All kinds of businesses are going online today, regardless of whether they are big or small. According to statistics, a considerable percentage of personal small businesses make their sales online. And those companies that have already made their digital transition are trying their best to expand significantly year after year.


Obviously, every business owner is focused on making their venture prosperous and growing. Deciding to go online can really bring you benefits and profits. However, every company that is looking to build its own online project faces a difficult dilemma: in-house development vs outsourcing. After all, the final result will depend on the choice made. 

It is important to remember that launching any IT product is a complex and time-consuming process. There are many factors to consider in order to make the right choice. First, you need to know exactly the amount of resources and time you have. It is also important to consider the features of the product and its wide or narrow focus. Nevertheless, there are also many other important criteria that you need to think about when approaching web development or app development.

In this article, we’ve compiled detailed information on comparing in-house development vs outsourcing and detailed the pros and cons of each approach. Let’s go!

In-house development

Let’s first turn to in-house development. Basically, this approach covers web or app development that takes place exclusively within a company. Employees who already work there are involved in this process, or a new team can be hired into the staff. The success of this venture depends solely on the business owner and the efforts of their team. Now, what are the pros and pitfalls of this approach?

In-house development vs outsourcing: the in-house approach has more drawbacks than pros.

 

Advantages

• Corporate employee engagement

By choosing in-house development vs outsourcing, you may discover a silver lining: your employees are going to be really involved in the task. Naturally, in outsourcing, workers are also highly involved in any project. But the in-house team may have a clearer understanding: the well-being of the organization depends on the success of the project. The project generates real profit, and just out of this profit, their salaries are paid. As a result, the in-house team may be a little more interested in the success of the project.   

• Rapid processes

All employees are located in the same mobile app development companies and often in the same offices. This provides an advantage: communication within the team and document flow is slightly faster than in outsourcing. Fast communication might be aided not only by the lack of distance but also by the absence of cultural and language barriers. In 2022, though, these “barriers” are no longer such an insurmountable obstacle.  

• Control and security

All employees of the company fall under the direct supervision of the business owner. If any of them perform their duties in an irresponsible manner, you are more likely to notice it sooner. In that case, you may resolve the problem by applying some kind of sanction. However, the same is true of outsourcing. It’s just that communication about any problems with the work process is done through the project manager. 

In addition, all members of your in-house team are required to comply with your company’s security policy, which avoids the unpleasant outcome of an unintended information leak. Data security in outsourcing is also controlled, only by the contract, not by an internal company policy. This contract is called an NDA (non-disclosure agreement) and it ensures that the person or organization that accessed the confidential information has no right to disclose it. Violation of an NDA has many legal consequences, including lawsuits and financial penalties. Therefore, a company that enters into a nondisclosure agreement is more legally protected from leaks.

And now it’s time to address the shortcomings of this approach. Surprisingly, there are quite a few of them.

Disadvantages

• The resource-consuming nature of building and maintaining internal processes

To have a high KPI for your employees, you need to have a highly qualified team of managers on staff. To be successful, your team needs strong and qualified leaders. Without well-functioning adjustment of work processes at all levels, productivity drops drastically.  

• High cost 

Every winning project needs employees who are highly skilled. They work more efficiently, do not ask too many questions, and provide very good results. However, such personnel have a fairly high price tag on the labor market. Of course, it is possible to train your own specialists from the very beginning. After all, it is much cheaper to recruit a team of not-too-experienced workers. Yet in the long run, this option can be unprofitable, and sometimes there is simply no time for it. In any case, you will have to pay your team even for downtime due to factors beyond your control, which is also a rather unpleasant loss of profit.    

• Brain drain

There are often cases when specialists, having received the necessary level of qualification, decide to leave for another company. As a result, your business loses not only a valuable employee but also the money invested in their development. What’s more, the popularity of employees leaving for other places is steadily escalating. For example, based on statistics, employee turnover in the U.S. in 2021 was 443%, which is a 28% increase from 2018.   

