In-house or Outsource: The Right Software Development Strategy For You

“Software is eating the world” the adage goes. As more and more companies transform to bring technology to the center of their businesses, the importance of software development has never been greater. But how should companies approach software development and which route is the best for them? Should businesses pursue in-house solutions or outsource their needs to third-party vendors?

In this article, we’ll explore both options–in-house vs. outsourced–and help you determine what solution makes the most sense for your organization.

Two Most Common Ways to Develop Software

The two most common ways that organizations develop their software are by building an in-house team dedicated to the product or by outsourcing the development to a third party. This is one of the earliest decisions that a business will have to make, but also the most important because it will have downstream effects on the future of your product. Each approach has its pros and cons, which should be considered when making a decision about how to develop software for your organization.

Generally speaking, building an in-house software development team can be a great option for companies that have the resources and expertise to manage the process internally. However, it can also be a risky proposition, as it requires a significant investment of time and money. In addition, if the project is not managed correctly, it can lead to scope creep and failed functionalities.

Outsourcing to a third-party provider can be a great way to get started with agile software development without making a significant investment. According to a 2022 study by Accelerance, 60% of companies outsource at least a part of their application development – supporting its popularity. However, it is important to choose a reputable and experienced provider that you can trust to deliver quality results. You will also need to be clear about your requirements and objectives to ensure that the project stays on track. So what are some of the benefits and drawbacks of each?

In-house Software Development

With an in-house software development solution, your organization retains full control of the process and has access to specialized talent. You get to make all the decisions about quality, design, and coding standards which can help ensure that the product meets your exact specifications.

The downside is that managing an in-house team can require significant financial and personnel resources. You will need to recruit and retain qualified engineers, purchase the necessary hardware and software, allocate space for them to work, and manage their progress throughout the development process. This can be a long and expensive process that may not meet your timeline or budget requirements.

Advantages:

• Control

The company is in complete control of the software and its development. This allows for greater customization and faster development times.

• Familiarity

In-house developers are familiar with the company’s needs and existing technology, which makes it easier to ensure that the software meets those needs.

• Security

In-house developers mean that many security concerns are solved from the start. Your security requirements can be baked into the code from the first line. Similarly, the chance of any important intellectual property or code being stolen or reused is almost zero.

Disadvantages:

• Resource allocation

In-house development can be time-consuming and costly in terms of the resources needed to manage and maintain the software.

• Lack of context can lead to imperfect software

There is always the risk that the software may not meet all of the company’s needs or may not be as high-quality as desired.

• Lack of necessary skills and technical expertise

Companies may lack the skills and expertise required to develop software in-house.

Outsourced Software Development

Outsourcing is a great option for companies that don’t have the internal resources or expertise to handle software development in-house. By hiring an experienced third-party vendor, you can get access to specialized talent without having to hire and manage them directly. This can save you time and money while allowing your business to remain agile and competitive.

The downside is the lack of control over the project and the potential for communication breakdowns. You may find yourself feeling disconnected from the development process and unable to provide any meaningful input or guidance. This can lead to delays and a product that does not meet your exact specifications.

Advantages:

• Agility

The software can be developed quickly, with fewer resources needed from the company. This helps meet deadlines and launch products ahead of schedule.

• Cost-effectiveness

Software development costs are typically lower when outsourced, as the company does not need to invest in recruiting and maintaining an internal software development team.

• Expertise

The expertise of a third-party provider can be invaluable, as they often have specialized knowledge that may be otherwise unavailable to the company.

• Focus on the project at hand

Outsourcing takes the pressure off of the company’s internal resources, allowing them to focus on their core objectives while ensuring that the software development project is handled properly.

• Rigor in the development process

Outsourced providers often have established development processes that can help ensure a high-quality product. If your internal team is new and/or small, these processes are unlikely to be as regimented and reliable.

Typical Disadvantages:

• Lack of control

Since the code is being written by an outside source, there may be a lack of oversight and difficulty in ensuring that the product meets your exact specifications.

• Communication issues

Communication can be difficult when working with an external provider, as both parties may not have a clear understanding of the project goals and expectations.

• Security risks

Since the code is being written by an external provider, there may be a greater risk of intellectual property or data theft.

• Familiarity

Third-party developers may not fully understand the company’s needs or technology stack, leading to a product that does not meet the requirements.

• Timing

Selecting a third party that can deliver quality code within budget can take significant time and energy.

The right software development outsourcing partner will have the necessary skills and experience to deliver on your project requirements, transparent communication channels, and clear expectations to ensure a successful collaboration. At Acklen, we have a little something called the Acklen Way.

Acklen Avenue has developed an effective engagement and delivery model with a proven track record of success over the past 13 years. This model eliminates the typical disadvantages of outsourcing software development projects. If you’re interested in learning more about how Acklen Avenue can help, please reach out to us at sales@acklenavenue.com.

The Right Decision for Your Engineering Needs

In-house or outsourced–which option is right for you? Ultimately, the answer depends on your company’s needs and objectives. In-house development gives you full control over the process and access to specialized talent. But it can also be expensive and require a significant commitment of resources. Outsourcing provides cost savings and flexibility but may leave you feeling disconnected from the development process.

So which option is best for your organization? It really depends on the size, needs, and budget of your company. In-house solutions are typically better when companies have a large team of developers or need more control over their software development process. On the other hand, outsourcing can be a great option for those who don’t have the resources or expertise to handle software development in-house.

No matter which option you choose, it’s important to do your research and find the right partner for your engineering needs. That way, you can ensure that your project is delivered on time, within budget, and with a high level of quality.