Software Development Outsourcing vs. In-House

Software Development

Software Development Outsourcing is a critical topic that more and more major companies are dealing with. There is a right way to outsource and a wrong way to Software Development Outsourcing. In the past you heard terms like “Build vs Buy” but as software has become increasingly critical to business success the reality has turned to should I try and build the exact custom software I need for my business application in-house OR can I define the functionality thoroughly enough to outsource my software development to others (presumably cheaper developers) and still get exactly what I want. Well… read on and I’ll give you my thoughts.

With more people than ever being online and virtual, software development has never been more important. The number of people using computers and the Internet has sky-rocketed as of recently, and it isn’t much you can’t do online. People use online software for so much more than just online shopping or chatting. Individuals and businesses have been using software to their advantage to grow their businesses, grow their reach, and create a platform to talk about products, services, beliefs, and so much more.

Before we go further into what makes software development so important and how you can use it in your life or your business, we want to make sure you have a true understanding of exactly what software development is. In technical terms, software development is the process of creating, specifying, designing, programming, documenting, testing, troubleshooting, and everything else involved with creating and maintaining online applications, networks, and more. There are three main types of software development: system software, programming software, and application software. Each has a different purpose and each works differently in different situations. Software development is usually taken on by programmers, software engineers, or developers since it is a very technical task.


Table of Contents

Comparing In-House Software Development and Outsourcing

5 Factors to Consider Before Making Your Final Decision:

  1. Cost
  2. Scalability
  3. Talent
  4. Risk factors
  5. Time

Making Your Final Decision: What’s Right for You?

3 Questions to Ask Yourself Before Making Your Choice:

  1. What is most important to you?
  2. What is your end goal?
  3. What’s your budget?



Comparing In-House Software Development and Outsourcing

Now, let’s talk more about what makes software development so important and profitable for businesses like yours.

When it comes to talking about software development in the sense of business, there are endless ways of what makes it important. Software development is used so businesses can showcase their business, what they have to offer, and distinguish themselves from their competitors.

These days, consumers like everything to be digital so they can have access to everything at the tips of their fingers. You probably don’t see many people walking around without a cell phone, do you?

Everyone is obsessed with the internet everything, and it truly has given us access to anything we could ever imagine. This fact alone is what makes software development a crucial part of staying relevant in your market and growing your business.

Software development is also a crucial factor for data analysis. Since everything from views, clicks, purchases, etc. can be easily tracked, you can learn so much about your buyers and their patterns. You will get actual, visible results when you invest in software development. This means you will have great insights into what your customers are doing, how they are shopping, their purchasing habits, and more.

Now comes the question of should you be outsourcing your software development or doing it in-house? There are so many things that will go into making this decision, and this decision is something you should take your time with. Software development is no easy task, and you want nothing but a team of professionals taking on this kind of project. You can either choose to outsource this work to a business that does software development for a living, or you can hire an internal team to focus on this. There are a lot of pros and cons to each option, so how do you know which one is right for you?

If you’re wondering which option is right for you, here are some things you should consider and determine before you make your final decision if you should outsource your software development or do it in-house…

5 Factors to Consider Before Making Your Final Decision:

  1. Cost

The difference in cost of software development in-house vs. software development outsourcing is a wide range.  If you chose to go the in-house route, you need to be aware it will be a pricey investment. You need to hire a team of developers which can come at a high price since you have to get them the proper equipment. Outsourcing this kind of work will still bring you high-quality results, but at a much lower cost. Since you will work with a software development company on a per-project basis, you don’t have to worry about purchasing equipment and paying a salary to each person on your development team.

  1. Scalability

Software development involves a lot of analytical thinking and thinking far into the future. You need to look at your business from a bird’s eye view and be able to stay focused on your path. If you’re doing software development in-house, it’s easy to get lost in your path and lose focus. This can limit your growth and perspective on software development. If you outsource, they make sure to document everything so you never lose sight of where you are headed. Another benefit of software development outsourcing is that the company you go with will have a fresh perspective and help you reach your business goals.

  1. Talent

For most positions, hiring internally is always the first option. But when it comes to software development, that isn’t always the best solution. If you are looking for high-quality results that will positively affect your business, you want to find talent that can check off all the boxes. Going the in-house route means you may have to train someone for the job and educate them on software development. Whereas, if you chose to outsource, you won’t have to worry about training or making sure the engineer has the proper education and knowledge for the job.

