In-house vs Outsourcing vs a Hybrid Approach

By Kathryn Haring - October 31, 2020

Ready to build software or applications for your business? There is a question you must ask yourself - should you use an in-house team or outsource your software development? There are pros and cons to both sides – and there is not a universal answer.  

IN-HOUSE SOFTWARE DEVELOPMENT 

In-house teams are an internal team that belongs to the company. Generally, these are trusted people that understand the culture, rules, and regulations within the business. The in-house team is the group of people you hire one by one to your office. You might hear the phrase: “If you want to do something well, do it yourself”. If this is your motto, the in-house team will suit you. In this case, you will look for specialists, make interviews, ask questions and control all the processes of hiring and work. The drawback is that this team is not as specialized as an outsourced team in different areas. 

Reasons to build an in-house team: 

  • Exclusive focus on your product 
  • No language/cultural boundaries 
  • In-project expertise 

There are several disadvantages, too: 

  • Huge, inflexible price 
  • Staff turnover costs 
  • The lack of expertise in different areas 

OUTSOURCED SOFTWARE DEVELOPMENT 

While in-house development has its perks, there are some drawbacks that an outsourcing strategy can work around. Outsourcing software development involves contracting with a company or independent contractors to produce your product or specific aspects of it. This strategy adds a lot of flexibility to your organization, allowing you to quickly add or remove different functions as your product’s needs change. However, outsourcing does have its own drawbacks related to the transience of your relationship with your contractors. It can be challenging to find talented tech specialists that are experts – especially when you need a product asap with special features. This is why there is an increase in companies turning to outsourcing.  

Advantages: 

  • Price-wise expertise 
  • Smart time-to-market 
  • Easy scaling of flexible teams 
  • Streamlined processes 

Disadvantages: 

  • Difficult to align goals 
  • Transparency and security risks from rapidly changing personnel 
  • Risk of poorly documented code that is difficult to support 

HYBRID APPROACH 

If you can’t pick a winner between in-house development and outsourced contracting, consider this third option. The hybrid approach is a combination of on-site and outsourced software development. From the initial idea to the product launch, there are several stages where in-house specialists can provide more value, but certain tasks can be reliably left to cheaper outsourced providers. 

Advantages: 

  • Impeccable project organization 
  • Optimal costs 
  • Maintains flexibility while still building in-house expertise 

Disadvantages: 

  • Splitting responsibilities can slow development 
  • More complicated to organize 

HYBRID VS IN-HOUSE VS OUTSOURCING SOFTWARE DEVELOPMENT: COMPARISON 

 

 
 

In-House Development 

Software Outsourcing 

Hybrid Approach 

Costs 

High 

Lower, depending on the outsourcing team you choose 

Cheaper than in-house, more expensive than pure outsourcing 

Expertise 

 
 

Narrow 

Extensive expertise in various fields 

Extensive 

Speed 

Low 

High 

High 

Quality 

High, meets the expectations precisely 

High 

High 

Security 

High 

Lower but can be improved with the help of NDA and similar agreements 

Lower but can be improved with the help of NDA and similar agreements 

Management 

Well-established processes and seamless communication 

Less manageable but depends on the outsourcing team you choose 

Complicated as it requires handling both in-house and outsourcing team issues 

Recruitment and Hiring 

 High
 

Addressed by yououtsourcing partner 

In-house team recruitment requires your time and resources, and your outsourcing partner provides you with a complete team. 

 

At GST, we use a hybrid in - house/ outsourced approach to software development. We believe it not only gives us a unique advantage over our competitors but also a diversified perspective and allows us to maximize quality assurance and company organization. Our full stack agile development teams are staffed in a flexible manner to plug-n-play specialist skill sets in order to achieve maximum productivity at minimal payroll burden. We utilize flexible full stack agile development teams to outperform in-house new hires by over 30% in shipping high quality and on time product.  

If you were to have just one full stack developer, a typical MVP development cycle would take over one year to execute. Hiring additional internal team members would cost roughly $112K per developer and take over 24 days. In contrast, GST can provide the full development team for your project for an “in and out” price estimated to be 1/3 of the in-house alternative in a shortened timeline with the assurance of an accountable cohesive enterprise experienced team.  

For more information visit www.gstdev.com to find out more details about our services. 

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