What are the Pros and Cons of Hiring an Internal Developer versus an Ancillary Firm?

January 6, 2022

Posted by: DevDigital

What are the Pros and Cons of Hiring an Internal Developer versus an Ancillary Firm?

Hiring outside help for your software development work makes sense for many businesses, though having internal development talent can also makes sense in some situations. Cost and time are the key factors in deciding to hire an ancillary firm or hiring a developer. However, you should still consider all of the advantages and disadvantages of each software development strategy.

The Advantages of Outsourcing

Outsourcing is popular because it offers many benefits:

    ●  You can easily engage developers with different skills as needed.

    ●  If a project grows in scope, a software development company could easily assign more people to the project.

    ●  You only pay for development work, not hardware, software, or office space.

    ●  You save money on salaries by only bringing in development help when you need it.

The time and money you save can be invested in other business goals while the software development work proceeds. For a relatively small project, outsourcing is usually the better strategy. However, outsourcing also has some disadvantages.

The Disadvantages of Outsourcing

Hiring a third party introduces a few business risks. You could hire a firm that lacks the technical expertise you need, because they were very good at overselling their capabilities. This might not become clear until months into the project.

You may lose access to your development team after the software launches because the development firm will move the team members to new projects as soon as possible. Assembling a new team and kicking off a new project takes extra time.

Outsourcing costs vary depending on the skillset required, sometimes dramatically. Your project cost could go way up just because the new skills it required to have a higher market value. An extra $15 per hour adds up fast on a large custom software project. On a positive note, some software development firms charge a fixed hourly rate.

You can’t know if the development firm is going to be easy to work with until after the project starts. This is a bad time to find out their people don’t understand your business or your business’s need and are hard to communicate with.

The Upside of Hiring an Internal Developer

The biggest advantage of having an in-house development team is that the programmers have a keen interest in making the project a success. After the software goes live, your employees will be around to support the product and work on the next project. Executing a small project is much easier when you have people with the necessary skills on the job already.

Communication with team members will almost always be easier and faster. With an outsourced project, the developers could be several time zones away from your company, while the project manager is in yet another time zone.

If the project is big, and mission-critical having developers on the payroll may be worth the investment. There are, however, a few disadvantages to in-house development.

The Disadvantages of Having an Internal Development Team

Building an in-house development team is expensive, too expensive for many businesses. Keeping developers around between projects can be expensive as well. Cost is perhaps the best argument against having an in-house development team.

If you need to change course, such as shifting from one type of code to another or expanding from Apple to Android with your app, you have the same issue of bringing on experienced developers. You face the risk of a key member of the team just leaving, especially a star performer who is always subject to being poached by another tech company.

Working with skilled technical people introduces a couple of business risks. You could hire underqualified people and only later find out they oversold their knowledge or expertise. As Chief Business Officer Stephen Davis said, “There is no such thing as a full-stack unicorn.”

While using your employees to develop new software can save money, you also run the risk of creating a solution that’s sub-optimal because you are building what your teams’ skills will allow. Instead of creating the best site or app from a marketing perspective, you build what your team can build. This can harm you in the future as web-related technologies change or the software needs to be enhanced.

DevDigital has development staff and project managers with deep experience in a wide range of development tools, programming languages, and project management methodologies. Our track record and our flat-rate pricing minimize two of the big risks with outsourced software development. If you would like to learn more about our expertise and approach, please get in touch with us to discuss your project.

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