Agency vs freelancer vs in-house software development

Agency vs Freelancer vs Inhouse Software Development
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Mobile app development market & web development market is flourishing with tremendous activity. Every company endeavors to expand its panorama of work.

In fact, modern-day companies are putting in tremendous efforts to capture the entire market via apps and sites.

But, in order to make sure that required apps, as well as sites, turn out as per their specific needs, there is a need for the proper team whether you have it in-house software development team or you outsource it or you hire a freelancer.

Employing the wrong people who execute faulty project management methodology can actually turn your thrilling project into a failure. There are challenges in in-house software development vs. outsourcing vs. hiring a freelancer. Below we will discuss in detail about all three of them.

At an initial glance, maintaining an in-house software development team seems to be just plagued with the monetary issue, but if you delve deeper, you will get to know that having an in-house software development team will rope in a plethora of issues to handle before you.

Benefits of hiring an agency

What most people like about having an in-house team is that you will have people dedicated to working for you. In case of an emergency event, you will be their first priority.

Also, in the course of time, they will fully understand all your needs and offer you solutions accordingly.

Whereas an outsider will always view you as a vendor and might not fully offer you a product as per your need.

There are some big obstacles which come with having an in-house team

  • The hiring of the right team
  • Over expenses
  • Varying intensity of work

If you want a permanent software development team, this calls for a major investment from your end.

Even if you have the required resources, finding skilled developers is also not a very easy task.

If at all you are not developing software on a regular basis your work intensity might vary and keep having idle workers will pinch you a lot.

Regardless, of the quantum of work, you will have to pay fixed salaries to the developers. So, in such a scenario outsourcing software work seems to be the most viable proposition before you.

Hiring a freelancer can be an extremely attractive alternative and a lot of businesses follow this path. But then as per statistics, 80% of the business concerns face the brunt of issues such as freelancer’s availability, his or her response time, and in some cases even the quality.

What’s more is that for big-scale concerns, even the most talented freelancers cannot cope up with the work pressure. Freelancers usually have their own way of executing things which might not be apt for businesses who are looking for organized and process-oriented service providers.

There are various types of software development outsourcing. There are certain companies which go in for body shopping. This means they rent the services of the developers as per their requirement.

You can even hire software development houses as outsourcing providers in order to build up your whole project.

Depending on the location of your outsourcing partner, you can categorize it as local or offshore software development outsourcing. All you need to concentrate is on the quality of work offered by your outsourcing providers.

Several business houses go in for a highly trained in-house team for software development. Nevertheless, a lot of companies opt for the outsourcing alternative, but it is you who has to decide on what is ideal for your business?

Take an informed decision for your company if you wish to touch true realms of success.

Challenges during in-house software development


Once, you hire an in-house developer, your whole work becomes dependent on him. If the developer goes on leave or is fraught with some issues the entire project will suffer because of him. This turns out to be a grave concern for the company as it also prolongs actual project completion time.

The recruitment process is quite tough

Even if you have the money; hiring the right people and setting all other things is not easy. This process consumes a lot of time as well as effort. Every company is on the lookout for the best in the industry, so getting in touch with the right people isn’t a child’s play.

The dearth of skilled people

Even though the market is flooded with developers, finding the right one is a big task. There is a serious paucity of professionals with the right skills. At times, if you find the right person, he might be charging too high. So, basically finding a skilled person in your budget is what actually holds relevance.

A huge amount of investment

Cost is the main issue which any company has to deal with if it plans to go for in-house development. For in-house software development, you do not need to recruit a full team of developers you even have to put in place a proper infrastructure to execute the entire process. Money is also required for imparting proper training to the employees. It is akin to expansion in work and any kind of expansion calls for the input of resources. So, basically significant investment is a prerequisite for in-house app development.

Maintenance of Workforce

There are many huge corporations for whom setting an in-house software development team is a minor thing. But, for them, the problem shows face when the project is completed or when the requirement ceases.  These companies find it hard to maintain the required infrastructure as well as resources later on. This maintenance expenditure is actually uncalled for the burden on the shoulders of these big companies.

Tools and technologies

Even though there are quite a number of development tools which are available free of cost and do not necessitate any kind of permission for distribution, there are several other technologies that call for permission for purpose of distribution. Thus, getting apt tools as well as technologies for development is a huge faltering block when you opt for in-house software development.

Varying areas of domain expertise

There are so many different aspects of app development. So, basically, you will need a domain expert to handle the different range of issues. For instance, the task of an app developer is just the development of the app, nevertheless, there is a need for a competent designer who can carry out the task of designing the app. This need for several domain experts infringes spontaneity and even enhances problems in the course of efficient project development.

Conclusion on hiring an in-house software development team

Conclusion on inhouse software development

The most viable solution to overcome all these different stumbling blocks is outsourcing the task of software development to a service provider firm.

There are several companies who are ready to do your task with perfection thus leaving you to hassle-free and comfortable.

Not only will this keep the capital cost within budget but you will also get a solution as per your need.

Also, when your project is outsourced, you can pay attention to other important things. Companies offer different software development models. Choose one in accordance to your need and budget.

Going in for in-house development might seem to be beneficial in the beginning, but when you put things into action, there are more stumbling blocks than what you anticipated. So, take a wise call and do what is ideal for your company.

Challenges with freelancer

Quality of work

Before you hire someone to look for the body of work done by them. An app speaks volumes about its developer. It is akin to a marketing tool. If the app is sloppy or outdated this means that the developer does not have a progressive and innovative mindset. So, whether you plan on hiring an agency or a freelancer you must review the app which is created by them. This will give you a realistic feel for how your work will be done.

