Whatever task a business faces – process automation or development of a previously implemented software product – the eternal question remains: write it yourself or outsource it to an experienced software development company? In this article, we will look at the most popular approaches to software development and talk about their advantages and disadvantages.
Own Development Team
In-house development implies having your own team with the necessary skills and abilities in terms of IT. And everything would be fine, but often the maintenance of such a team is a serious burden on the company’s budget. Although in some cases, in the long term, in-house development will cost less than attracting external resources.
Benefits of in-house development
- Deep involvement, and understanding of the specifics. A full-time IT employee understands the intricacies of the business, understands the goals and undercurrents, and quickly responds to changes in processes.
- Independence from the external market. A full-time IT specialist understands his own product well and can adapt to any changes. In theory, this means that you gain independence from external contractors, but in reality, you may encounter a number of difficulties, which you will read about below.
- Clear communications. An in-house team is more likely to have a similar cultural, and social background, which makes communication easier.
Disadvantages of in-house development
- The cost of IT professionals. Finding a good IT specialist, even with specific competencies, is a difficult and expensive task. And in case of insufficient loading of a specialist, the company will essentially pay for “downtime”.
- Employee leaving. This is one of the biggest risks of in-house development. Layoffs of key people can undermine the established development process. Finding a replacement will take time.
- Narrow specialization. In addition to the programmers themselves, to build your own IT team, you will need to hire performers for the positions of QA engineers, DevOps, managers (this is not a complete list), and in the event of new tasks, an engineer with highly specialized development skills may be required. And again expensive recruiting.
Outsourcing
If a company seeks to optimize resources, and cost structure, it is advisable to transfer the development to IT outsourcing and focus on key business tasks. Like in-house software development, this approach has advantages and disadvantages.
Advantages of development outsourcing
- Reduction of Time to market. An external software development company can bring a new product to market faster because they don’t have to assemble a team and build a process before starting to develop.
- Resources on-demand. As part of IT outsourcing, you pay exactly for the resources that you need to implement the project.
- Exactly and on time. By concluding an SLA (Service Level Agreement) with an external IT contractor, the company makes the development process more formalized. Plus, the tasks and deadlines are regulated by the contract.
Disadvantages of outsourcing development
- Difficulties in understanding. The external team will develop the product in accordance with the agreed specifications, so the company must be sure that all parties have the same understanding of the tasks and acceptance criteria for work performed.
- Difficulties with maintaining the system. If a company outsources the development of a strategically important product, it must ensure that all supporting documentation is properly prepared and submitted.
Outsourcing is economically justified for companies that want to receive a finished product directly and indirectly. The thing is, “boxed” IT solutions rarely correspond to the individual business processes of the customer – one cannot do without customization, integration, and integration of individual modules into a single ecosystem. Such development with the help of internal resources is an unjustified waste of the budget because each of the systems (especially if they are implemented on different technological platforms) will require a separate team of IT specialists.
Hybrid Approach to Software Development
A hybrid approach is a combination of in-house development and outsourcing with all their advantages and disadvantages. As we have said, internal IT professionals play an important role throughout the development of a software product, from the moment the idea is born to its launch to the market. At the same time, outsourcing helps businesses save money without losing the quality of implementation. Furthermore, technological innovations such as codeless automation testing tools can contribute to a hybrid approach, being useful both in-house and as part of an outsourced element.
Advantages of a hybrid approach in the development
- Flexible design organization. This way of working creates a favorable environment for effective planning, in-depth analysis, and delegation of IT tasks. The company itself decides which services to outsource and which to perform by its own developers.
- The choice of the optimal cost. A hybrid approach allows you to better manage your budget. IT outsourcing has lower costs while in-house development is more economical in the long run. In this case, the business independently resolves this issue at any stage of the project, involving one or another party in the tasks.
Disadvantages of a hybrid approach in the development
- Time for evaluation. Businesses will need time to analyze the situation and select a solution.
- Complexity. Internal processes are different from the organization of work in IT outsourcing. A hybrid approach combines the two, but it can create challenges for business owners in managing development tasks.
Summary
Both in-house development and outsourcing have their advantages and disadvantages. The choice of the optimal option is always individual and depends on the goals, objectives, and resources of a particular company.
If it is important to keep the IT functions that define the main direction of the business and relate to the core competencies of the team within the company, then in-house development will be the most appropriate solution.
Otherwise, the choice in favor of an external IT team is not only economically justified but also guarantees a qualitatively higher level of development. IT professionals who purposefully work on a core product do it more skillfully, without turning the process into a series of endless improvements. Moreover, a specialized software development company usually delivers projects within the planned time frame and in compliance with the NDA (Non-disclosure agreement). And as a result, the company gets a competitive product, gets rid of non-core assets and functions, and also gets strategic, operational, and technological advantages in the market.
