In House vs Outsourced Software development

In a growing, post-pandemic digital world, companies are quickly adapting to the concept of outsourcing and using remote workers for key projects. The trend is increasing by leaps and bounds and the motivation behind the practice is developing as well.

Companies used to outsource to countries purely for the sake of cost reduction. And though it’s still the key reason, many software development companies now outsource because that’s how they access top talent who use the latest programs and technology.

Regardless, everyone has different reasons for outsourcing or building an internal development team. This article lays out the pros and cons of both approaches and will help you choose an option that best suits your business needs.

In-house vs Outsourcing

Pros and cons for outsourcing software development

When outsourcing app development, businesses turn to companies and/or agencies that specialize in the field. 

Software development companies — like PURPLE — can offer dedicated design and coding teams who can work within multiple industries. And there are agencies available who outsource on an individual level to assist internal teams. 

Advantages of outsourcing software development

  1. Cost reduction

We’ll start here because it’s the top reason companies outsource their software development. Finding, recruiting, and training qualified — let alone talented — developers is a daunting task that’s both time-consuming and expensive.The key advantage of outsourcing is that you save money that would go towards the recruiting and maintenance of full-time staff. 

  1. Easy to scale

When outsourcing, your partner development company can add or remove team members to meet the needs of your project. This allows you to run things on a lean model and address new features or requirements as they come along.

It’s impossible to achieve this type of flexibility in-house, as you’ve spent time and money to hire and train team members. Plus, constantly releasing and adding team members is bad for morale and your reputation as an employer.

Always set up a flexible system team system with your outsourcing provider to ensure you can scale as the project requires.

  1. Increased time-to-market speed

Once you sign a contract to outsource your app development, the team can start working immediately. When you build a team internally, it’s possible to spend months putting a team together and hiring a specialist to handle custom elements of your app. 

Ultimately, with an outsourced team, you’ll get your product to market much faster.

  1. Tested processes and workflows

Software development companies often provide experienced teams who have worked together on multiple applications within many industries. They’re well-oiled machines with defined workflows that produce high-quality code in a shorter timeframe. 

You also get the benefit of additional roles outside of software development specifically. QA engineers, Scrum masters, project managers, and UX/UI designers are all standard roles in a development team. And when combined, you gain access to a team who draws from their experiences and collaborates harmoniously. 

Not every development company offers this level of experience with their team. It’s good to review the workflow process and collaboration tools a potential outsourcing partner uses before proceeding with your working relationship.

  1. Access top-tier talent

PURPLE and other software development companies and agencies strive to hire certified and qualified top talent. This provides you with access to the most talented developers and designers who have the expertise to create custom software that fits the needs of your business. 

And many of these talented developers have colleagues both within their company and outside to consult regarding solutions and new ideas. This adds value to your investment and gives you the benefit of an entire community of software specialists.

Disadvantages to outsourcing software development

If outsourcing only had positives, every company would choose this route. But there are risks to consider before hiring a software development company. We examine these risks below, but know that you can mitigate many of the risks simply by working with reliable, trustworthy and experienced software developers — like PURPLE!

  1. Low-grade coding and documentation

Priorities change from time to time, causing companies to shift to shift to another development or take a project to an in-house team. But if you’re outsourcing to an inexperienced team, they may present you with poor code and documentation that falls short. 

Trying to transfer workloads in this situation becomes problematic and can add to the cost of a project — especially if the new team has to start from scratch.

  1. Failure of the business

Development companies are just as susceptible to business risks as you are. If your outsourced development company fails or has to reduce its workforce, it will certainly have a negative effect on your project. 

  1. Relinquish some control over the development team

Top-tier development teams typically communicate frequently with stakeholders like yourself. However, it doesn’t change the fact that you won’t be able to control the team as you would with an in-house crew. 

  1. Issues communicating

And on the communication note, there is always the risk that the development team may not communicate well. Time zone differences can also cause difficulties in communication. However, experienced development teams — like PURPLE — always make time to communicate with their clients to ensure everything is on track.

