Businesses should know the actual rates of experts, check the conformity of price and quality. With 20 years of experience managing project deliveries, EPAM’s Director of Tech Solutions breaks down main vendor engagement types and their advantages. Find out what goes into IT outsourcing costs and how they differ by region. EPAM Anywhere Business is backed by 30+ years in IT services, offering the flexibility, cost-efficiency, and security your business seeks.

in-house vs outsourcing software development

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

More control over the process

While many believe that saving money is the core of outsourcing software development, there is actually more to it. In the present era, applications are increasingly becoming complex, thereby requiring more expertise. With years of experience and competencies in the field, outsourcing agencies can successfully handle complicated projects. As you can see, the competition between in-house vs outsourcing software development options is keen. The first one is expensive, time-consuming, and often ineffective. On the other hand, outsourcing software development to the right company can save you money and time, but not all of them have a similar experiences.

in-house vs outsourcing software development

Outsourcing usually suffers from a lack of face-to-face communication. As a result, you can’t control the whole development process and may not feel well-protected. If you are afraid that your idea and groundworks will be stolen, you should sign an NDA contract. This agreement guarantees the protection of all your rights and the project idea. Developers that work as permanent team members tend to pay much more attention to the specific needs of a company.

Pros of Outsourcing Software Development

On top of that, you are more likely to pick candidates fitting your corporate culture, as you will be the one handling the hiring process. In-house development is ideal for long-term projects where the team should be well acquainted with the company culture, processes, and long-term goals. Outsourced development is a good choice when you need to quickly scale a team or have access to skill sets that are not available in-house. Nonetheless, opting for outsourced development is not without its downside. Just like in-house, startups, and businesses need to consider their needs and requirements. Regardless of which option you choose, vet any potential contractors or developers thoroughly before signing a contract.

in-house vs outsourcing software development

You can count on them to put together the right tech stack to complete your project, provide proof of concept, develop prototypes, closely monitor the progress, and do regular testing. They can also mitigate the risks of making bad estimates or hiring the wrong people. There’s a high demand for tech talent, but the supply is limited.


In that case, hiring an in-house team will give you many benefits and minimal cons. If part of your team leaves in the middle of a project, progress may come to a screeching halt while you scramble to replace them. This urgent hiring process is even more expensive than traditional hiring, and it will add to the cost and time it takes to complete your project. Unless your team is fully staffed and ready to go, you may have to delay starting on your project. Hiring tech talent can be a long, expensive process, and your project may sit around stagnating while you’re sifting through applications and conducting fruitless interviews. One-third of the skills needed for tech jobs in 2017 are now obsolete, and the average tech position requires workers to increase their skills 10% each year.

When you choose to combine them both, it can give rise to challenges for the business owners. Managing the operations and processes of inhouse and outsourced software development can be complex and hard to handle. The advantages of a hybrid approach to software development are that it can improve the speed and quality of the final product. By combining software development outsourcing with an in-house team, companies can benefit from the best aspects of both models. Outsourcing can provide a quick turnaround time and low cost, while inhouse development can ensure that the product meets the company’s specific needs. Increasingly, businesses clamoring to find the manpower to develop software applications are turning to outsourcing.

When to use outsourcing development

That’s definitely a plus since entrepreneurs, software team leads, and managers have live communication and can track their in-house software progress. Advantages of outsourcing include low labor costs, high expertise, high flexibility, versatility, and scalability, access to a wide range of talents, and a short time-to-market period. In turn, the disadvantages of outsourcing are a lower level of control, potential communication issues, possible time zone differences, and a lower motivation of team members. For instance, if you want complete control, have skilled developers, and are ready to invest more, inhouse software development is ideal. But, if you have budget constraints and lack the required talent, outsourcing is the best option. When outsourcing your software development projects, you do not have complete control over the development process.

in-house vs outsourcing software development

You can benefit from the reduced cost of working with developers from nearby countries and still have the advantages of working with your own internal team. Software development firms or freelancers do this for a living, so they’re ready to start on day one. You won’t lose time assembling a team and training them to work within your company guidelines. Professional developer services will have established workflows that they’re accustomed to using to finish jobs quickly.

Disadvantages of Outsourced Software Development

Overall, it’s important to remember that both approaches have advantages and disadvantages. It ultimately depends on a business’s project goals, resources, and capabilities. Companies must be aware of all available options and understand their needs to make an informed decision. The financial investment of adding employees to the payroll and potentially investing in dedicated office space for a new team can add up in overhead costs. Let’s explore the key factors and their statistics for in-house vs outsourced software development in 2023 to help you decide which is best for you. In-house development is good when you already have a team of experienced developers and other specialists.

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