The Trade-Offs of In-house Development Vs. Outsourced Software Development –Real or Perceived?

This post will briefly examine some of the main points that businesses will compare when trying to decide between developing software in-house or outsourcing it to a third party while asking the question, “Are these trade-offs real or perceived?”

1. Outsourcing is cheaper: This tends to be true, especially if you’re working with an offshore development team. Certainly an organization who uses an outsourced approach can avoid many of the added costs of onboarding a full-time employee (payroll taxes, medical benefits, recruiting fees, etc.). However, there is an important caveat – if your outsourced software development partner delivers shoddy work, fails to meet agreed upon deadlines, or is generally unresponsive to your needs, you might end up spending considerably more to fix the mistakes that were made while trying to make up for lost time.

2. Outsourcing = Lack of Control: Thankfully, this notion is becoming more and more outdated as technology continues to make collaboration and transparency easier. Not only do mass market tools like Skype make it easy (and cheap) to connect with people in many different locations, but there are a host of different specialized communication tools (example: Cisco’s Jabber) that allow outsourced software development partners to connect with their clients on multiple levels (account manager, project manager, developer, etc.)

3. Selecting an Outsourced Software Development Partner is equivalent to “rolling the dice”: While this is the sentiment from a great number of people exploring an outsourcing initiative, there is no reason why this should be the case. Not only should a partner be able to point to a list of reference accounts, it should be willing to share examples of past projects for review. And if that’s not enough, you can take the additional step of working with a partner who has real “bricks and mortar” offices in the US and employees who you can meet with, face-to-face, to discuss business needs and objectives, contract terms, and anything else.