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    Which Is Better for Software Development? Outsourcing or In-House?

    By Michael Manzo
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    When you decide to develop software or mobile applications for your business, you will face the question: “Should I outsource or keep it in-house?” This is what business schools refer to as a “make-vs-buy decision,” and it is something that all businesses struggle with.

    So what are the factors that determine which decision makes the most sense for your business?

    You should OUTSOURCE your software development when…

    1. Your software development team is overworked.

    Software development is the process of defining, conceiving, specifying, designing, programming, documenting, testing, bug fixing, and much more. It requires an intense amount of focus and dedication in order to succeed.

    Do you have the resources with experience in each field of work? Are those resources primarily dedicated to keeping your business running, i.e. “putting out fires?” If so, it may be unrealistic to expect that they can carve out time to develop a new product.

    2. You don’t have the resources yet but plan to recruit/hire them.

    Many executives choose this option because they feel that they’d have more control over a product if it were developed in house. However, if you’re considering choosing this option, have you considered all the costs and time involved in finding talented resources? Do you have the ability to screen the qualified engineers from the unqualified?  Do you have the budget to recruit top talent away from the FAANG (Facebook, Apple, Amazon, Netflix, Google) companies who pay top dollar for their talent?

    Many executives underestimate the difficulty in recruiting, managing, and retaining top talent.

    3. You don’t have as much control over your team as you wish you did.

    Maybe you’ve already developed part of your product in-house. However, it didn’t turn out exactly as you’d planned. Or perhaps you planned to complete a project in six months but it actually took 12.

    This happens all the time. Oftentimes medium to large-sized businesses find themselves locked into routines and habits that do a good job of maintaining their core product. Yet, they are inefficient at innovating new things.

    You should keep your development IN-HOUSE when…

    1. You have the necessary resources available.

    If you: a) have team members with the following skills: product definition, project management, user experience design, user interface design, coding, testing, documenting, and systems architecture, and b) those team members have the necessary bandwidth (i.e. they’re not fully deployed on another project), then you are certainly well positioned to develop in-house.

    2. Your resources perform well as a team.

    Sometimes the most talented people in the world can’t work together. Chemistry is important. Has your team worked together before on other projects? Were those projects successful? Do they get more productive over time?  Are your employees happy, stimulated, and/or satisfied?

    If the answer to these questions is yes, then consider developing in-house.

    3. You have a culture of technological growth.

    The advantage of working with an outsourcer is that they live and die by technology. They’ve dedicated their lives and careers to building new things that, to use the cliche, “make the world a better place.” The successful ones are always on the forefront of what’s new in the tech world.

    Is that the case in your business? The tech landscape is continuously evolving, and it can be challenging to stay up to date. Is your team ahead of the curve? Do they love technology so much that they dedicate their free time to it?

    If so, then you have the right resources to develop in-house.


    Running a successful business involves countless make-vs-buy decisions. What should you outsource and what should you do internally? The rule of thumb should be to focus your in-house resources on what your strengths are and outsource everything else.

    So next time you are considering a new software project, ask yourself that one question, is your team the best choice to build it? If not, then you should be looking for an outsourcer who is.

    Let us know when you make the decision.


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    President & Chief Executive Officer

    About the author...

    Michael Manzo has nearly than 30 years of experience managing all aspects of software development including product management, user experience and interface design, engineering, quality assurance and marketing. Michael has served as President and CEO of CodeStringers since September 2014, having served as the company’s founding Chief Product Officer from July 2012.Prior to CodeStringers, Michael was Chief Marketing, Product and Strategy Officer at Openet, a leading global provider of transactional business and operational support system (B/OSS) software for telecom and cable firms, where he led marketing, product management, strategic planning and growth initiatives for the company. Manzo joined Openet as part of a turn-around team and, during his tenure, Openet grew from $15m in annual revenue to more than $150m, became the worldwide market share leader in the company’s primary product category, and developed a widely recognized reputation as the telecom infrastructure industry thought leader.Previously, Michael was Vice President of Products and Marketing for Traverse Networks, a fixed mobile convergence enterprise solution provider, which was acquired by Avaya. Michael has also held executive positions at Voice Access Technologies, Omnisky (acquired by EarthLink), Telocity (acquired by Hughes DirecTV), and Notify Technology Corporation. Michael has a BA in Journalism from the University of New Hampshire. In his spare time, Michael is an amateur woodworker, building indoor and outdoor furniture for friends and family. Until injuries sidelined him, Michael was an accomplished triathlete, having completed six Ironman distance races and numerous shorter distance races. Michael also served nine years in the U.S. Army Reserves and National Guard being honorably discharged as a Sergeant.

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