In-house vs. Outsourced: Pros, Cons, and When to Use Both

In-house vs. outsourced, is a debate that has been going on for a long time.

The global IT outsourcing market is valued at around $261.9 billion with total spending reaching $1.2 trillion worldwide. Companies like Genpact, Cognizant, Infosys, and TCL leading the market.

On the other hand, in-house is the ever-reliable option used by some of the largest companies in the world across all industries.

So, which one should you choose, outsourcing or in-house?

If you are bothered by the same question, this blog is for you. Here, we shall be comparing both of these platforms head to head. By the end, you will find the best option for your outsourcing options.

With this being said, let’s get right into it:

In-House Vs. Outsourced: What Are They?

Small business owners and the CEOs of large business has been scratching their heading confused, about whether to build an in-house team or Hire Dedicated Developers.

In-house vs. Outsourced are two ends of the same stick. Both of the options are very popular in IT and other tech-related industries.

But to understand the differences between these two concepts, one must first understand what they are. Therefore, we shall be going through in-house vs outsource analysis and discussing what they are.

What is In House Software Development?

Every company has its own development needs. It can range from software development to mobile app and web development.

To meet this demand, a company hires its own team of dedicated developers and designers who works as employees in-house.

What makes it different from other options like freelancers or part-time developers is that, here, the team is working for the company as their employee. Thus, the company needs to provide all the resources and infrastructure required for the development.

This is the basic definition of in-house software development. And there are many benefits of developing software in-house, but we shall be going through them later down the line.

What is IT Outsourcing?

IT Outsourcing is a Megatrend.

For instance, more than 30%  of US-based companies outsource at least one function. Plus, more than 55% companies improved their productivity with productivity.

In fact, some of the largest companies including Apple outsource a part of their work. But what are Outsourced services?

Well, when a company reaches out to another Outsourcing Firm to handle their work, it’s known as outsourcing. Outsourcing companies specialize in specific tasks like app development, web development, PWA Development, and so on.

There are various types of Outsourcing as shown below:

• Offshore IT outsourcing
• Near shore IT outsourcing
• Onshoring/ homeshoring IT outsourcing

Both of these concepts have their own advantages and disadvantages of their own. And the same also plays a role in helping clients between them. Therefore, we shall be going through just that in the next section of the blog.

In House Vs Outsourcing Pros And Cons

Both in-house outsourcing have their own benefits and shortcoming.

Here, we shall be discussing difference between in house and outsourcing in detail. Therefore, let’s get right into it:

Advantages of IT Outsourcing

IT outsourcing is an option that even Fortune 500 companies resort to. Thus, it goes without saying, this option offers some good advantages.

The top advantages of IT outsourcing are, as mentioned below:

• Budget Friendly

Outsourcing is a budget-friendly option. The cost to develop mobile app or software is often minimal with an offshore or even near Shore Company.

The reason behind this is that the outsourcing company has expertise and experience in their craft as well as the required resources. Since everything is maintained by the development company, the total cost is reduced.

• Flexibility

Another big advantage that gives this one the upper hand in, In-house vs. Outsourced debate is flexibility.

The services offered by outsourcing companies are scalable. This provides flexibility to both development and team selection.

Speaking of team selection, this brings us to the next point…

• Access To Global Talents

Well, the world of Technology is filled with top talents and the smartest minds of our time. And getting access to them isn’t all that easy. Unless businesses are outsourcing services.

So, there are a lot of companies offering these services. They have a large team of developers who have years’ worth of experience as well as expert-level skills. This is one of the top reasons to choose this option for web development services.

• Fast Time-To-Market

Mobile app development is notorious for being long (when you are working with the wrong developers). However, with an outsourcing firm by your side, the app development time is minimal.

Fast time to market is one of the advantages.

• Reduced Responsibility

Developing software, app, or even website, can be a lot of work.

Outsourcing in IT allows businesses to transfer the entire project as well as the responsibility to the firms. They don’t need to worry about anything.

Disadvantages of Outsourced Services

As good of an option as IT outsourcing is, it still comes with its own disadvantages. And in this section of the blog, we shall be going through the same.

• Limited Control in Outsourced IT Services

Since the work is being outsourced and the development team is in a different location than the business. Therefore, the business has limited control over the development team.

• Cultural Gap

Well, sometimes when outsourcing to Asian or Middle-Eastern locations, there can a cultural gap. This can lead to issues in the understanding of concepts. That’s why home shore outsourcing is recommended.

Advantages of in-house Developed Software

In-house, though not as widespread as its counterpart, is still a popular option. And there are various advantages of developing software in-house.

• Dedicated Approach

One of the big advantages of an in-house team is, the team is dedicated to the cause.

The team stays in-house and dedicated all of their time as well as effort to the businesses’ own projects. This also results in better results.

• Better Insight

Insight is important in both in house IT vs outsourcing. And sometimes clients look for when they want to develop a mobile app.

You see, business wants to know how their project is going on. What better to gain insight than having an in-house team? Both client and team are in the same locations which makes it easier to communicate.

