Outsourced Software Development Vs. In-House: Pros and Cons

by Catalin Dinca July 18th, 2021

After evaluating the needs of your software development project, one of the first decisions to make is whether to develop in-house or outsource to a software development service.

Both approaches have their benefits and drawbacks and you should carefully consider each one before moving forward with your development. Factors like communication, timescale, expertise and budget should all be considered. Let’s look at the pros and cons of each approach in more detail.


In-house software developers work together every day. They understand the underlying principles of a project and have an invested interest in its success as employees of the company. Internal teams will already be familiar with workflow processes and procedures for providing feedback.

In-house software developers will already understand the company’s culture and the reasoning behind their processes.


One of the principal reasons that companies outsource their software development is a lack of in-house skills. Skills gaps mean steep learning curves and overstretched staff. Before embarking on a software development project, it’s important to evaluate where your team’s expertise lies. Once you know where your team’s strengths and weaknesses are, you can use these insights to determine their impact on your project.

In-house app development involves high setup costs including — training, recruitment, licenses, infrastructure cost, and many more.


It takes about 1-4 weeks to find an outsourcing company (depends on your requirements and engagement). The biggest expense here is related to your time.

Once you decide to start development and find an outsourcing agency, you simply contract them, and later can upscale and downscale the number of outsourced people.


Cultural differences may result in misunderstandings. It may be better to choose an outsourcing provider from a not-so-distant, culturally similar location.

Working with an outsourced team sometimes means negotiating different time zones. Although this doesn’t necessarily slow down the development process it can make organizing meetings difficult.

Companies all over the world have looked at the pros and cons of both strategies. Generally, they choose to outsource because they want to reduce costs, focus on core functions and business.

In-house software development involves using the skills of your internal team to create your software. Outsourcing involves working with a third-party provider with specialist skills to develop your project quickly and efficiently.

Catalin Dinca
CEO, Evia Soft

Cluj-Napoca, Romania