Software Outsourcing vs. In-House Team: What’s the Best Choice?

Software Outsourcing vs. In-House Team: What’s the Best Choice?

If you’re involved in the management of custom software, you know that the decision between outsourcing software or assembling an in-house team is one of those questions that always leaves a nagging doubt.

On one hand, finding the right partner can alleviate the burden of development management, providing the expertise of a company specialized in software construction. On the other hand, having an in-house team can strengthen the company’s culture and be more financially accessible.

In this article, we will delve into the intricacies of this choice, considering factors such as your company’s stage, software culture, available investment, your experience in software management, tech recruitment, and the software management load.

Additionally, we will explore the key considerations for startups and established businesses. Follow the topics below:

  • Your company’s stage and software culture
    • Startups
    • Traditional businesses
  • Available investment for software
  • Your experience in software management
  • Your experience in tech recruitment
  • Your software management workload
  • Multidisciplinarity

Your company’s stage and software culture

When assessing the decision of outsourcing or maintaining an in-house team, it is crucial to consider your company’s stage and software culture, as they play pivotal roles in the choice between outsourcing and an internal team.

For growing companies or startups, flexibility often outweighs outsourcing, allowing for swift adaptations. In contrast, traditional businesses place value on internal culture and integration, even under deadline pressures.

Hence, it is imperative to grasp the stage your company is at and how these factors align with your business vision, as this becomes a critical factor in making an informed decision.


If you are launching your startup, software outsourcing is rarely recommended unless you already have experience with this model. Seeking a company with established processes may limit the flexibility needed for frequent adaptations.

Outsourcing becomes more appropriate for scale-up startups or those where managers already have experience in managing outsourced software. In these cases, the software factory can contribute to the company’s maturation in terms of the appropriate development methodologies.

Traditional Businesses

For traditional companies such as corporations, industries, services, and even established technology firms, the culture of ownership is the key point to consider. Whether you have an in-house team or outsourced one, the pressure for deadlines and return on investment will always be present.

In this case, the difference lies in the approach: with outsourcing, the company can enforce deadlines and investments more firmly, whereas with an in-house team, flexibility may be greater, including the option to cancel contracts.

The culture of ownership involves a preference for in-house teams to assimilate the company’s culture and the perception that hiring internally might be more expensive than outsourcing.

Available Investment for Software

Developing custom software isn’t cheap when compared to off-the-shelf market solutions. However, this cost difference is also related to the perception of the software’s importance to the company.

It’s common for businesses to try to compare the costs of custom software with off-the-shelf solutions, but this comparison isn’t always fair. Ready-made software is more affordable due to bulk sales, whereas custom software is developed exclusively for a single company.

If your budget is tight, but you’ve already passed the initial stage of understanding the software’s importance, hiring in-house may be the right choice. It’s preferable to start with a small team and learn from mistakes rather than hiring a software factory with a large, multidisciplinary team and quickly depleting your budget.

Consider outsourcing when you’re willing to invest monthly amounts exceeding £10,000, as the monthly fees for outsourced development teams can range from £60,000 to £120,000.

Your Experience in Software Management

The success of a software project is directly tied to the ability to manage the development team. If you or your team lack experience in developer management, simply hiring won’t solve the problem.

Software development management encompasses various disciplines, from requirements analysis to technical leadership, UX/UI design, DevOps, and testing. Therefore, even though outsourcing may be more costly in many cases, it offers the advantage of bringing in a multidisciplinary and specialized team.

Furthermore, if you or your team lack experience in software management, outsourcing may be the most sensible option to prevent resource wastage since these companies already have established software management processes and tools.

Your Experience in Tech Recruitment

If you’ve chosen to assemble an in-house team but lack experience in recruiting developers, it’s important to proceed with caution. Hiring the wrong professional without adequately assessing their technical capability can lead to months of delays in the development project.

If your company’s Human Resources department lacks experience in tech recruitment, consider hiring a specialized consultancy or outsourcing the development.

Hiring technical professionals requires expertise in the field and a careful evaluation, including technical and behavioral assessments, all to ensure that you’re bringing in talents compatible with the project’s needs.

Your Workload in Software Management

Assembling an internal team is a choice that involves not only hiring developers but also effectively managing that team. Many companies have resources but lack the time or suitable professionals to oversee the development team.

Outsourcing can be a solution to alleviate this management burden. By hiring a software factory, you gain not only developers but also an experienced management team that can take on the responsibility for project delivery.


Last but certainly not least, multidisciplinarity is a factor to consider. Having an in-house team requires the ability to cover all aspects of development, including:

  • UX/UI Design
  • Requirements Analysis
  • Technical Leadership
  • DevOps
  • Project Management and Testing

Therefore, if your company does not intend to build and maintain an in-house team with all these skills, outsourcing to a software factory is the smart choice.

In this context, these teams are already composed of experts in various fields, ensuring that all aspects of development are handled efficiently and professionally.

Ultimately, the decision to outsource or maintain an in-house software team is crucial for the success of your development projects. At Ubistart, we understand the complexities involved in this choice.

We are ready to be your partner in software outsourcing, providing our expertise in managing development squads and projects. Get in touch today. Your journey towards successful software management begins here.

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