• Lack of niche specialists

Sometimes mobile app development companies need experts in a very narrow field that may be lacking in the job market. In addition, the cost of their work is often very high due to the high demand.  

• Recruitment team expenses

And here we have come to the last but not the least point. Finding and hiring each specialist is a long and often expensive process. In order to recruit staff effectively, you should have an entire team consisting of the following qualified professionals: a recruiter, an HR manager, and a company guide who will bring the new employee up to speed and answer their questions at first. All of these specialists are usually costly. Likewise, each of them would require the same benefits that all of your company employees have: insurance, paid sick leave, maternity leave, and regular leave. As long as you expect your project to succeed, however, it will be an unavoidable expense.

Of course, the hiring process very much depends on the size of the company. Some startups don’t need to hire a staff of recruiters at the beginning of their journey when they can search for employees on their own. However, it can also be an expensive and time-consuming option.

Outsourcing

Next, let’s look at the other side of the coin – outsourcing. This approach consists of not hiring a new team in your company to perform this or that project but delegating this project to an experienced and qualified team of programmers, who are able to perform the task quickly and efficiently. And now let’s discuss in detail the pros and cons of this approach.

In-house development vs outsourcing: seeking help from the outsourcing team is the right thing to do.

 

 Advantages

In fact, all the pluses of this approach inherently follow from the drawbacks of in-house development.   

• A ready-made team of professionals

When you choose to outsource over in-house development, you don’t have to worry about recruiting and hiring a whole HR department. In addition, there will be no need to look for hard-to-find niche specialists. Most likely, the mobile app development agency you turn to will allocate the professionals you need, who are well-versed in the required topic.  

• No time-wasting in processes building

As mentioned earlier, by turning to a mobile app development agency, you get a ready-made team of skilled specialists. In this case, all the nuances of work processes and communication between the team members are already set up. You will not have to invest in maintaining a normal psychological climate in the team. And according to the report, the psychological climate of the staff directly affects its overall performance. Opting for outsourcing, you should not need to regulate the relationship between employees, and arrange corporate events and other events that contribute to the maintenance of employee performance. Other people will be responsible for this.  

• Reasonable price

It is much cheaper to apply to an outsourcing company for help with app development or web development than to hire your own team of specialists. In addition, there might be fewer surprises in the price and deadlines: the outsourcing company will try to make an accurate estimate of the cost of the project and the terms of its implementation. When you are dealing with an in-house team, such analysis is a bit more difficult to conduct. 

Certainly, it is important to remember that development is a very complex process that requires the consideration of many factors. So deadlines can shift in both approaches. Yet, an outsourced team with extensive development experience will be able to make a slightly clearer guess about the timeframe for launching the project.   

• No need for in-depth knowledge

When you are involved in app development, you need to first understand the problem your app is going to solve as well as the topic of the project very well. However, when your business decides to resort to mobile app development services, you may find a very unexpected benefit. The outsourcing company will help you fully understand the topic, explain it in simple terms, and help you define specific requirements for the project.  

• Management delegation

All communication with the outsourced development team goes through the project manager. The PM communicates your requirements and requests for the app or web development to the team. They manage all the internal processes and make sure that the work is done on time.  

• Simplicity of understanding

In essence, a project manager of any mobile app development agency is an interpreter from the technical language to English, explaining complex technical processes in plain terms. This approach ensures that you fully understand the progress of app development.  

Disadvantages

However, there has to be a fly in the ointment. And there is, although it is a very small one.  

• Delayed response

Technically, you don’t have direct access to the people who are working for you. Often they are located in different places, and communication with them happens through the project manager. So it may take some time before the outsourced team receives clear instructions from the PM and starts working on the project.  

• Lack of confidence

The absence of face-to-face supervision and communication can result in a lack of trust during the app or web development.

However, all the issues of the outsourcing approach are solved by choosing the right partner. That’s why Brivian is worth being your option. Our reliable outsourcing development team will help you create a successful and profitable project for your business. If you have any questions related to app development or web development, please contact us. To do this, leave a request at the end of the article or here.  

