In-house tech teams vs. outsourcing: Which is better?

A good development/technical team is something that all businesses need. Whether you’re an established company that wants to maintain its digital infrastructure or a startup developing the next big app, a good technical team is a must.

Not so long ago, this was something that only startups and tech companies need. Now though, with digital technologies being adopted at a wide scale, it’s something that all businesses need. So, the question here isn’t whether you need it or not, it’s about the best way to fulfill this need.

In most cases, companies either have an in-house technical team, or they outsource the work to a development agency. Sometimes, partnerships can be formed, which is common for startups. While all of these solutions work, not all of them will work in your particular situations.  

In this post, we’ll highlight the pros and cons of all the options, so you can choose the arrangement that works best for you.

1) Creating an in-house team

Having an in-house means that they work directly for you. They are your employees and are fully dedicated to your project. While it’s almost always good to have a dedicated technical team, it’s an option that comes with its own disadvantages.

Pros of having an in-house development team:

a) Full dedication to your projects

Being a part of your company, your in-house team will dedicate 100% of their time to your projects. They are always available and ready to carry out whatever tasks you assign to them. Since you don’t have to wait for your in-house team to be available, you can expect a faster turnaround time.

b) Better collaboration

Since the in-house development team usually works in the same place as your other departments, they can collaborate better on different projects. People from your design team, development team and even sales and marketing if needed can easily arrange a meeting. This tends to make collaboration better between different departments easier and makes it easier to coordinate different projects.

Cons of having an in-house development team:

a) Costs more compared to outsourcing

This is a major downside that’s associated with having your own in-house development team. Since you need to hire most of your developers as full-time employees, this tends to be a costly solution. In some cases, the amount of work you’ll have for them isn’t enough to justify this cost. Unlike with outsourcing, you’ll have to continue paying your developers, even if you don’t assign any work to them.

b) Hard to find the right talent

Good technical talent tends to be expensive, in addition to being hard to find. If you decide to create an in-house technical team, you’ll need to spend lots of time and money on finding and hiring the right staff.

2) Outsource to a development firm

In most cases, outsourcing to an external technical team is the best thing to do. When you do this the right way and work with a good development agency, you’ll get the best result for the least amount of money, compared to an in-house team.

Pros of outsourcing to a development agency:

a) Better value for money

When you’re outsourcing to a development agency, you get things done for every Euro you pay. When you have work, you hire a good agency and pay them to get it done. When you don’t have new projects, you don’t pay for anything.

b) Easier to scale

Hiring someone full time is a major decision, especially for a small team. Once you sign that contract, you’re committed to that person for a relatively long period of time. If you have a sudden work surge, you’ll be in a difficult situation. Your in-house team is not big enough to handle the extra work and you can’t hire full-time staff based on a temporarily need. With an agency, you can scale as you want without having to worry about this.

Cons of outsourcing to a development agency:

a) Hard to find the right agency

Finding a well-qualified agency that you can trust with your projects can be difficult. This is a major hurdle that’s associated with outsourcing development work. Once you find the right agency and get familiar with how they work, this shouldn’t be a problem.

b) Risk of not receiving future support

No matter the type of software that you’re developing, it needs frequent maintenance and support. While you can always assure that your in-house team will provide all the support you need, you can’t be that sure when you’re outsourcing. That’s why you need to cover this point with the agency you’re outsourcing to.

3) Forming a Partnership with an Agency

This approach works well for startups. When you partner with an agency, they develop your software at a discount in exchange for a share in your startup.  

Pros of agency partnerships:

a) Special rates and benefits

When you form a partnership with a development agency, you get special rates for the entire development process. In addition to that, you get other benefits like free maintenance and prioritizing your work. This differs from one agency to the other, so you should ask about the details.

b) Valuable expertise without the added cost

By forming a technical partnership with an experienced agency, you make the most out of their expertise, at a minimum cost. They have developed several similar products before and can help you do the same.

Cons of agency partnerships:

a) Potentially different work culture

While the agency you partner with is your technical partners, it’s not really a part of your company. It might have a work culture that’s different from that of your startup.

b) Not a permanent solution

While partnering with an agency can help your startups take off at minimal cost, it’s not a solution that can last forever. When your startup grows to a certain point, you’ll need to start hiring in-house staff.

Conclusion

There are many ways in which you can have your software developed. Each has its own unique pros and cons. The development method that’s right for you depends on the type of your business and your specific business needs.