In-House vs Freelance Software Development: Pros and Cons

Published Apr 25, 2018
In-House vs Freelance Software Development: Pros and Cons

You’re a CEO from an established company enjoying the fruits of your labor. Your team is working on a new feature to further accelerate your company's growth.

You have a brilliant second feature idea, but you’re not sure whether your in-house engineering team has the manpower to build it. If you wait, however, your opportunity cost may be too high if you can't keep up with the fast pace of the business world.

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So what do you do?

Fret not — we’re here to walk you through the benefits and drawbacks of outsourcing your next idea. From expertise to quality, from time to money, here are the pros and cons of outsourcing versus in-house developers.

Expertise

The first question is: does your team have the ability to build your new feature? You’re thinking, well, they built the first one, so of course they can build the second.

Hear of us out though.

Imagine if you're an email outreach tool SaaS who is now expanding your product to have a lead generation feature. For that, you might need to have a developer well versed in databases or Python who you may not already have on your team.

If the skills required to build your flagship product don’t carry over well to the second feature, i.e., the languages you used would increase technical debt, are less efficient, or the engineer(s) that helped build the first project are long gone, should you continue pushing your in-house team to build Feature #2?

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In-House

If you’re not in a hurry to have your second feature built, it would not be a terrible idea to consider doing so in-house. That being said, consider your team’s specialization and how much you value your dev team’s time and resources.

If the second project’s underlying technologies are a big departure from your existing dev team’s skills, it may take team members a while to get up to speed on the new material.

Taking time to learn the new technology might be a time sink for your dev team. Not only that, the time they’re spending learning the new technology means less time spent maintaining or adding features to your core product.

While it’s certainly feasible to have your in-house team build Feature #2, the question is whether it’s worth it in terms of time and resources if they don’t already have that expertise.

Outsource

When it comes to Feature #2, outsourcing could be a better idea if you have access to expert developers. If you can hire team members who already know the relevant technologies to make Feature #2 happen, that not only cuts down on development time and resources, but can come with additional benefits.

For example, if you hire a developer from a freelance platform site for the language you need, he or she doesn’t need additional time to learn it — they’re already an expert.

Because the developer is already well-versed in the language you need, once you give them the wireframe or specs, he or she can get to work and your dev team can work on your existing product.

In addition, an experienced freelance developer that has passed a stringent vetting process often has other value added expertise that will benefit you.

Your freelance developer can build with scalability issues in mind, which helps you avoid technical debt, and can advise you on potential pitfalls because of their experience and expertise. If you're a non-technical founder or your CTO is only there on a part-time basis, he or she can also advise you on the more technical aspects of Feature #2.

While this may not seem like a big deal now, if Feature #2 is as successful as your core product, you’ll be glad you chose an experienced developer to help you sidestep potential problems on your way to growth.

The CodementorX developer we hired played a fundamental role helping the team shape its use of best practices and patterns in implementing React.js, unit testing, and upgrading the libraries to keep the stack up to date. He also helped to implement critical functionalities, like adding a fuzzy search for jobs and customers. Most importantly, he was always available and keen to mentor, collaborate, and share ideas with the team.” — Samuel Chalela, Tech Lead at Bridge.

Winner: Outsource

Quality

It goes without saying, of course, that you want Feature #2 to be a high quality product that gives customers a great experience, is easy to maintain, and is highly scalable. However, how do you best control for quality for both in-house and outsourced development? Which option gives you an easier way to ensure your company’s best long-term and short-term interests are being met?

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In-House

For the most part, coding standards can be better controlled when working with an in-house team. With your own team, you can set the standards and ensure that they’re being followed relatively easily by checking in with your CTO, engineering manager, or your team directly.

This way, you can make sure that best practices are being adhered to in the development process and won’t end up with technical debt or a bigger problem later on down the line.

For non-technical founders who like being more hands off, having a CTO and an in-house team build your Feature #2 means that you can assign the task and have relative peace of mind to focus on other aspects of your business.

Outsource

Quality code comes from quality developers. For more access to both, outsourcing to a freelance platform might be the way to go.

Outsourcing gives you a larger talent pool beyond just the local market to draw from, and you can add a freelance developer to your existing team who can speed up the build process while still maintaining quality and coding standards.

Indeed, while there’s often debate on in-house versus outsourcing development, there’s no reason why you can’t have your cake and eat it too. You could have your existing team build the parts they know and supplement their efforts with experienced freelance developers to ensure quality.

We are not wasting money on office space, and we are not pinning ourselves down to a certain geography, or the related limitations of a talent pool within that given geography. Second, it has allowed us to find talent when we need it, wherever it’s available. — Tim Maliyil, Alertboot CEO

While adding freelance developer labor to your team can help save you development time and resources without sacrificing quality, it does require that someone on your team spend time onboarding the new developer.

