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In-house Developer Or Outsourced Developer: Which One Is Better For Your Startup?

by Innov8tiv.com

Source: Alphalogic

Starting your business is a rollercoaster ride of emotions. You are happy, anxious, overwhelmed, and nervous all at the same time.

As an entrepreneur, you are constantly juggling multiple tasks, securing yourself a one-way ticket to burning out if you don’t quickly learn what and when to delegate or bring in outside help and expertise for.

For example:

Most start-ups involve developing some kind of software. That might be a simple website but it can also often mean much more complex software development.

Most founders have neither the time nor the technical expertise to take on software development themselves. That leaves a choice between hiring an in-house team or outsourcing the work.

Startup founders need to ask themselves, “Should I choose an in-house team or outsource to a specialist software development company?”

In the following article, we will discuss in depth the pros and cons of both in-house developers and outsourced developers, and guide you through the process of finding the best fit for your business.

In-house Development Team

Who Are They?

An in-house team refers to a group of experts that works within a company as full-time employees in a specific field.

How Are They?

Having an expert team is a great advantage when building a long-term solution for your business.

However, it can take a while to start the team from scratch. This is because the process of interviewing, selecting, and hiring the right talents for your business can be quite time-consuming.

The cost of assembling such teams can be another setback.

A startup will need growing revenue numbers to be able to afford an in-house team of highly skilled developers to get a job done.

And that’s not all to consider. You have to keep in mind that initially, you may need many hands to develop your website, but once it is launched you probably won’t need as big as a team. To remain cost-effective, you will have to terminate members of the team.

On the other hand, there are also advantages of having an in-house team.

You will have total control over the entire development process. In case of an emergency or any urgent change, you will always find your team ready to fix the problem.

This might be a preferable option for medium to big organizations with sufficient funds and management resources with regular work.


Source: Cleveroad

Pros

  • Complete control over the team
  • Get real-time fixes and changes
  • Control output based on the assigned project scope per head
  • Cost-efficient in the long-term
  • Easily available
  • If one member is sick, it doesn’t impact the entire team

Cons

  • The lengthy and exhausting onboarding process
  • Hiring takes a lot of resources, costs, and overhead
  • Requires supervision and management
  • A big team means a big chunk of money goes into paying salary

Outsourced software development

Who Are They?

An outsourced software development company specialises in building software products for third-party clients. It’s their core business. Software development companies are contracted for a particular project and can work to a variety of models from fixed-price to an agile methodology, as per the preference of the client.

How Are They?

Software development companies are a great solution if you need to develop a particular product but don’t know exactly what your, fixed, long-term needs are when it comes to development resource. They offer flexibility and avoid taking on fixed overheads, which can be strategically important for companies, especially startups.

Pros

  • Software development companies avoid fixed overheads
  • Projects are delivered on time
  • Highly skilled in the specific tech stack you need
  • No lengthy or exhausting onboarding process
  • Require less supervision and management

Cons

  • Not as ingrained in your company culture
  • Short-term expenses can be higher than hiring in-house as the company takes a margin on top of the basic salary costs of the IT specialists they provide.

What Should Your Start-Up Choose?

Still not sure which option you should take? Let us break it down a bit.

Project Size

A critical aspect to consider when choosing between the two options is the size of a project. The more complex the project, the more resources and heads you need to develop it smoothly.

An in-house team allows you to have more control over the progress of your project depending on its size.

For Example;

Large projects like Drupal web development require more commitment. So, you can either hire a drupal developer team for the whole project. Or you can augment your in-house team with outsourced drupal experts from a drupal development company if necessary. And for small projects in the same technology, the best option is to outsource software development companies as you can assign each project to expert drupal developers.

Expertise

It is crucial to analyze both parties’ practical expertise before deciding. You can use advanced developer screening software to test their skills, knowledge, and potential to work on your projects.

Project Scope

If the project is challenging and complicated, you will likely need more hands on deck for the extra support in designing and developing each part.


Source: Grey Campus

Here, in-house teams may play a better role as it has a more balanced and diverse list of members.

Project Duration

Project duration is probably one of the most important factors to consider when hiring people.

With a small, simple website, you will only need a month or so to get it done, but with something as complex as a SaaS project, you might take an entire year to design, develop, and refine! You will then almost have ongoing work making improvements and adding functionalities.

And with such a big and long project comes a lot of responsibilities and workload. Hence, it might require assistance from experts of different kinds. Therefore, hiring an in-house team seems to be a better option.

But make sure you consider what happens once your main project ends. You are tied into labour contracts so need to be sure you will have stable, ongoing work for at least 2-3 years for it to make sense to hire in-house.

Available Budget

Budget estimations require close inspection, especially with complex and lengthy projects that involve many variables at each stage.

For in-house teams, these variables include training, office space, equipment, salary, taxes, required software licenses, development costs, etc. If there’s a project spanning several months, you should take these things into account to get an approximate estimation.

There are basically no variables apart from the development cost, special software cost, and taxes for an outsourced software development company.

Cost-wise, outsourced developers provided by a software development company sound like a better option.

Security

Top-notch security is essential for every online asset, irrespective of the industry, niche, or domain.

With an in-house team, all your data, confidential information, and tools will remain within your watch. Although that doesn’t guarantee that there’s no threat; it just minimizes it.

On the other hand, outsourced developers are usually remote workers from a distant location who you may not know very well. Thus, there’s a theoretically higher risk of a data breach from that front. However, most software development companies have strict procedures in place to mitigate that.

Companies can also get the software development partner to sign a data-breach contract which drastically minimizes the risk.

This is usually included in the initial contract between the business and company and specifies the terms of security and the measures that can be taken if the contract is breached.

This just ensures your protection should any malpractice take place.

Conclusion

As you can see, both in-house and outsourced developers have strengths and weaknesses — your decision mainly depends on the aspects and criteria of projects.

For example, working with a third-party company avoids fixed costs but in-house teams can be more efficient. On the other hand, in-house teams need supervision and talent management; outsourced developers from a company are mostly independent or come with delivery management.

The only thing left now is to make your decision and start nailing your projects.

And remember that nothing is permanent. If the decision you made is no longer working for you, feel free to change it up.

Ultimately it comes down to putting your business first by finding the perfect solution — whatever it may be!

About Author

Saurabh Dhariwal is a Co-Founder of AddWebSolution, an Enterprise Web Development Company.

He has experience of 14+ years in technologies like Drupal, WordPress, Laravel, AngularJS, and JavaScript. Besides his passion for learning new technologies and excelling at them, he likes to spend time with his family.

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