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In-the-Know: How to Distinguish Between Software Product Development and Outsourced Projects

Distinguish Between Software Product Development and Outsourced Projects

Being on the edge of technology is no longer a luxury, but a necessity for most businesses that require innovation; be it accounting, e-commerce, property management or education sectors. And sooner than later any business that requires a software product is going to face the dilemma: Do it in-house or outsource it altogether. This guide serves as a way of helping you search and distinguish between software product development and outsourced projects. And help you decide which would fit better to your needs.

What is Better: In-House Development or Outsourcing?

This is not a case of one size fits all. Every business requirements and expectations are different. An experienced company is very likely to go through the same dilemma as a startup because, for both of them, everything boils down to the same thing.

At this point, you’re probably looking for your product to be developed within budget and without any compromise on quality and on-time with your schedule. If you have an in-house IT team in place that just needs expansion in expertise: that’s the best-case scenario. You need to seek out highly experienced professionals that fit your company culture.


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However, for a startup or a company that does not have a strong in-house IT presence, the predicament is very different.

Sourced candidates are more than two times as efficient than candidates who apply for a job themselves –

The Case for IT Sourcing

IT outsourcing is a frequent choice for many organizations, with outsourcing growth expected to projected at 5.84% every year. Outsourcing software development is an excellent solution for companies looking to expand their business into digital products and services and for companies looking to scale existing in-house development teams.

If you’re a startup with a tight budget, your preference would gravitate towards outsourcing at a low cost while ensuring high performance and rapid results. For companies building proof-of-concept or Minimum Viable Products (MVPs), this path is preferred. Most important of all is high-quality software development services that can help businesses meet the exact need of their customers.

Possible Reservations over Outsourcing

  • Developer Quality
  • Communication Challenges
  • Possibility of IP Theft
  • Lack of Business or Domain Knowledge

But that does not mean IT sourcing itself is problematic. It means that it pays more to do your due diligence.

If you’re wondering how to find the right fit for your business in a way that minimizes these risks, it’s a good idea to sit down and agree on KPIs, expectations and proactively see what risks you might encounter.

Are There Big Success Stories Based on Outsourcing?

Ever thought to yourself: How did 2 guys attending a conference in Paris founder Uber, a $17 billion company? Or how 3 people went from renting out their mattresses in their homes to founding a $10 billion unicorn? Both had something in common: they outsourced their work with perfection.

What Factors Should You Consider When Outsourcing Projects?

Companies that want to outsource their software product development have to keep a couple of factors into account while making this decision. This includes

  • Cost of Outsourcing Vs In-House Development
  • Understanding the Core Competencies of Outsourced Resources
  • The complexity of Your Product

Startups that outsource product development have to keep in mind a variety of factors before taking the plunge. However, to distinguish between software product development and outsourced projects requires a fine eye.

What if I want to opt for In-House Product Development?

In-House refers to the development of a product within a company instead of relying on outsourcing. The company has its own dedicated team that works on business activities or keeps a team for software development needs, in-house. In this type of staffing, the client reaches out for the needed experts that they might lack in their local market. Executed correctly, this type of development offers a high level of productivity.

Advantages of In-house Development

In-house development is the core of every software company and has always been favorite among decision makers, CEOs and managers. You build a team of your own employees, and assign them projects based on their expertise. Sounds good enough, right?

And as indicated, there are tons of advantages to this business model as well. Let’s discuss them one by one.

  • Complete Control — If you go for in-house development, you’ll have a complete check on quality delivery of the product. Also, you’ll have full control over the software development process and direct access to any of the team members required for the project. You can use your own team’s whole strength to get the things done and grow a separate development domain.
  • Trained Employees — Company can ensure that their in-house team of developers are trained to the requisite level. They are capable of performing all sorts of difficult tasks that makes them a tough competition for other companies who offer similar services.
  • High Stability –If one has built an in-house team of developers, there are higher chances of software development project stability and low chances of quitting the project halfway or misinterpreting critical project requirements.

Tip & Tricks

Be Communicative

The more information you will give to your members, the more conveniently they will be able to work. Try to impart as much context as possible. Since you have smart software developers, you should tell them what they must do instead of what they have to do. This can help them to work more effectively.

Explain Your Policies Better

Sometimes, the employees get double-minded by the manager’s decisions. In order to tackle the pressure & stress, it is better to explain your verdicts and policies precisely. Moreover, sometimes a manager makes decisions that people don’t agree with. Instead of changing your verdicts, you should explain why you decided this and what will be the influence of it on software development.

Reward Good Work

Another crucial tip to follow is to recognize hard work. Look out for your team who is working hard with devotion, and giving its best for the sake of the company. Appreciate that member in front of everyone, and reward accordingly. The more you will do for your team, the more your squad will do for you.

Still, want to know more? VAIVAL Technologies has in-house developers that are more than capable of building MVPs. And if it’s a custom software development company you’re looking for, reach out to us here to talk to our experts.

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