  1. Lack of motivation

For an in-house team, it’s easier to monitor engagement and rally the team when morale is low. But when you outsource, this can be difficult. You can mitigate this risk by working with development companies who assign a dedicated team to your project. 

Pros and cons for using an in-house team for software development

If your company is ready to develop your software product and has the time and money to invest, then building an in-house team is another viable route. You’ll need to source, recruit, and train all the elements of a development team for the project to be successful.
This includes developers, UX/UI designers,  QA and other professionals we mentioned. 

Advantages of building your app in-house

  1. Better fit for work culture and engagement

Internal teams have the advantage of working with the same company for every project. This means they typically understand the needs of the business inside and out and have motivation to deliver an exceptional product — it increases the potential for promotions, raises, and bonuses. Plus, you can address problems immediately.

  1. Increase in communication efficiency

When you and your team work from the same time zone and schedule, it creates streamlined communication channels. Because of this, you’ll avoid misunderstandings, awkward communications, and save time during the development process. 

  1. More agile

Unless your outsourced team has worked on the same project for a long period of time, an in-house team will have more agility. They should be able to alter and add features quickly and eliminate errors and potential bugs with haste.

Disadvantages to building your app in-house

  1. Increased spending

All the advantages listed above are nice but are only plausible if you have the money to spend — and spend you will! In-house development teams are more expensive than reliable, experienced outsourced teams when you account for all the additional costs that go with full-time employees. Think about office space, software and equipment, training, benefits, sick days, etc.

  1. Harder to find qualified experts

All around the world, large and small businesses are looking for top-tier developers and specialists. This makes it difficult to find the right personnel in many areas. Think about businesses in smaller cities. It’s not as easy to hire local developers experienced in using technical programs like NodeJS, VueJS, and more.

In this situation, you’ll have to spend a lot of time and effort recruiting the right person. You may incur additional costs if you pay for a recruiter or offer to relocate a new hire. And even when the new hire starts at a position, it takes time to train and acclimate them to the new work culture and team. 

Outsourcing software projects makes it easier to find these in-demand professionals.

  1. Turnover

Again, software developers are in high-demand. There are a lot of opportunities out there and other bigger fish who might pay more and offer better benefits. It’s not uncommon for developers to move from company to company in search of these perks. And that can have serious consequences for the pace of your development project.

The final verdict: Outsourcing vs. in-house software development

Quality of your application

There’s a reason for the success of many software development companies. They have quality, experienced teams who work together regularly on a variety of projects. This means they have fully developed their workflows and processes and often exchange information between each other about new tools. If you want a high-quality final product, then use the expertise of an outsourced development company.

Timeline to launch

If you’re short on time or just want to get the ball rolling on your project, outsourcing is the way to go. You won’t have to deal with recruiting, hiring, onboarding, training, etc. before they finally get to work on your project. And that’s just the initial process. Efficiency takes even more time. Your new team members have to develop their own workflows and processes. 

Outsourcing gives you access to experience, battle-tested developers who know how to put out a quality application on a deadline. As long as you’re willing to communicate with the team, you’ll definitely get a finished product to market much faster. 

Overall costs

The number one reason companies outsource is to lower their costs. It will always be cheaper than hiring an in-house team because you don’t have to pay for expenses related to full-time employees. You also can scale as you see fit at cheaper rates.


If you can’t decide on whether to hire an in-house team or outsource your app development project, hopefully this article clarified things and provided the key elements to consider. It can be a difficult decision, as both situations have valid pros and cons. Be sure to weigh everything carefully and assess what works best for your business. 

Why outsource with PURPLE?

PURPLE is a team of experienced and passionate IT professionals who provide high-quality solutions for our clients. We can offer your company high-level experience and expertise gained from working with dozens of world-class businesses from a variety of industries all over the world.

We work on a simple model comprising: Communication, Specification, Programming, Quality Assurance,
and Delivery all within a Scrum framework. We know how to deliver high-quality projects on time and on budget. 









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