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Outsourcing Vs In-House Product Development

The product has become a necessity for most of the business including retail, education and legal. Also, there are many products on the market as our competition. We need to stay ahead of our competition for the same reason we need to hit the market as soon as possible.

There are many queries in every person who wants to build a product. The most important query is how to save cost and what are the ways to improve time?

What is an In-house product development? what are its pros and cons?

“In-house refers to conducting an activity or operation within a company, instead of relying on outsourcing. A firm uses its own employees and time to keep a division or business activity, such as financing or brokering, in-house.” Above definition tells precisely what means in-house development. Moreover, an in-house development we have to hire an employee on our payroll.


The in-house development gives you complete control of delivery of your product. You can use the full strength of the team to get the delivery done.

You can grow your knowledge about your development domain if you have an in-house team. As the complete team is at your place you can understand workflow and manage the project well planned.

With an in-house team, the company can ensure they are trained to the requisite level and, via exclusive contracts, can hang on to any star performers whose work differentiates the company from the competition.


If you don’t know more about development technology then in-house development will be a nightmare. Mostly because development needs very dedicated planning and management.

Cost for development can’t fix for in-house as we are paying each employee differently. As the cost for building product will not be fixed as we have to consider rent and employee payment.

Managing internal operation is a very time-consuming process. As it takes most of the time to manage every process for development.


What is an outsourced product development (OPD)? what are its pros and cons?

“Outsourced product development (OPD) is a practice in which an organization hires a third-party provider for the development of products and services in a variety of fields (such as IT, business, communication, and HR) and even idea generation.”


In OPD, we have an advantage over knowledge and domain expertise. Since the vendor got all knowledge and domain expertise. As product owner/sponsor you don’t have to worry about domain knowledge.

Vendor company got good experience for development and they build more applications this help to improve time for delivery. This way we can get ahead of our competition.

When a company outsources, it also doesn’t need to invest in the equipment or software necessary to do that particular job. The contractor will either provide their own tools or they will include the cost of acquiring the equipment in their fee, which will be less than if the company bought the equipment outright.


As you outsource complete development then you might don’t have control over the development cycle. Because this you have completely rely on your vendor.

Communication gap is one of the important issues in the outsourcing model. Every detail about the project must be transfer to the vendor company. This becomes problematic if details about the project are not transferred correctly.


Which is better?

There is no straight answer or choice. You have to decide this very cautiously as if you make the wrong choice then you can burn your capital very fast. This decision completely depends on your product and its underline technology.




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