performance evaluations to support your employees in enhancing their roles.
Hardware acquisition
Benefit from our network of equipment sellers we’re affiliated with and can give us good prices. We can help you find these sellers, ask for prices, and order equipment for you. We can keep an eye on these orders and make sure they get to your successful hires. And if someone leaves your company, we can redeem these items for you, too.
Want the best of both worlds? Hire top tech talent without the hassle! Consider partnering with a remote staffing company to help you with your software development efforts.
With MultiplyMii, beat the tech talent shortage without breaking a sweat.
Say goodbye to the headaches of hiring and hello to a team of skilled developers ready to fuel your software development dreams.
Experience cost savings, global talent access, and the luxury of a streamlined process.
Don't let talent slip through your fingers – partner with us today!
Book a discovery call to get started.
