In House Software Development vs. Outsourcing

Outsourcing software development continues to expand as a global trend. As the demand for technology talent increases, companies are finding themselves needing expert talent that may not always be available in-house. Regardless of their industry, many companies face the same problem: Should we outsource software development or hire in-house?

The short answer is it depends. Both outsourcing and hiring in-house have their own benefits and downsides. The nature of the project will determine the best path to take, so it’s crucial to weigh your options.

Here are some of the most critical benefits and drawbacks of each approach so you can choose an option that will support your business goals best.

In-House Software Development Pros and Cons

Benefits of In-House Software Development

Engagement and cultural fit: Software developers who are permanent members of a team are more aware of the company’s business needs. They’re more dedicated to achieve better results and deliver better value.

Increased agility: An in-house team is familiar with the product, allowing them to make changes and add project features faster. They can also deal with errors and bugs more quickly.

Efficient communication: A streamlined communication process where workers work from the same office and within the same hours helps save time and avoid misunderstandings, eventually accelerating the development process.

Drawbacks of In-House Software Development

High costs: In house development can be quite costly. The final price of end products typically includes everything from office rent and overhead costs to benefits, training, and more.

Difficulty in finding skilled personnel: The high demand for tech experts makes it difficult to find and hire the right professionals in some regions of the world. Finding the right experts and assessing their skills before hiring them generates additional costs.

High staff turnover: Software developers tend to change their jobs quite often due to the ever-increasing demand for their skills. Finding a new developer for your project can slow down projects significantly.

Outsourcing Software Development Pros and Cons

Benefits of Outsourcing Software Development

Cost reduction: Outsourcing skilled developers allows you to avoid incurring all the costs of hiring and maintaining an in-house software team.

Easy scalability: Working with an outsourced team allows you to scale teams to quickly match the product’s changing needs.

Achieving the same level of flexibility with an in-house team can be a challenge. Hiring new team members can be time-consuming, and firing them could ruin your reputation and team morale.

Fast time-to-market: Outsourcing software development means you can start building your product almost right away; building an internal team, onboarding them, and setting up processes takes much more time.

Proven processes and workflows: Outsourced teams have worked with numerous clients and built plenty of applications for various sectors. They’re efficient at collaboration and use proven workflows and processes to deliver quality end products.

Top talent: Software development companies can hire top IT specialists, giving you access to unique skills and expertise.

Potential Risks of Outsourcing Software Development

Business failure: If the software company you’ve outsourced goes out of business or is forced to scale down dramatically, this could pose a risk to your project.

Low-quality code and documentation: If an outsourced team develops low-quality code and documentation, transferring the project to another group can be time-consuming and expensive, especially if the entire project has to be redone from scratch.

Communication issues: While outsourced teams are experienced at delivering optimal services regardless of their location, partnering with a software company located in a different time zone comes with the potential risk of communication problems.

Limited control over the development team: Outsourcing software development projects that carry a high business value may be risky because of the limited control over the development team.

Little motivation: Monitoring the engagement of an outsourced team can be challenging.


When deciding whether to outsource or hire in-house, it’s essential to consider the project’s budget, scope, and deadline. Having an in-house team that’s highly trained and experienced to handle any project that arises is tough. But outsourcing allows you to get the skills you need fast.

When selecting a software developer to outsource a project, ask how they handle the challenges mentioned above. A software developer should be a flexible, critical thinker. It’s also important to ask about their background, work experience, and technical expertise.

At Iotechno, we provide top-notch custom software development services for businesses. Partner with us to leverage our skills and experience to build custom software for your company. We have a diverse portfolio of successful projects and take pride in exceeding client expectations.