Hybrid approach 

There is also an option that allows you to avoid the dilemma of in-house development vs outsourcing: the hybrid approach. It consists of delegating part of the tasks to mobile app development services, and the other part of the tasks to your in-house team. 

In-house development vs outsourcing: the hybrid approach can allow them to be combined.

 

Advantages

• Sensible price

This approach will save you more money than a full in-house development. However, you are still going to spend more than you would if you outsourced.   

• A versatile project approach

Allows you to approach the realization of the project from different angles, to delegate some individual difficult tasks to more suitable and qualified specialists in outsourcing.  

Disadvantages

• Energy-consuming for the business owner

This approach is rather hard to perform because it requires a lot of control from the business owner. At the same time, you need to monitor not only the in-house team but also communicate with the project manager, controlling the outsourced team.    

• Takes a lot of time to implement 

Moreover, it requires a very thorough evaluation of all stages of future product development in order to understand which can be delegated and which can be handled by the in-house team. Such a comprehensive evaluation can take quite a considerable amount of time. Most likely, you already have a clear understanding of all the stages of your upcoming project, but this approach is typically preferred by large companies with a huge team of managers. If you have a small business or a startup and a precise idea of what you need, it would be better to turn to an outsourced team to bring the product to the market in the right time frame.

To draw the bottom line, the hybrid approach does not contain the necessary benefits to really make a choice in its direction. Therefore, it is still better to decide for yourself the dilemma of in-house development vs outsourcing. Choosing one of these approaches instead of trying to combine them is the safest option.  

In-house development vs outsourcing: in practice

Let’s look at the real experiences of startups that have relied on one of these approaches. 

Which companies have turned to outsource? Surprisingly, there are quite a number of them, and they include many successful businesses.

For example, Skype, which is known to almost everyone, began its path without its own team of developers. Its software part was done by an outsourced team from Estonia. 

Since its creation, MySQL has been practicing the strategy of hiring outsourced employees.

Opera Software often resorts to an outsourced development team to develop and improve its product.

On the other hand, there are also startups created by companies that have decided not to turn to mobile app development services and have chosen the in-house development approach.

For example, the Beijing-based company ByteDance developed the world-famous TikTok video service. The history of this company began with the creation of the news and information application Toutiao in August 2012. Now, thanks to the great efforts and high qualifications of its employees, the company is one of the “big five” Chinese Internet giants.

Another example of a startup created by in-house developers is Airbnb. Two designers-developers from San Francisco spent an incredible amount of time and effort designing and developing their project. They made amazing decisions to generate startup capital by selling breakfast cereals with campaign slogans for the U.S. presidential candidates and attracting investment. Now, after a long, thorny road to success, it’s a big company with in-house developers working all over the world.

In-house development vs outsourcing: which approach does your business need?

Based on the real experience of startups, we can see that in-house development is ideal for large product companies, i.e. companies developing their own product. Usually, such companies are founded by technology experts with great experience in web development and app development, as well as good networking. It allows them to invite strong developers with good expertise to their staff. Such companies usually rely only on the strength of their in-house developers. 

Outsourcing, on the other hand, is suitable for the rest of the business: whether it is a design and tailoring studio, a pet store, or a consulting company. When your business isn’t ready to set up its own large development, testing, and operations departments, it’s much faster and more profitable to seek help from professionals.

In-house development vs outsourcing: different types of businesses require different approaches.

 

To sum it up

In other words, if a business owner is ready to spend a huge amount of time, effort, and money on creating a startup concept, developing it, finding employees, and managing the team and processes within it, then in-house development is their choice. However, it would be much easier to delegate all of this to professionals with extensive experience, a well-prepared team, and good expertise.

Brivian can help you develop a project that fully meets the needs of your business. Contact us and our experienced outsourcing team will answer any questions you may have. We’ll provide an accurate cost estimate and discuss your project deadline. Rest assured, Brivian is your reliable and most profitable option.