Project Setup

Outsourcing or In-house Software Development: Here’s What We Think

In today’s world, it has become increasingly necessary for competitive businesses to upscale their operations. Many times, this upscaling process involves sophisticated software development. However, during the process of software development, business owners often have to decide on whether to utilise an in-house team or simply outsource the project. Luckily, in this article, we will discuss the pros and cons of each option and provide points to guide your decision as a business owner.

Differentiating In-house Software Development from Outsourcing

In-house software development involves developing and deploying software solutions using the experts within your business. Essentially, your employed staff would constitute the team for the software development operations. It is also called "insourcing."

On the other hand, outsourcing requires all software developments to be delegated to an external team. This external team is saddled with all the responsibilities within the project. Many software houses exist for this purpose. For example, a software house like YouDigital provides cutting-edge software development services via its network of highly skilled software engineers.

Pros and Cons of In-house Software Development


  • Culture-fit Team Members

    One upside of in-house software development is that the team members would have already been well adjusted to your company’s culture. Also, they can be easily hand-picked from your overall team. This would ensure significant productivity.

  • Seamless Communication

    With an in-house team, communication barriers are minimal. Also, time zone concerns rarely exist, and team members can directly communicate, allocate tasks and refine workflows. This boosts synergy within the project.


  • Limited Expertise

    Depending on the type of software you intend to develop, the expertise of your in-house team may be inadequate to undertake the project. Proceeding with the project despite this skill gap may be detrimental to quality assurance.

  • Budget Constraints

    Using your in-house team for software development tasks could significantly pressure your budget. This challenge is tied to the expertise problem that was mentioned earlier. Your company would incur considerable costs to hire additional staff. Such costs range from annual remuneration and additional perks like insurance. For instance, the average annual salary for a software engineer in the US could be about $93,000.

Pros and Cons of In-house Software Development
  • Reduced Costs

    One of the most important benefits of outsourcing is that you gain access to a global pool of talent. As such, you can decide to outsource from virtually every territory in the globe. From the cost perspective, this access is highly beneficial. Outsourcing from regions like Latin America, Eastern Europe, or Asia would save you lots of money given that labor costs in these countries are relatively lower. More importantly, in addition to the cost reduction, the quality of your project will be guaranteed.

  • Resource Optimisation

    Software outsourcing enables your in-house teams to focus on more compelling tasks and ensure the realization of your company's goals. In-house software development, on the other hand, could leave them distracted and overstretched. For instance, a software house like YouDigital would leverage its network of engineers to effectively handle your project and deliver promptly. This would ensure minimal micromanaging.

  • Communication Barriers

    Software houses may not be located within your company’s region. This could create communication barriers that are occasioned by time zone differences.

  • Limited Control

    With a software provider, your project control is largely limited. While you determine cogent factors such as delivery time, your control over other factors like workflow may be limited.


Choosing your in-house team or a provider for your software development is mainly dependent on your project needs. However, if you look to save costs and secure your project at a satisfactory date, a software house may be your best bet.

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