Software In-sourcing and Out-sourcing – 8 factors that will help you decide

In the process of building a new product, one of the key components of its success is the team working behind it, so it’s important to ask the question whether your teams will be an in-house product or if you want to outsource the talent. The entire project’s design and its profitability rely on how dynamics within the teamwork. Plus, getting the right team for the right project can ensure that the time, finances and effort invested in your project will be utilized to its full potential. There are several key factors to be considered in answering the question whether you should be software in-sourcing or outsourcing your work. Let’s explore some of the important areas and questions that will help you answer the big question and find the right team.

  1. Right Skills at the Right Place

The first and what may even seem as an obvious question is asking if the team you already have, possess the necessary skills for the project at hand. To answer this, you should critically review your team’s strengths and weaknesses and the areas where their respective talents play strong. Most people brush this question aside because they assume that the day to day capabilities of a team will suffice to handle any new project that needs to be completed, often leading to disappointment when they struggle down the line. There are two key aspects of your team’s knowledge and skills that will help you formulate a clear answer to this question –

  • Proficiency in technology implementation
  • Proficiency in product development

Most times, internal teams possess the general technical skills and knowledge but seemingly lack specific skillsets and development expertise that is essential for the product going live. While analyzing the internal team expertise it is also vital to have a clear idea on whether the vendor focuses on domain expertise or technical expertise because most times you will find yourself requiring both aspects to successfully complete a project.

  1. Domain Expertise: Advantage or a Disadvantage?

Having a comprehensive understanding of the domains within which you operate – the market, your customers, a fair assessment of your competition and knowledge of the laws and regulations applicable to your products and services naturally puts you in a positive place and confirming that the knowledge is passed on and understood by your in-house teams work as a major advantage in the current business landscape.

However, it’s important that you don’t get too comfortable in the safe place you are at. It’s easy to find yourself complacent and ignorant of the ever-changing environment around you and you are at the risk of missing out on industry’s innovative approaches and solutions that you could integrate into your own product development processes. If you find your team unable to keep up with the constant changes and upgrades it will work in your favor to consider outsourcing to a team that’s more comfortable in learning and adapting to new approaches to stay on top of the game.

  1. Being Ready for the Future

Software will always evolve from one stage to the next. Every new technological advance every day pushes the software as we know it to a new level and you either evolve with it or lose your place on the market. To guarantee your momentum and keep up with the industry’s new developments you will need two key components – a well-developed product and balanced project management. The reality that software is constantly evolving creates an exciting space for you to operate in, a canvas that you and your team can paint the future of your industry on through constant innovation and modifications. The secret is in acquiring a team internally or through outsourcing that will preserve related knowledge as well as establishing practices and process that make future work more convenient.


  1. Managing Maintenance?

Much like the consideration focused on being ready for the surprising nature of future developments, maintenance is a crucial point that evolved around a team’s responsiveness. When working on a project, the extent to which you can control what affects a team stops at planning the workflow and controlling the timings of future products/versions. However, factors such as maintenance timings are beyond the control of a single group and is a key point of consideration when outsourcing. The internal team needs to be made aware of the outsourced team of the correct and current schedules to avoid confusions and challenges, especially in the event that the two teams are under completely different management.


  1. How Dedicated Is Your Team?

Insourcing or outsourcing, one of the main points that require your attention is your team’s interest in the project. The success of any project depends largely on the people’s dedication for the job. When creating a team internally you need to always analyze the strengths and weaknesses of the existing employees and confirm that they can handle a change in role, responsibilities, and context. This isn’t to say that outsourcing will guarantee the perfect team each time, but you do have the liberty of screening people beforehand and choosing the most appropriate team for the job and therefore making sure that your project will have the right capabilities as well as the enthusiasm.

  1. Rules of Compatibility

The first step in any successful relationship is compatibility, and teams and projects are no exception for the rule. Before finalizing a team it’s important that you carefully consider your values as well as the potential team members’ and their attitudes so that you can have an initial idea on how to navigate through the process of working on a project. Checking to see if your priorities and values are aligned as well as making sure you and the team share the same enthusiasm as well as having a good understanding of what is required from each individual for the project will make it that much more convenient for you to navigate the challenges that come your way as you work together. As a leader or a supervisor, it’s also crucial that you are aware of the prospective team’s learning styles as well as how and what they respond to, which rewards and incentives will resonate strongly as well as a well thought out plan for conflict resolution. Most importantly make sure you and your potential team will enjoy spending time with each other and will find joy in working on the project before you start!

  1. Product Development – Where Are You At?

From the point of your product, one of the first things you need to be sure of is the stage in the product development cycle you are currently at. Before piloting the project or even recruiting your team whether through insourcing or outsourcing it will create a much clearer and a stronger structure for you to plan exactly where you need the team to come in and apply their talent. From ideation, research, modeling, designing and to implementation and validation, having a clear understanding of where you stand will help you match the right team for the right job, raising your chance at success.

  1. The Makings of a Strong Team?

Along with the product development stage, next consideration from a product angle is knowing what resources you have and you don’t, or even the simple question of whether you have the necessary resource at present to create a strong internal team. If it’s a case of creating a team from scratch, the two main components you have to focus on is recruitment in which you will face challenges such as skills shortage in the industry or positions that demand a high financial value. Next step is vetting your candidates to see if they match the culture that you operate in as we discussed earlier as well as making sure that your company has a steady influx of thought-provoking projects and exciting insights to work on so that you can attract and retain the best talent of the field.

You should always be vigilant about the risk of your new team not fitting with each other which is still a possibility, even after considering all of the points mentioned throughout this article because of human behavior regardless of what stays unpredictable. These concerns also apply in matching with the perfect vendor and running an initial critique of their investment patterns in both financial and time-related areas as well as their culture, opinions, and practices.


By filtering your answers to the questions and dimensions mentioned throughout this article you will be able to decide between insourcing or outsourcing and show both the merits and disadvantages of both options.

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