This is one of the big reasons why people choose this option.

• Better Management

Another benefit of being in the same location is that in-house teams are easier to manage.

The business has absolute control over the development process as well as the team. These results in satisfactory and desired results as well as a lot more experimentation.

Disadvantages of In-House

When comparing in house vs outsourcing pros and cons, there are some cons a well. Therefore, these are, as mentioned below:

• Higher Cost in In-house system development

Well, well, well, hiring a developer is one thing, and hiring an entire team of developers in house is another. And the latter one is incredibly expensive.

The cost to hire developer in house becomes a lot more considering the fact that you have to provide them a full salary as well as other benefits.

• Possible Lack of Skill

Another con of the option is that teams often suffer from a lack of skills. While IT staff augmentation comes in handy here, it is still a disadvantage.

 So, these are the advantages and disadvantages of in house outsourcing. And with this out of the way, we shall be looking at services in the next section of the blog.

Difference Between In House And Outsourcing Services

In House and Outsourcings are very different.

While in house team is established within the company itself, providing all the advantages to the employees. Outsourcing is more like handing over the work to someone else, overall cheaper option.

Usually, any operations can be done either in house or outsourced. But some functions are better done one way than the other.

In this section of the blog, we shall be discussing in house IT vs outsourcing use cases and services.

What You Should Outsource To Outsourcing Companies?

There are Trends In IT Outsourcing that makes it a much more desirable option. It is suitable for a lot of different business processes.

Some of the business processes that you should consider outsourcing are, as mentioned below:

• Mobile App Development

Mobile apps are popular. And in case you want to develop one, it is highly recommended that you outsource it to a firm.

This is the most common practice in mobile app development.  And there is almost surety of gaining satisfactory results.

• Custom Software Development

Well, it is a good idea to outsource your software development project to a software development company.

Outsourcing companies are known for their custom software development services. And the cost of operation is also minimal here. This makes it an attractive opportunity.

• Web Development outsourced IT services

Some of the best web development companies in the United States of America and the entire world are outsourcing companies.

Therefore, there is no room for in house vs. outsourced debate. This is one of the reasons behind the massive popularity of IT Outsourced Services.

• Cloud – SaaS Development

In industry 4.0, cloud computing is a megatrend. And outsourcing companies have expertise in SaaS app development.

With the right SaaS solution, it is possible to generate not thousands but millions of dollars. You can find many in-house vs outsourcing examples for the same. In any case, this is an option that you should consider.

Moving on, let’s look at some of the business processes that should be done in house in the next section.

In-House Development & Other functions

In-house might not be as popular as outsourcing which makes in-house vs. outsourced kind of an unfair debate. But it’s still a popular option.

This is something that most larger companies who have enough funds to manage their own in-house team and gain from it opt for.

Meta, Google, etc have their own team of developers in-house throughout the world. Moving on, let’s look at the business processes that are better-done house, these are, as mentioned below:

• In-house Software Development

There are certain advantages of in house developed software. For instance, in-house developed software is much more suited for the task as they are developed based on the needs.

After all, who understands the needs of the company better than the in house team?

• Marketing

Marketing whether it is digital or traditional should be done in-house.

While it is true that a lot of companies outsource their digital marketing work, it is also true that it is expensive and not always effective.

• Content

Content development and creation is yet another task that is better done in house. The reason is that in-house team of content creators connects way better with the rest of the team.

Therefore, the content being created is much better and desirable.

These are some of the business process outsourcing and in-house. Now, if you are confused about whether to go with in house or outsourcing, let’s discuss that in the next section of the blog.

In House Versus Outsourcing: How To Choose The Right One?

With today’s competitive market, in-house software development comes nowhere near outsourcing options. And the reason behind this is clear.

Outsourcing is cheaper, faster, more flexible, accessible, and just that much better. This is one of the reasons why some of the best companies in the world include Nike, Adidas, Apple, Samsung, and so on.

There are many IT Outsourcing Companies known throughout the world and especially popular in the United States of America. This includes the likes of:

Now, the real question is how to do choose the right software, web, or mobile app development services when opting for outsourcing.

There are some steps you can follow to find the best outsourced IT services. These are:

1. Conduct a Business Requirement Audit
2. Make Criteria based on Requirements
3. Narrow down the choices
4. Explore Options and Cross-check their claims
5. Setup a test project
6. Assess Results
7. Hire IT Outsourcing Company

This is the process to find the right outsourcing company for you. And with this, we have come to the end of this blog as well as settled the in house versus outsourcing debate.

Conclusion

In-House vs. Outsourced is a debate that has been going around for a long time and it confused many clients.

But blog shed some light on both of these areas as well as the better choices based on your business needs. Now, if you have opted for outsourcing services, all you need to do is reach out to an mobile app and web development company.

Niketan Sharma

Niketan Sharma is the CTO of Nimble AppGenie, a prominent website and mobile app development company in the USA that is delivering excellence with a commitment to boosting business growth & maximizing customer satisfaction. He is a highly motivated individual who helps SMEs and startups grow in this dynamic market with the latest technology and innovation.