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Hiring a Software Developer vs. a Software Firm: Making the Right Choice for Your Organization

There are several ways you can go about developing custom software  for your business. The two most common options are hiring a software developer and hiring a software firm.

There’s not a clear-cut, right-or-wrong answer when it comes to the choice of software firm vs. developer. It depends on unique factors — 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.

Hiring a Software Developer

Pros of Hiring a Software Developer

Availability: There are a lot of software developers out there. You most likely know someone who knows someone who is a professional software developer, so finding a developer is not hard. That’s a key point to consider in the software firm vs. software developer debate.

Cost: Many of these individuals are 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.

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Collaboration: Working with your own personal developer can be great. You get one-on-one interaction, 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 developing your software.

Cons of Hiring a Software Developer

Required Skillsets: Software development is 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. Not all developers have that expertise. Some only know web or mobile. Some only build the screens and some stay strictly to the back-end logic.

If you hire a single developer, you may run into limits of what they can do for you. In the software developer vs. firm debate, skillsets are a key differentiator.

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.

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Process: Your developer may short-cut steps 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.

They are interested in getting code in your hands and completing the project. While this saves you on project cost initially, it may create difficulties as your application grows and you need to add on new people.

Quality: It is hard for a person to both build and test their own work. Also, when you work alone, there is little collaboration on the best way to do something. Problem solving becomes 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: Your developer will need management by you. This may mean 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. Managing a software project is a time-consuming task. You will need to take on this responsibility internally or hire someone to do it for you.

Business Continuity: At its worst, contracting with a single person 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. You will need to hire another developer — or a software development company  to take over the project and come up to speed.

Hiring A Software Firm

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.

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Quality: Software development firms follow set processes for developing software. These processes allow for the company to repeatedly deliver quality software 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 the project. 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 working with a software firm. 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: Software firms will be more expensive than hiring a developer directly. 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.

This is a good thing in the big picture. However, your project will cost more in the short term.

Turnover: Turnover is a normal part of the software business. 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.

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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. It is rare that a single technology can solve all problems. You want to make sure that the solution being proposed makes sense for your needs, and the software firm is not trying to fit your square project into their round solution set.


There you have it. Software development can be complicated. It takes the right people with the right processes and skill sets to create software that gives you what you want and that can last.

When evaluating your options, consider more than just cost. Overall quality and final results are incredibly important. There have been plenty of companies successful with both models. It just depends on the project and the developer or firm you choose.

The 5 Pillars Of A Successful Software Project

We want to help every software project begin on solid ground. In The 5 Pillars Of A Successful Software Project, we share the five essential ingredients of every software project.

You can grab a copy of the guide below and share it with your team!


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