Should you outsource software development? The pros and cons outlined

It’s not uncommon for businesses to outsource software development— to give the challenge of development to a third party, while the company focuses on other jobs.

Naturally, deciding whether or not to outsource software development involves weighing up risks and benefits. To do so, you’ll need an idea of all the pros and cons associated with having another company build your software.

So, here’s an outline of the pros and cons you need to know.

The pros

·         Reduced costs

Cost savings are one of the main reasons businesses will look to outsource software development.

When you outsource, you aren’t paying for office space, or recruitment, or training, or employee benefits. You aren’t spending your own valuable time on detailed management. You aren’t buying the tools and equipment needed to complete the task.

In the case of outsourcing overseas, you may even benefit from reduced tech and/or labour costs.

All this translates to cost savings.

·         Access to a wider talent pool

When you outsource software development, you get access to a diverse talent pool. You’ll be able to look for and find developers from anywhere — not just those that live locally and want to work for your company.

·         You can focus on your core business

Another pro to choosing to outsource software development is that it means you don’t have to spend your mental energy on it.

Rather than recruiting, training, and managing a development team, you can keep your focus on the other aspects of your business. These may well be skills that you are more comfortable in, or that hold high importance to the company.

In this way, outsourcing can mean greater productivity. You’re getting your software and all your other work done with minimal disruption.

·         Mitigated risk

Another reason to outsource software development is the sense of mitigated risk. This is particularly true if you’re a start-up, or have limited in-house experience.

If you choose a reputable software agency or highly acclaimed freelancer, your dev work is in the hands of people that live and breathe it.

That means they’ll understand the trends, the tech, the best practices, and how to manage the market to give your new software the best chance at success.

The cons

·         Potential for hidden costs

While the main reason to outsource software development is reduced costs, it’s not always a guarantee. Outsourcing development can incur unexpected hidden fees, charged by the third party.

This means that it’s essential to be aware of all the potential charges that your chosen developers may apply before you give the outsourced go-ahead.

·         Third-party control

Creating your own software is the beauty of having full, total control. You know that the software will fit your brand. You know that the developers will have the best interests of the business in mind.

When you outsource, you have less control and no such guarantee. You aren’t managing the day-to-day work of the developers. You can end up restricted by what the third party is willing to do. You don’t have control over your processes, or software support, for instance.

·         Security issues

One of the biggest cons to outsourcing is that it can present a possible security risk.

This comes in the form of both data protection complications, and potential backdoors into your system.

With a third party handling your software, they’ll also be handling the sensitive data of your customers. You’ll need to ensure strict security and privacy policies are in place to protect that data and remain compliant with legislation.

Additionally, the software will (likely) connect to your systems/business. If there’s a weak point due to negligence or lack of familiarity with your systems, it could provide an entry point for bad actors.

·         Communication complications

Particularly in the case of overseas outsourcing, you can end up facing communication issues with a third party.

When you develop your software in-house, communication can be as easy as popping to the dev office down the corridor. With outsourced development, you must rely on emails and phone calls. You’re doing battle with possible language barriers or time differences. And as such, communication can take longer and more effort.

·         Ethical considerations

If you choose to outsource software development, you will have some ethical considerations to make.

Outsourcing, done wrong, can hurt employee morale. It can impact the sense of job security, and possibly even cause nervous team members to jump ship. 

Additionally, you’ll need to make sure that the company you outsource to behaves ethically.

·         Potential conflict of interests

Your outsourced developer(s) might be working on more than one project. They might be up against a deadline with another company, or be at risk of losing a contract elsewhere.

Simply, your project – your ‘baby’ – might not matter as much to outsourced developers as it does to you.

·         Loss of expertise

Last but by no means least, when you outsource software development, you’re losing the opportunity to be the expert of your own product. The code that makes your product work isn’t built in-house. Another team, working for another company, knows your product better than you do. So, what you gain in convenience, you can lose in knowledge.

To outsource or not to outsource software development

Every decision you make in business has pros and cons. The decision to outsource is no different.

By weighing the benefits against the risks, and what they mean for you, you can get a better idea of what works best for you.

So now, the only question that remains: are you going to develop in-house, or outsource software development?

Useful links

Is short-sightedness fuelling the tech skills shortage?

The tech market and why the winner takes it all

The build or buy debate in software engineering

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