Software Development: When is it Better to Outsource?

Software Development: When is it Better to Outsource?
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Technology and business are inseparable; the only question among most business owners is how best to implement that technology in the most efficient, cost-effective manner. Do you build up an in-house IT department or farm out the work to an independent development company? The answer to those questions depends primarily on two things: cost and commitment.


Of course, cost is almost always going to be a factor in making decisions about resource allocation, especially if you own a startup or a mid-sized business. However, even large corporations must take ROI into account when looking at the big picture, and that is one of the biggest advantages of outsourcing. Due to lower overhead and the availability of a large, specialized labor pool, overseas software development companies can keep the cost of doing business low and pass the savings on to their clients. Many times the cost of outsourcing IT services can be as little as 25% of the expense of creating an in-house team, and you’ll receive the same level of quality.

The downside of cost for in-house development depends on whether you have the talent already on-board or you’re constructing an IT team from scratch. If you already have techs on the payroll, will expanding their duties take away from other projects they’re working on? If you’re considering expanding your workforce to include a development team, can your company handle the additional expenses like payroll and health insurance for a new department? Will your new app generate enough revenue to make it worth the investment? On the plus side, having an in-house IT team means that you have your developers at your disposal; an outside team will typically be in a different time zone, which may cause logistical problems related to scheduling consultations or getting timely information.

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Another way to make the decision to outsource is need. Are you development needs ongoing, or are you planning one or two small projects? If your company is in a tech-heavy industry or your development needs are continual, it may make more sense to have your own team on-site. However, if you’re looking for a developer to create a specific app or you only need IT services occasionally, outsourcing is the better choice. Time is also a factor that has a direct bearing on cost and outcomes. Outsourcing a one-time project will often give you a faster turnaround time and lower your expenses on all levels.


The second consideration is commitment. A good development company should always be committed to your success; their reputation depends on it. But, they may not have a vested interest in the long-term health and efficiency of your company like your own team will. However, if you have several software development projects in the works at once, an outside company will be in a better position to assign dedicated personnel to each. Your own team will often have to contend with unrelated office issues or divide their energies, with the unforeseen consequence of sacrificing quality overall. On the flip side, an in-house development team will have a more intimate knowledge of your company, its goals and values.

Before you consider outsourcing your software development, ask yourself and your associates at all levels of management the following questions:

  1. Is this a necessary expenditure?
  2. What are our reasons for making this decision?
  3. Will not making this decision affect our business now or in the future? In what ways?
  4. What is our level of risk for choosing an outside team? Is it more or less the same as the risk of not doing so?
  5. How much risk is an external team incurring? Will the relative success or failure of this project be enough of an incentive for them to give it the same level of commitment?
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The bottom line is, the decision to outsource or remain in-house depends on your budget and goals, both long- and short-term; sometimes the answer is somewhere in the middle. One solution to issues like differences in culture, geography or context is to hire a project manager who’s familiar with your company and with the corporate climate and culture of your developer. That way, you’ll have an objective facilitator who can clarify communications on both sides and spot potential conflicts before they become major issues. This will also free up some of your time and focus to attend to core business interests.

If you’re looking for an established, reputable business to take care of your software development, the this software development company is a perfect choice. This company develops custom software applications for sectors as diverse as healthcare, eCommerce and government. In fact, more than half of their customers are North America businesses. They offer great customer support services and a range of development solutions at reasonable rates.

Author Bio: Priya is a works with Travel app development company