The Pros & Cons of Outsourced Software and Application Development

Should you hire in-house developers, or should you outsource them? This single question has haunted nearly every tech company at some point or another in their software development journey. Hiring in-house developers may seem costly, but outsourcing development comes with its own set of issues, such as quality concerns, collaboration issues, and time zone constraints.

Even so, the development outsourcing industry is booming. According to Statista, the global contract value of IT outsourcing is nearly $62 billion dollars, and software/application development is the most commonly outsourced service in the world.

Like anything else, though, there are always drawbacks. In this article, guest authored by Nikunj Shingala at, we’ll evaluate the pros and cons associated with both approaches – in-house software development versus outsourced software development.


The Prods & Cons of Outsourced Software and Application Development

Authored by Nikunj Shingala of

Outsourced IT development is souring in popularity for a number of reasons. Let’s take a look at some of the pros and cons associated with outsourcing…


Pros of Outsourced Development
  • Cost efficiency 

Affordability is undisputedly the biggest benefit of hiring dedicated developers overseas. Outsourcing development to countries where cheap talent is available is cost-efficient for companies in the US and elsewhere.

In fact, in some regions, outsourcing development saves up to 50% of the development cost. This means organizations can invest more resources in building better and improved versions of their software products and applications.

  • On-demand Commitment 

One of the major advantages of outsourcing for a company is that they can hire a dedicated developer on-demand. Most outsourced developers agree to work on a project basis which means a company doesn’t have to engage a resource for long-term. This saves retention costs and allows organizations to hire different resources as per the project requirement.

  • High Levels of Productivity 

Believe it or not, office distraction is one of the major causes of low productivity levels in employees, when you hire a dedicated developer overseas, you can be assured that he/she works on the job with an undivided focus which enhances productivity. Overseas developers charge for actual work done which means organizations get more by paying less.

  • Minimal Workforce Management 

Companies need not focus on managing the workforce and imbibing a streamlined corporate culture across their offices when they hire developers overseas. This saves a large amount of time and effort in building a separate department for human resource and workforce management.


Cons of Outsourced Development 
  • Quality Concerns

Many companies and entrepreneurs stay away from hiring a dedicated resource overseas because of quality issues.

As the resource is present elsewhere, there is little or no control over the quality of work delivered. Many outsourcing agencies have standard portfolios which make it hard to gauge the abilities of an individual developer.

How to deal with quality concerns:

    • Get in touch with a local consultant in the region for a test project
    • Conduct a technical interview for all the developers who will work on your project
    • Be diligent and personal in your interview process to ensure you hire the one you are interviewing
  • Collaboration Problems

The biggest problem companies face with outsourced development is collaboration. Collaborating with an overseas team is a huge challenge due to the difference in work culture and processes. Sometimes, developers don’t understand your expectations until you explicitly specify what you ought to achieve.

How to deal with collaboration problems:

    • Create a detailed project requirement document and share it with developers
    • Hire a dedicated developer who is proficient in using Scrum methodology
    • Ask if the development partner has transparent communication policies
    • Use modern project management, collaboration and communication tools
  • Time Zone Challenges

One of the major challenges of hiring a dedicated developer in a different country is associated with the time zone difference. You don’t want the developers to compromise on their commitment and dedication to quality because they must wake in the middle of the night for a project meeting. Often overseas developers try to balance this out, but still, communication can get slower because of time zone difference.

How to deal with the time zone challenges:

  • Hire a local project manager for mediation and coordination
  • Search for development teams with country-specific project management support
  • Work with offshore developers with 24-hours collaboration support


In-house Development: An Efficient, but Costly Endeavor?

In-house development involves hiring developers on your payroll to achieve your development goals. This means that you will have to pay for full-time engagement along with several mandatory perks according to your local laws. Here are the pros and cons of hiring an in-house developer.


The Pros of Hiring In-House Developers
  • Focused & Committed Team of Developers 

An in-house developer promises more focused commitment towards your organizational goals. Because he is being paid by you full-time, there are fewer chances of him/her working on other projects simultaneously. Also, he has vested interests in the success of your organizations, which make him more committed to his job.

  • Aligned Interests 

An in-house developer has the same interest as your business. This means that if you succeed, it would lead to his/her success, too. Remote developers are more focused on delivering the final project without the impact on the outcome, which sometimes can lead to a conflict of interest.

  • Quality 

When you have an in-house team, you have total control on the quality of work being done. You can add quality assurance processes to the workflow, ensuring that the work done follows the outlined quality standards. Also, in-house teams are more focused on maintaining quality standards owing to the risk of poor performance.


The Cons of Hiring In-House Developers
  • Higher Costs

Having a dedicated team on full-time payroll has its downsides. The biggest one being the cost implications of having an in-house team. Most US companies have to pay millions of dollars every month even without an active development project.

  • Complex Hiring Process

Hiring full-time staff requires the development of a structured hiring process to screen candidates. At the same time, you need to have easy on-boarding and workforce management processes owing to compliance requirements. Talent acquisition is one of the biggest challenges for a firm as wrong hiring can cost hundreds of dollars. This makes in-house staffing a less attractive option for entrepreneurs who prefer lean approach.


Wrapping Up 

This blog covered the major questions associated with hiring in-house developer vs dedicated developer overseas. While the decision should be taken on a case-to-case basis and the organizational requirements, still, hiring dedicated developers without building an in-house team seems the best bet in a dynamic business environment. Outsourcing your app development requirements reduces costs and ensures you can hire dedicated talent based on your specific requirement.


Author Bio

Nikunj Shingala is the CEO and co-founder, a company delivering services in the realms of UI/UX design, web development, mobile app development, and other enterprise solutions. He’s an enthusiastic blogger, and his writing interests include mobile and web development technologies, business startups and other business strategies.

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