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The main difference between 3 models: In-house development, Outsourcing development, Freelancer.

June 23rd, 2020

The main difference between 3 models: In-house development, Outsourcing development, Freelancer.

Over the course of our storied six-years of experience, we’ve built 87 dedicated developer teams for a plethora of clients. So we can say with confidence we’re pretty darn familiar with the term, “outsourcing software development partner.” However, a dozen or so times we recommended our clients build an in-house development team if in the course of the communication process we noticed they are more about “company values and philosophy” or just have a minor project. Wait. Ever wonder how one chooses between developers sitting and snacking in your own office and an outsourcing development company/ Wonder no more. Maybe your team needs just a few freelancers. This could be the cheapest solution. The explanation for those curious can be found down below.

1. In-house development team

In-house teams are a good fit for long-term, complicated projects. You’re able to manage and regulate an in-house team real-time more effectively than outsourcing companies or freelancers. If your project scales up or your tasks change, you can enhance or reduce your team scope and size. An in-house team is the best pick if you need to always communicate (especially face to face) with developers.

Pros

  1. You have a chance to connect with your colleagues while they available just next door. This is why cooperation will also improve.
  2. One more advantage of the in-house team is that they specifically work on your product, they have no other tasks and responsibilities.
  3. With an in-house team, you have no language barriers or cultural differences. So if the corporate culture and strong sense of common cause are necessary for you, the in-house team is your choice.

Cons

  1. The cost of hiring a full-time in-house team is huge. I mean really impressive. You have to pay a salary (software developers not the cheapest employees) plus have an appropriate technical structure and equipment to accomplish the operations.
  2. Finding and hiring new employees to your team as full-time developers is a difficult task in terms of necessary expertise, knowledge, and experience.
  3. You totally rely on the developers you hired. So if anyone of them gets sick and takes leave you’ll be in trouble. The only chance to continue development at the same pace is to hire substitute engineers, which leads to additional costs.
  4. The training process is always a required thing in every company. So if you’re hiring new employees, you have to regularly teach them. Even if they have the necessary competencies, training is part of success.
  5. After the work is done and the product is live, someone has to maintain the software. So you again have to find developers, that is an even harder task.

2. Outsourcing Software Development Company

Outsourced development is usually fitting for large, difficult, long-term projects. Outsourced development companies can give you full-time developers along with part-time and on-demand resources. Hiring remote developers can save your budget as well as prevent stress. If you need a reliable but cheaper development center, this option is for you.

Pros

  1. Before you hire software developers from an outsourcing company, you sign a legal contract or NDA, which has a legal effect, privacy policy, and validity. You also sign a document with deadlines, development costs, etc. 
  2. Outsourced companies save weeks or even months on finding developers by offering you a team of skilled guys and industry experts.
  3. You can make no mistake in their quality of work. Software development is their only expertise and they know it backward and forwards.
  4. With outsourcing companies, you don’t have to control every step and manage every task. Most of the time you just join weekly meetings, to check the overall process. Or if you have an in house PM or a large internal team, one daily meeting is enough to keep the things organized.
  5. Hiring developers from countries like Ukraine, Poland, Belarus, etc. can help you save money and have access to the most talented engineers in Europe.

Cons

  1. The most notable disadvantage of hiring an outsourced company is the time difference. Most of the time, you have a time gap of around 8-12 hours. However, it can be a good chance for round clock development – you can sync up early in the morning and actually check the whole work employees have done during the day. 
  2. It might take a decent time to hire outsourcing software developers from a company than just find freelancers. It is a lengthy process with a few stages to ensure the quality of employees. 
  3. Hiring a dedicated developer from a company is often much more costly than hiring a freelancer. 

3. Freelancer

Recruiting a freelancer is a good idea if you have a small project or you have just a few tweaks to make, or even fix some bugs in software. 

Pros

  1. Freelancers are a more cost-effective choice. Most of the time, you find freelancers who work with “hourly rates” models or a “fixed price”. However, if your project will enhance and raise freelancers can be a pretty costly option because you’ll pay for every hour.
  2. Reaching a perfect freelancer for your product is simple while you have thousands of alternatives available.
  3. Freelancers are usually available on standard office hours, which ensure comfortable and smooth real-time communication.

Cons

  1. Freelancers have no kind of engagement in the work process and synergy with the team. As far as freelancers have less interaction with other developers, they can’t learn and perform the same.
  2. The process of finding freelancers is pretty easy and fast thanks to platforms like Upwork, Fiverr, etc. But, as we know, the more options we have, the more complicated choices we have to make. 
  3. Freelancers have a part “Free” which means they are actually free people. They open for your project 24/7. Most of the time, they almost have no discipline. Every freelancer cares about their own profit more than your company’s “face”.  
  4. Your idea is always a diamond, and often freelancers don’t have the time/desire to understand it. Also, giving your idea to a freelancer who you know just through the internet without signing an NDA can be risky. Freelancers don’t have legal docs to secure your project.

How to choose between these 3 models? 

How to decide whatever you need: freelancer or outsourcing company? Or maybe you should build an in-house development team? 

Here is a little quiz for you to pick the right model. Just answer the questions.

Results

Probably you can build an in-house team.
You definitely need an outsourced partner! Drop us a line to know more.

#1. Do you have a large budget for software development?

Probably you have to choose an outsourced development partner. Drop us a line to know more!

#2. Do you (or somebody in your team) have experience in software development?

Probably you have to choose an outsourced development partner. Drop us a line to know more!

#3. Do you have time/skills to recruit technical people?

Probably you have to choose an outsourced development partner. Drop us a line to know more!

#4. Are you located in the country with limited software resources?

Probably you have to choose an outsourced development partner. Drop us a line to know more!

#5. Do you need a developer for long-term project?

A freelancer is a perfect fit for you.

#6. Will you probably need more developers in the future?

A Freelancer is a perfect fit for you.

#7. Do you need help with the recruitment/screening process?

A Freelancer is a perfect fit for you.

#8. Do you need your developer to be a part of your team, share corporate values?

A Freelancer is a perfect fit for you.

#9. Do you need to prevent your company from legal issues by signing NDA/MSA?

A Freelancer is a perfect fit for you.

finish

Ukraine as one of the best outsourcing destinations. 

Ukraine has earned leading positions in numerous global tech ratings and listings. 1st place in Eastern Europe ranking according to the Outsourcing Journal and the CEEOA report. Software developers from Ukraine gained 88.7% in all HackerRank challenges. The country raised more than 184 000 software engineers at all levels and seniority. This is the fourth biggest amount of tech specialists worldwide. 

Ukraine as one of the best outsourcing destinations

Ukrainian IT industry: Overview 

Ukrainian developers are experienced in most common (and also unusual) technologies like Java, C#, JavaScript, PHP, .NET. Have no doubt that you can easily find skilled developers for your project, whatever it is a mobile app, SaaS, or Database.  

If you want to know more about Ukraine as an outsourcing destination, please check our previous post. There we’ve described the whole process in more detail.

Still have questions? Need more information? Drop us a line and one of our consultants will contact you as soon as possible!