In-House Development vs Outsourcing – What to Choose?

With the current ability to recruit from anywhere in the world, startups often think about how best to assemble a team. It’s always a challenge to decide whether to prefer in-house development or outsourcing. Every kind of development has its pros and cons, so you can not be unequivocal about it. The choice also depends on the capabilities and goals of startup companies. Thus the theme “in-house development vs outsourcing” needs thorough analysis. And that is what we will cover together in this article. 

What Do In-House Development And Outsourcing Mean?

In-house development is the process of development with the people you have chosen on your own. It can look similar to regular staff hiring. That is the way you choose every member for your future team, give him personal tasks, and evaluate every performance personally. In-house development equals building a company from scratch. 

Outsourcing focuses on hiring external sources to create your product or perform some specific tasks. It is a chance to meet new professionals from around the world. You can hire a whole team or even one person to get the job done. It usually suggests online communication and work processes. 

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What Is The Difference Between These Two Definitions?

Although at first glance product development may not depend on the type of development process, these processes still differ. Here are the differences between in-house development and outsourcing.

  • While using in-house strategy, you assign for the task someone from your team and even yourself. Outsourcing stands for assigning external sources. For example, you can hire a marketing agency to conduct your marketing campaign. 
  • In-house is performed only within your company while outsourcing goes for outside ones. 
  • In in-house development, you take full control over the tasks. But outsourcing provides only partial control over operations. 

When Is The In-House Development A Good Fit?

The choice of development path depends on many factors. It is based on the type of company, the type of your client, the budget, and the business plan. And when you analyze all these factors, you will be able to choose the most suitable option. Choose in-house development when you want:

  • To invest a big part of your budget. 
  • To perform a unique project with your personal preferences and features.
  • To provide your team with the work and stability.
  • To solve all the issues quickly and in real-time.
  • To control every detail of the process.
  • To get a high-quality product.

When Is The Time To Outsource Workers?

Outsourcing development may seem a bit complicated. For this path, you have to consider hiring new people from other companies or even the whole agency. It might also be risky as you meet them for the first time in your life. But if the following statements sound suitable for you, don’t be afraid to outsource resources. 

  • You have a limited budget. 
  • You don’t need to control everything in the development process.
  • You don’t have the right developers in your team. 
  • You are out of time and you want to do everything quickly. 
  • You have a business whose main focus is not software development. 
  • You want to hire specialists with a solid background.
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When Is The Time To Outsource Workers

Pros and Cons of In-House Development


  • You will have total control over the process. It is always easier to follow the development process when you can be in touch with every team member. You can see the progress and the way your workers are doing the job. 
  • You will have a better understanding. If your team is working from abroad in an online mode, it is impossible to see all the needs. But working with the team offline, you can easily spot what people need to be more productive. 
  • You will explore your workers’ talents. Developing a new project is always a chance to see your workers’ skills. Many of them will be inspired by new tasks and will perform them in a better way. 


  • It demands more investment. Since you will be hiring the team yourself, you will need to provide all the additional costs. The expenses include office supplies, days off, vacation days, insurance, and other types of expenses. 
  • It takes more time. When working for the in-house approach it is quite hard to predict when the work will be done. Thus the process might take more time. 
  • It demands constant improvement. As technologies don’t stop developing, it will be your duty to educate your team.

Pros and Cons of Outsourcing Software Development


  • You will spend less money. The price for the same work can differ in different countries. And that can reduce the amount you plan to invest in product development. 
  • You will save more time. With the outsourced resources, you can set strict deadlines and get the work done in a specific time.
  • You will get new ideas. Outsourcing is always a chance to get different views on the product and its development. 
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  • It limits communication. Outsourcing refers more to remote mode than to offline one. And communication via screens is not as straightforward as in real life. 
  • It is risky. Hiring a new team from abroad is always risky. You can’t control the workers following all the security rules. 
  • It might cost you good quality. Paying a worker $20 and $50 will never equal the same quality. 

What Are The Prices?

The prices for an in-house type of development are quite higher. Even if your developers work from home, they will charge from $100.000 annually. The price also depends on the country you are living in. The prices in the US are quite higher than in Europe. Outsourcing will cost you less. Depending on the country, developers want to be paid from $20 per hour to $100 per hour.

Are There Any Risks In Both Types Of Development?

For an in-house one, you can face the following risks. You can spend more than you planned; you might have to dismiss unqualified workers; you can lose a lot of time; your productivity might be less, and you will have to always control everything. In the case of outsourcing, the risks might appear when hiring new unknown people; entrusting important data; facing new cultures. 


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