  1. Risk factors

One factor to consider before choosing the option of in-house development or software development outsourcing is the risk factors you may encounter. It’s no surprise that managing people is easier when you see them every day. In this case, in-house software development is the easier option, but you may waste a lot of time managing your employees and your team. If you decide to outsource, the team of developers may be working in a different part of the country or maybe overseas, not making it as easy to communicate or manage what they are doing. You need to figure out what works best for your business model and stick with it.

  1. Time

If you own or run a business, you know how little time you have during a day to get stuff done. If you are already swamped with work and your team is too, doing in-house software development is only going to add to your plate – whether you moved someone into the position, or you’re trying to find the perfect team of candidates. When you outsource this task, you and your team won’t lose valuable time during your already busy days working on developing your software and making sure everything is done properly.

Now that you know what major factors need to be considered before you decide if you want to hire in-house software developers or hire an outside company for it, it’s time to determine what works best for you, your team, and most importantly, your business.

Making Your Final Decision: What’s Right for You?

When it comes to making decisions in your business, things are mainly black and white. Choosing whether to do your software development in-house or software development outsourcing the work isn’t such an easy decision.

Before you make that final choice, you should go through each factor listed above and see how it fits into your business. Do you and your team have time to add on this task and get it done properly? Do you and your team have the knowledge to develop your software? Does your business have the budget to hire an outside source for software development?

Take your time thinking through these different factors. When it comes to determining if you should do software development in-house or outsource it, you should always take your time. This isn’t a decision you will be easily able to make in a couple of hours. It may take a couple of weeks to weigh out all the different pros and cons, and determine which will benefit your business and your team the most.

Making this decision isn’t easy, and you may think you’re never going to make the right decision. If you’re unsure about what option is going to benefit you, your team, and your business the most, we have just the thing for you!

We came up with a series of questions that you should consider and answer before you make your final decision.  Depending on your answers to these questions, you will be able to clearly tell just what option is going to be the best for you. Here’s what you should ask yourself, your team, and your upper management team before choosing to outsource your software development or to do it in-house…

3 Questions to Ask Yourself Before Making Your Choice:

  1. What is most important to you?

When we tell you to ask yourself and your team this question, we want you to think bigger picture. This means thinking about your overall goals. Is your goal to save as much money as possible? Is it to reduce the risks of things going wrong with your software? Is your team’s time the most important thing right now? Ask yourself what is important to you and your business right now. If you feel like your employees are already overwhelmed with work, outsourcing your software development is the right choice for you. If you want to keep your software development internal and you don’t mind spending the time or money to get the team up and running, then in-house development is the option for you.

  1. What is your end goal?

As a business owner, it is your job to create goals for your business each year. When it comes to software development, you are the one who needs to set milestone goals for your team. You need to layout what your different end goals are, and see which route is best for those goals when it comes to software development. Is your end goal to stay within budget but still get high-quality developers? Software development outsourcing is your option! Is your goal to be as involved as possible and learn about how software development works? Keep it in-house!

  1. What’s your budget?

Budgets are a very important thing to remember when making this decision. Some budgets are more flexible than others, so it’s important to always be thinking about your budget when deciding between in-house software development or outsourcing it. One of the most important things to ask yourself before making your final decision is your budget. Do you have room in your budget to hire internally? This is the more expensive option, but if you prefer to be more involved and manage your developers, this is the better option. Is your budget on the tighter side and you don’t want to spend a crazy amount of money on software development, but you still want high-quality work? Outsourcing is the way to go!

Once you go through and answer these questions, it’s time to make your final decision. There is no right or wrong choice when it comes to software development. It is all based on personal preference, and really figuring out which option works best for you, your team, your business, and your missions and goals.


Software development is so much more than just creating an online space for your current, new, and potential customers. Software development opens the door to so many new people, new opportunities, and new ways of reaching people. It’s a great tool to stay connected with your customers, and it’s a great way to show people that you know what you are doing and you want to help improve their lives with your products or services.

The hardest part of software development is deciding whether you should do it in-house or outsource the work. We hope this blog acts as a guide to help you make that decision, and we hope that it makes your decision easier and clearer. Software is the key to your customers – you just have to understand how it works and how it can help not only you but your team and your business! When making your decision, we strongly recommend taking your time, considering everything we talked about today, writing it all down, and using that information to make the best decision for your team and your business!

Jeff Nelson

Jeff Nelson

Jeff Nelson is a technical architect, software expert, and serial entrepreneur. With his extensive knowledge of software development and his ability to bring theoretical concepts to life, Jeff is driving innovation in technology, business, culture, and public policy. He is the Co-Founder and CTO of Blavity Inc., the leading company for Black culture and millennials, and the Founder and CEO of Cinchapi Inc., a real-time software platform for data discovery, analytics, and automation.

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