Hiring a Software Developer In-House vs. Outsourcing: Making the Right Choice for Your Organization
By SOLTECH
There are several ways you can go about developing custom software for your business. The most common question is whether to hire a developer in-house vs. outsourcing the position to a firm.
There’s not a clear-cut answer when it comes to choosing between your corporate software development options. It depends on unique factors, including your organization’s resources, structure, and needs.
Below, we will discuss the pros and cons of each option so you know which is the best for you and your project.
Pros of Hiring a Software Developer In-House vs. Outsourcing
Availability: There are a lot of software developers out there. You most likely know someone who is a professional software developer, so finding one is typically not hard. That’s a key point to consider when weighing whether to hire a developer in-house vs. outsourcing one.
Cost: Software projects come with a lot of fees. Many developers may be willing to work on the side for a lower hourly rate than what you will find at a staffing firm or software development firm. You may also find them on a contracting website like UpWork or oDesk, or as a one-person business that writes custom software.
Collaboration: Working with an in-house developer vs. outsourcing one can lead to better teamwork. You get one-on-one interaction, and they get to know you, your industry, and your product very closely. You are also able to develop a close working relationship as you both invest time in your corporate software development project.
Cons of Hiring a Software Developer In-House vs. Outsourcing
Required Skillsets: Corporate software development projects are typically diverse. There is web, mobile, and desktop software development, front-end and back-end development, architecture, and design. There are also plenty of competencies, like comfort with programming languages, to consider in each area.
Each type of programming requires a broad set of skills and experiences to build an application end to end. Unfortunately, not all developers have that expertise. Some might only know web or mobile. Some only build the screens, and some stay strictly to the back-end logic.
If you hire an in-house developer vs. outsourcing, you may run into limits of what they can do for you. This is important to keep in mind.
Design Capabilities: Likewise, not all developers know how to design an application. They are great at coding once they know what you want to build. However, you will need to document the software layout and design or outsource it to someone else. That’s an additional cost to take into account when planning your software development options.
Process: In-house developers vs. outsourced teams may cut steps short because he or she is the only person working on the project. There isn’t a project management structure automatically put in place. Documenting requirements, doing a full design, keeping track of tasks, and estimating budgets are not something most developers do when they work solo. This could create difficulties as your application grows.
Quality: It is hard for a person to both build and test their work. Also, when you work alone, there is little collaboration on the best way to do something. Problem-solving could even become more difficult.
In both cases, your application quality may suffer. That’s true both in the number of defects created and in the overall durability of the code.
Additional Management: In-house developers vs. outsourced teams may need more management by you. This could be prioritizing tasks, keeping track of his or her progress, testing their work, prioritizing defects in the software, etc.
There isn’t a project management structure automatically put in place when working with a single developer. As a result, you will need to take on this responsibility internally, hire someone to do it for you, or even have to bring more teams into the project.
Business Continuity: At its worst, hiring a single in-house developer vs. outsourcing can be a business continuity risk. Your developer may be slow to respond or might disappear altogether. This is more likely if they are working on your project during nights and weekends.
If he or she does go AWOL, you lose all business and application knowledge developed thus far. This may result in your organization needing to outsource a software development company to take over the corporate software development project.
Pros of Hiring a Software Firm
Reliability: Software development firms routinely deliver custom software. They will have both the processes and the staff in place to complete the entire project. They can reliably manage, design, develop, and test your software project along with developing it. Because of this, there is less risk.
Quality: Outsourcing vs. hiring in-house could help your team establish better processes for developing software. These processes allow for the company to repeatedly deliver quality software in shorter time frames for all of their clients.
Each step in the process allows the next step to be more efficient. Ultimately, it enables your original idea to be transformed into real working software at the end of corporate software development. Steps will most likely include discovery, requirements gathering, design, screen mockups, project planning, development, and testing.
Business Continuity: As multiple people will be working on your project, the knowledge of your business and application is shared across multiple people. Most professional software companies also insist on documenting requirements and design with drawings and specifications.
This means that if a particular developer changes jobs, that knowledge is not lost. It is easy for new members of the development team to pick up where they left off.
Accountability: There is more accountability for your project when outsourcing vs. hiring in-house. If you encounter personality or performance issues, you can escalate the matter to managers or the owner of the company to get the matter resolved.
Cons of Hiring a Software Firm
Cost: Outsourcing vs. hiring in-house could be more expensive in the long run. There are benefits to this, however. They have to factor in the cost of doing business, management, employee benefits, etc. Software firms also don’t short-cut the process like a software developer might.
They will complete requirements gathering, designs, project planning, resource planning, status tracking, testing, and issue resolution. Conversely, a developer typically just develops.
Turnover: Turnover is a normal part of considering whether to hire in-house vs. outsourcing. Developers are in high demand and typically change jobs every 1-2 years. Your project may see one or two developers transition.
Although it is not ideal, good management and processes can smooth over these bumps. It’s a less serious situation than losing the single developer responsible for the entire project.
Ownership: Working with people who truly care about your project is important. Not all software development firms get invested in your business and your product as they should. This can vary from company to company or based on the size of the firm.
Technologies: Some software firms center themselves around a particular product, solution, or technology. A single corporate software development project can rarely solve all problems. You want to make sure that the solution being proposed makes sense for your needs.
At SOLTECH, we want to help every software project begin on solid ground. In The 5 Pillars Of A Successful Software Project, we share the essential ingredients of every software project. Grab your copy below.
You can also contact our team to schedule a consultation.
FAQs
What skills should I look for when hiring an in-house developer vs. outsourcing?
When hiring a software developer, look for strong coding skills in relevant languages, problem-solving abilities, and experience with frameworks/tools your projects require.
Which is more cost-effective: hiring a software developer or a software firm?
It depends on your deliverable. Hiring a software developer is often more cost-effective for small, ongoing projects needing specific skills. A software firm is better for complex, large-scale projects requiring a team with diverse expertise, project management, and faster turnaround.
What are the main differences between hiring a software developer and a software firm?
Hiring in-house vs. outsourcing provides a dedicated individual for your project, offering flexibility and often lower costs. A software firm offers a team with diverse skills, structured workflows, and resources for complex projects.
When should I choose a software development firm over a freelance developer?
If you’re looking to complete a more complex corporate software development project, a firm may be the better choice. This is because firms typically handle end-to-end development, while developers may need more management and are ideal for smaller, focused tasks.
