In-house development or outsourcing: The best development route for your next software vision

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So, the company you work for is transforming its latest software dream into a reality? In today’s world, software development is occurring at increasingly rapid rates. Hence, you’ll need the best possible quality of work to keep up with fast-paced competition, and naturally, quality of work depends on the right people. Employing the wrong people and the wrong project management methodology can very quickly turn a once-thrilling prospect into a disaster. In this situation, many organisations would choose a high quality in-house team for development. However, at the same time, outsourcing is becoming an increasingly significant option, but is it right for your business?  

Either way, here you’ll find the pros and cons of both, to help your company reach the most informed decision for its situation. 

Why In-House Development?  

The Benefits  

Your first option is in-house development. In this case, the development of your product may seem simpler, because you’re not conveying your concept to a third party. When both the vision and the development take place within the same office, the reaction time during crises is faster and the process is kept under close supervision the whole time. You can choose both the technology and methodology, and know that your colleagues have a firm understanding of what your company wants to achieve. The project team will likely sit close to where the idea has been conceived. That has to be a big bonus.  

The Challenges  

However, aside from the possible limit on fresh ideas to the business, there are other risks to this approach. Firstly, hiring specialists for the in-house team is rarely cheap or efficient, especially when your vision requires a myriad of different skills. If a specialist cannot be found, additional training is necessary for your employees, as well as significant investment in licenses, hardware, and equipment. In-house projects will certainly appear cheaper at first, but in the long-run, the financial restraint will be burdensome.  

Furthermore, when thinking in the long term, in-house development may face a major risk of oversight. Vital aspects of development could be alien to your team, leading to later problems. For example, before embarking on development, teams should undertake a design and analysis stage. If conducted by specialists in Analysis and Design, findings and conclusions will likely conclude in a well-suited software solution without the risk of oversight. 

Why Outsourcing?  

The Benefits  

The key appeal with outsourcing, is that your company will have the freedom to choose an outsourcing company that creates products of the highest quality, and to cherry pick the skills it needs from its new partner. Outsourcing companies will compete to offer the lowest price, while simultaneously offering the highest quality because they specialise in a very particular area. Experts exist in almost every field imaginable, and your company won’t be tied down by contracts with partners who don’t necessarily match your needs.     

If consistent communication is essential for your product development, then nearshoring enables office visits to be far more easily coordinated since the two organisations are in similar time zones. Additionally with nearshoring, the more you share a culture and work ethic with your partner country, the fewer times you’re likely to run into cultural barriers, as well as moments of misunderstanding. 

The Challenges  

While this may seem like a mistake that is simple to avoid, it’s worth remembering that problems with outsourcing occur when a company doesn’t adequately research the brand and service quality offered by the outsourcing company. This can be avoided if you check for case studies, ask for references from previous clients, check if ISO standards are in place, and look for partnerships that they may have with major player organisations.  

Another problem is distance. However, even though working with an international client may seem unnerving at first, mostly due to the unlikelihood of them being able to pop into the office for meetings, technology such as videoconferencing and instant messaging easily turns this once impossible process into a (for the most part) piece of cake. And if you’d naturally connect with your in-house team via email, then connecting to an international team via email is surely going to make very little difference.  

Software development with outsourcing can easily end up being far more unpredictable than initially anticipated (especially if your development team is unfamiliar with your core business vision and direction or the project is a long process). Although this can also be daunting, this danger can be easily avoided if the right kind of contract is sealed. With fixed costs, frequent communication and commitment to your vision, you can afford to relax.  

It also goes without saying, if you are choosing an outsourcing company, you should prepare an NDA. This will prevent your vendor from exposing sensitive information that may harm to your business. 

Ultimately…  

Outsourcing and in-house development are faced with a similar amount of benefits and risk. However, regardless of this, your first question - ‘who are the right people?’, is primarily dependent on two variables: the expertise of your developers, IT project managers and other experts, and their accessibility. This combination is difficult to find, but you’re far more likely to find it through nearshoring than through any other means. A great idea, clear brief and time frames, regular and easy contact will ensure the consistency of a product that is moulded your way with the right outcome.   

Keeping an audit trail of the project in terms of its success and hurdles along the way will help you decide the right route for your next project and ensure lessons are learned at every stage, from selection to completion. 

Jaroslaw Czaja, Founder and CEO of Future Processing 

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