5 Reasons Why Software Development Outsourcing beats In-house Development Everytime

The battle between in-house development and software development outsourcing has raged on for quite some time now. While some organizations feel that the security of working with an in-house team can never be equalled by bringing an outsourcing partner on board, the numbers tell a different story.

A report from Statista states that over the past year, the Software development outsourcing market amounted to $66.52 billion, and by the end of 2021 this number is expected to reach $413.7 billion. This Software Development trend is a clear indicators for the steady growth of the software development outsourcing industry and yet there exist puritans who swear by the virtues of in-house development.

As a long time tech evangelist and a part of the IT ecosystem for over two decades now, my views differ. Contrary to the conservative belief that software development outsourcing is merely in vogue for the here and now, I believe that it holds significant strategic and real-world value for enterprises of all scales and verticals for many years to come. This article touches upon 5 crucial parameters on which Software development outsourcing beats in-house development initiatives. So fasten your seat belts because this ride is going to get bumpy.

1. No geolocation limitations

With in-house development, your enterprise is constrained by hiring factors such as how close your prospective employees are to your premises or whether you are willing to pay for their relocation. These costs can ramp up your expense on hiring a suitable team even further given that with a full-time employee come benefits, infrastructure costs as well as a lengthy onboarding process. Moreover, if your enterprise has had a windfall and there are numerous projects pouring in, the cost of hiring an in-house team large enough to successfully work on these projects is going to take a very large chunk out of your profit.

On the other hand, software development outsourcing is a highly effective way to mitigate such costs while granting your enterprise access to a global talent pool. You are no longer limited by geolocation and can choose from the very best tech talents across the globe. Your hiring criteria can now seamlessly shift from prospective employees' proximity to your premises onto more critical factors such as skillsets and professionalism.

2. The option of efficient Scalability

Software development is a process that might face fluctuations in scope and demand changes that require immediate implementation. If the project at hand demands an upward move in team scale and your in-house team is already stretched thin over other projects, then you will find yourself in the hiring chair once again. Lengthy and cost-intensive onboarding of new employees again begins to burn a hole in your pocket.

On the other end of the spectrum, if you do not have a very heavy load of work currently going on at your organization and only a part of your workforce is required to complete the projects at hand, you will still be paying the rest of your in-house team even though they are not involved in productive endeavors.

Software development outsourcing offers the perfect solution with unparalleled scalability. With a software development partner, you have the flexibility to rapidly scale your team-size up or down. Every time you need more developers, you can just let your outsourcing partner know, and if your project is now close to completion and you require a much smaller team, you can help you retain only those resources that you need.

3. Perfect for the Cost conscious

We have already discussed how expensive hiring and maintaining an in-house development team can be. You pay salaries, benefits, infrastructural expenses, and even severance if you wish to scale. All of this not only costs money but also drains temporal resources.

When considering the factor of cost-efficiency, software development outsourcing enters the arena with a sword in each hand. Not only is hiring an outsourcing partner cheaper in terms of the aforementioned points of salaries, benefits, and infrastructure, you can even achieve further cost reduction by leveraging the extensive geographic reach offered by it.

An outsourcing partner in geolocations such as eastern Europe, India, or the Philippines can offer you the exact same quality of work at a much cheaper rate than what a developer in the US or UK would charge. The cost of living in these areas is a lot less, and so are the salaries, thus making outsourcing to them exceptionally cost-effective. Indian developers rank in the top 1% in terms of development chops. Arguably, they offer the best value for money amongst offshore outsourcing locations, striking the perfect balance between cost and quality.

4. Fully-functional team composition

Software development teams do not consist merely of developers. For project completion, your enterprise would require coders, DevOps, testers, designers, business analysts, and QA professionals, to name a few team components.

If you consider building your team in-house, you are forced to go right back to square one, where you are sitting across the table interviewing candidate after candidate to find one that fits your requirements and budget. Even if you do find the perfect team, which is highly unlikely given the earlier mention issue of a talent pool limited to your location or the willingness of candidates to relocate to it.

Many a time, your enterprise will be forced to make compromises in terms of cost and quality just to get its project on the road, and that is not considering the fact that valuable time that could be spent on actual development is instead being spent on bringing your new hires up to speed.

With software development outsourcing, your enterprise can share its requirements, get consultations from industry experts on team composition, and bring on board a fully-functional team that has all the skillsets your project requires.

5. Realigned focus on what matters: core business

A development initiative is always a big deal since, as an enterprise, you desire top quality, at good rates, and well within stipulated timeframes. If your development project is being undertaken by an in-house team, it is very possible that time and resources that could be utilized elsewhere are instead consumed by micromanagement. Your enterprise is invariably going to make the error of shifting its focus from its core business to the shiny new toy being developed.

In the case of software development outsourcing, the entire process is overseen and managed by a dedicated project manager deployed by your outsourcing partner. It is the PM's responsibility to take care of all issue resolution and on-point communication of progress during the SDLC

An ideal software development outsourcing partner will introduce you to your PM in the very first stage of development. Once the project plan and estimate are approved, the responsibility for keeping on schedule, budget, and quality falls upon the PM. The best outsourcing partners leverage agile development methodologies and manage teams, sprints, deadlines, delivery, and feature demos while offering you the chance to make suggestions or changes at all points of the development process while your enterprise can focus on its day to day business. Thus not only does your enterprise gain a covetable tech asset assuring competitive advantage, but it also has the time to lay down all the groundwork and strategy required to get its market raving for what is about to come.

Wrapping up

An in-house team does have its moments of glory given the ease of communication and sense of security that it offers. You know that your team is going to show up at your premises every day and work until your project is complete. However, this advantage, once only offered by an in-house team, is now offered by an outsourcing partner as well. The reputation of a software development outsourcing partner is on the line every time it takes up a new project. Development is their core business, and as organizations wishing to progress, they make sure that their delivery of the project matches all criteria of quality, stability, on-time delivery, maintenance, and support so as to stand out from the competition.

In the end, it is entirely up to you, the stakeholder, to decide between the options of an in-house team or an outsourcing partner. I trust that this article will help you make a well-informed decision that fulfils all your enterprise needs.