Although your freelance developer is an expert, he or she may not be completely familiar with your particular SOPs. Thus, until you know they’ve adjusted accordingly, you may have to spend just a little more time making sure everything is on the up and up.

Winner: Draw

Time

Time is money, especially in the tech world. The sooner Feature #2 launches, the sooner you can make money from it. In addition, the faster you can release your feature, the chances of someone else cornering the market with a similar feature or product decreases. Thus, it’s in your best interest to get your product out there.

However, your launch depends on how fast your team can build it. Whether it’s your in house team or an outsourced team, the clock is ticking on your idea. Which team can get the product out there faster and test it on the market?

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In-House

For one, communication is much quicker with an in-house team because it’s much easier to find someone when they’re working in the same building as you.

This cuts down on communication downtime considerably. Often, projects get delayed when people go AWOL or are slow to respond. Working together means that this is less likely to happen.

However, while there’s less communication lag when you’re in the same place, if you’re busy with your core product and you chose to go with an in-house team for Feature #2, your dev team still has to split their time working on different projects.

Also, your in-house team may not be as enthusiastic about Feature #2 as they are about the core product, which could result in feet dragging and delays.

These factors might increase the time to deliverables due to either lack of interest or simply because your developers need to prioritize and cannot dedicate themselves exclusively to Feature #2.

Although it’s easier for you to push for progress and updates in person, you’ll still have to wait for your dev team to have time to work on your new idea.

Outsource

When you hire a freelance developer, particularly if you pay them on retainer, you have a specialist who dedicates time exclusively to your project for X amount of hours.

Knowing that an expert is exclusively working on Feature #2 can allow you to focus your existing resources better with your dev team.

This new setup means that you don’t need to expect your in-house team to get Y amount of work done on a separate project, which could downgrade the priority of their existing projects, because you have a dedicated person or team to work on this in the background.

Keep in mind that there may be delays in terms of communications, particularly if your freelance developer is a world away. That being said, the delay can be minimized with clear expectations, guidelines, and dates for deliverables. While it’s never fun waiting for someone to get back to you, the inconvenience can be mitigated.

Even if you may not be able to reach your freelance developer immediately, if you expect asynchronous communication, you can prepare for it by holding scrums, leaving detailed instructions, or preparing a detailed shared backlog.

Indeed, one advantage of asynchronous work is that by the time you’ve arrived at work, a core component might already be done while you were sleeping.

Winner: Draw

Money

Money is, of course, one important factor to keep in mind, so we saved the best for last. If you have limited runway, are bootstrapped, or just have a tight budget, the decision of in-house versus outsourced development can be more complicated.

You want the best work, done in a small amount of time, and at an affordable price. Can your team give you this since you’re already paying them or do you need to dig deeper into your pockets?

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In-House

One argument for having your in-house team build Feature #2 is that you’re already paying your dev team to do work for you, so in theory, having them build your second project doesn’t “cost” you extra, since their labor is already accounted for in your budget.

However, if your team is already very small, you may need to hire more people to help with Feature #2. The dev team may be shorthanded from maintaining and building for your core product, and might require reinforcements, which costs money.

Depending on your idea for your second product, you may need designers, product managers, and other labor to bring Feature #2 to life, which also costs money. In addition, it wouldn’t be cost effective to create a whole new position for a feature that may or may not take off.

Thus, while on the surface it may seem like having your existing team build a project is free, that’s only true if you have a big enough team. Otherwise, the additional labor may be even more expensive than outsourcing if you need to pay for benefits for new hires.

Outsource

If you outsource Feature #2, however, you can get an experienced developer at a more affordable cost, depending on where you source your talent from. In fact, depending on where your developer of choice is located, you can get very good bang for your buck.

Indeed, with a freelance developer, you can hire someone for as long as you need and only when you need the extra help. With a freelance developer, you don’t need to pay the standard benefits that would be required for long-term employees who might be underemployed after the project is completed.

We are not big enough where need a full-time graphic designer. Or a full-time, high-end, C++ guy. We don’t have enough work to keep them busy. It’s a matter of getting talent when we need it, and being cost efficient. — Tim Maliyil, Alertboot CEO

Winner: Outsource

Conclusion

Well, there you have it. There are both advantages and disadvantages in terms of expertise, quality, time, and money when it comes to choosing whether to have your in-house team build Feature #2, outsource it to a freelance developer, or some combination of the two.

Category Expertise Quality Time Money
Winner Outsource Draw Draw Outsource

While outsourcing edges out in-house development in terms of money and expertise, if cost is not an issue and you don’t mind waiting a bit longer for your finished product, then it’s a toss up and up to personal preference which of the two you choose.

In the end, it’s up to you, as the stakeholder, to decide which of the four you value and which of the two options will allow you to obtain your finished project at the quality and cost that fits your needs. Let us know which option you prefer and if one of the two has worked out better for you in the comments section.

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