A brief comparison: Inhouse Software Product Development Vs. Outsourcing Software Product Development

Software Product Development is not just a one-time affair, it’s a continuous process. Because as the world around us evolves, the products also need to be optimized. The products must be good enough to cope up not just with the competition, they also need to be up-to-date with the latest technology.

Improvise the product every moment, as per the change in trends!

So, in any case, every organization needs to have a separate team of experts that focuses just on the Software Product Development. This will ensure that the final product launched in the markets has the best-in-class quality, the highest ratio of customer satisfaction, minimum production cost, and last but not the least – it must maximize the profit.

There are 2 ways for an organization to develop a product…

IN-HOUSE SOFTWARE PRODUCT DEVELOPMENT

Software Product Development by the employees that are designated/ hired by an organization, is Inhouse Software Product Development. This is a historic and one of the most common techniques used by medium scale industries and many large-scale industries, for Software Product Development. But it has its own benefits and limitations, which are different for each organization.

In general, In-house Software Product Development team usually ensures the long-term security, i.e. the organization doesn’t need to worry about the market fluctuations, every time they are developing their products.

Benefits of Inhouse Software Product Development:

1. In the Inhouse Software Product Development processes, the whole team works in one common direction and with better process-management that helps to get the best output. This way, Software Product Development can be managed effectively for the long-term projects.

2. As the employees are hired by the organization, they are well aware of the company policies, brand guidelines and the organization’s overall work culture. They work according to the pre-set pattern which might not be easy to adapt to, for the outsourcing employees.

3. Since the employees are working in a close monitoring of the leadership, the overall turnaround time taken for the different Software Product Development processes can be minimized. As the total time consumed from inception of the assignment to the launch of the final product or the prototype is reduced, it allows an organization to earn better revenue.

4. The Inhouse Software Product Development team makes sure that the final product exceeds the expectations. Every organization has their own pre-set standards and it is necessary that the interest of the team and the requirement of the organization are well aligned. It can be achieved with Inhouse Software Product Development.

Limitations of Inhouse Software Product Development:

1. The time consumed up for the final product to get developed is comparatively higher than that used up by outsourcing since the whole team works on one area at a time.

2. The Software Product Development process requires selective expertise and experience for the perfect output. It can’t work on trial-and-error basis because it leads to lesser quality output. Sometimes, it becomes too big a risk.

3. Hiring employees, that too experienced and expert employees, is costly affair. And if the funds are limited to execute a project, organizations might need to compromise on talent, ultimately undermining the quality aspect.

4. Also, there is a high chance that you constitute one team for one Software Product Development project but that team cannot be used for a different product. This leaves an organization with surplus employees and still feel dearth of employees.

OUTSOURCING SOFTWARE PRODUCT DEVELOPMENT

When an organization hires third-party Software Product Development services provider, it is called outsourcing Software Product Development. It allows an organization to have better strategic planning, communication, collaboration, management and services of specialized resources, at a lesser cost.

This is a relatively modern concept that is widely used by corporates and MNCs, for Software Product Development. Organizations like Skype, Github, MYSQL and Slack were built with outsourced development. It also has its own benefits and limitations. But overall, outsourcing helps an organization finish the project in lesser time, at lesser costs.

Benefits of Outsourcing Software Product Development:

1. The teams of Software Product Development service provider, usually work on different aspects of Software Product Development at the same time. This helps reduce the overall time required for the final product to get ready. This is the biggest advantage in today’s fast paced life.

2. Outsourcing allows you to have greater flexibility in the Software product development. Flexibility in-terms of improvisation, addition/ deletion of features, changes in the deadlines, and the resources that are involved in the project. With outsourcing, you get highly flexible team with highly flexible outcomes.

3. IT industry is very much volatile; hence it is important that the product development team can match the revised magnitude of an Software product. It so happens that sometimes a product gets astonishing demands from the end-users and the organization has no option but to upscale the magnitude of project. With outsourcing, that’s easy.

4. One of the biggest advantages of outsourcing is that, the organization has a very limited liability. From the product quality to the deadlines and improvisations required, the organization can have the liberty to revise the list of deliverables as per the requirements.

5. Of course, the cost is important. In fact, cost is one factor that has fuelled the whole outsourcing industry to the global level. Outsourcing the work to service providers with better resources at a lesser cost, is beneficial indeed!

Limitations of Outsourcing Software Product Development:

1. If there are communication gap between the organization and the service provider, it may lead to an awkward situation. The probability of errors increases if the service provider is not familiar with the standards that the company aspires.

2. If a single project has been outsourced to different service providers for different modules, it becomes hard to finally collaborate or pile up the different components to create a final product, due to technical incompatibility.

3. The commitment of your own employee would obviously be different from the commitment from an outsourcing firm. Also, if the project requires a greater deal of confidentiality and secrecy, it might be difficult to ensure at the service provider’s end. However, that cannot be generalized as there are millions of honest service providers, who make sure your product is unique.

According to Deloitte’s 2016 Global Outsourcing Survey, outsourcing is expected to grow exponentially in the future, particularly in Finance, HR and IT sectors. It also reveals that outsourcing helps a lot in cost-cutting, focusing more on the core business, solving capacity issues and enabling mergers and acquisitions deals.

With Outsourcing, you can get the perfectly customized Digital Transformation!

For example, one of the leading automotive parts manufacturing companies in India, having more than 5,000 employees in more than 13 plants across the country, required the help of technology to manage such a huge workforce. IConflux developed an Intranet Portal that was designed and customized perfectly to cover every aspect of HR Management. Leaves, Approval, Documents, Attendance, Asset Management, Planning, etc. Everything became so easy when they decided to outsource this product development. They still develop automobile products through in-house development but they outsourced the development of an internet portal. A smart move indeed!