Just make sure that your vision matches the experience of the candidate. Also, bear in mind this important point that agencies follow a standardized procedure for testing while freelancers usually conduct a self-test which might not be very accurate. With an agency, you have the benefit of the entire team working for you. If the developer gets stuck somewhere, there are other people in the team to bail him out of the situation. Nevertheless, a good developer is a good developer, irrespective of the fact whether he works independently or in an agency.

Scope of work

Usually, a freelancer offers you a solution as per your need. This propels the need for you to fully understand what technical specifications you desire. If you are not clear, then the outcome will not be up to the mark. So, if there is any lag in the specifications which you provide, the freelancer will never advise you to do something differently.

Post Launch Assistance

An agency offers better post-launch support than an independent worker. This is because agencies usually have a separate department which handles all after launch queries of the client. It is not that a freelancer will refuse your support but it is quite possible that he or she is hard-pressed for time. An agency generally offers complete details of their team’s availability for any post-launch support.

This is clearly mentioned in the contract. An app needs continuous upgrades in order to offer superb user experience and this is only possible if you are working with a team. Most of the agencies provide some kind of warranty or the post-launch guarantee. They anticipate operating systems updates and offer app owner the same before users start complaining. Freelancers by no chance can offer the same level of service to the app owners.


A very big point to be borne in mind with freelancers is their availability. It is quite possible that when you need a person he might not be available at that point of time and consequently, your project has to suffer. But, with an agency, you will always have a team which will be available to work on your app as and when the need crops up.


Any average agency possesses more experience than a freelancer because there are more people in the team. A freelancer has too many roles to play so it is quite possible that you will not get expert services.

Money and time spent

A freelancer will most likely deliver your project in a shorter time span. Agencies usually take a longer delivery time. But, then at the end of the day, all you want is quality. Also, as far as pricing is concerned freelancers might charge you less as compared to an agency as the overhead costs are relatively less. An agency has a team of people working for you, so they will definitely charge you more.

How to get maximum benefit while outsourcing?

Top outsourcing issues and their solutions

The industrial revolution gave a huge spurt to outsourcing. In fact, since late outsourcing has emerged as a full-fledged industry. Initially, outsourcing started with just the manufacturing sector but now there is hardly any industry which does not resort to outsourcing. Outsourcing is basically a routine of passing on work to the outside suppliers.

Top outsourcing issues and their solutions

Work is then completed by vendors rather than on-site. Outsourcing is a highly effective cost-saving strategy as a lot of times it is better to get the work done from outside than getting it done in-house. Outsourcing service providers now put in huge efforts to deliver products as per expectations of the clients through enhanced strategies.

From the owner point of view when you outsource work, you can apply all your energies and efforts on core tasks, leaving the non-core activities for the others. In the long run, the organization benefits from the same as it leads to efficiency and good organization.

Challenge No. 1 – The feeling of uncertainty amongst the In-house employees

It has been seen that mere mention of outsourcing lowers the morale of the existing team of employees. They develop a feeling of uncertainty and this propels them to look for the greener pastures. This can be a big shake-up to the organization as it can interfere in their human resource element.


Although severing of ties with some employees can be quite distressing, organizations can deal with this problem by building internal centers of excellence for individual areas.

By doing so existing employees will get past their fears and receive training in new vital processes as well as technologies. This will hone their proficiency, and they will grow further along with the company.

Challenge No. 2 – Choosing the perfect service provider

Finding the perfect software development agency is the prime base of the whole outsourcing process. In case there is any flaw in the selection process, frustration, as well as breach of promise, will slowly show face in the course of time.

To choose a partner for your outsourcing business is very hard. It is the challenge which most of the companies have to face. There are so many service providers available in the market.

The competition is so tough and every vendor claims to lead the others in the race. Any error in choosing the vendor can lead to grave circumstances in the long run.

So, you really have to be cautious while selecting your partner.


In order to tackle this issue, it is vital that you select the vendor as per strict parameters. Keep in mind the specific needs of your organization along with desired output needed prior to hiring any outsourcing agency.

Before signing any kind of contract, be sure to establish the kind as well as the duration of the contract. You can even go for a test run ahead of signing any long-term agreement.

After execution, critical performance indicators need to be scrutinized regularly. Continuous performance appraisal is a must to ensure efficacy in work.

Challenge No. 3 – Legal issues and deficiency incomprehension of contract

In case the legal consequences of an outsourcing contract are not clear it can have problems for both the company and vendor agency. This can even lead to total failure of the outsourcing decision.

A lot of outsourcing firms do not pay proper heed to the legal issues and then, later on, face a wide array of predicaments.

Outsourcing has been fraught with hugely stringent competition in the market. Outsourcing contact should not be a medium to serve a “win-win” situation.

It should be a means to achieve a positive outcome for both the parties lest it would lead to hostility, disappointment and bad-mouthing in the long run.


In order to stay away from any kind of legal complications, later on, the contracting parties need to adhere to all local legislation.

When the negotiations regarding the contract are going on, executives from both the sides need to be present and all terms related to the contact should be made clear so that informed decision making is executed.

Challenge No. 4 – Cultural Issues

In current times cultural stereotypes along with niceties are playing a vital role in shaping the outcome of the outsourcing contract. Basically, there are two kinds of cultural distinctiveness-

  • Corporate
  • Country-specific

It is not a simple task to set right the cultural tangles.


The complexities of the process which you intend to outsource and outcome of outsourcing to people belonging to varied cultural background need to be comprehended prior to signing the contract.

It is extremely essential to strike cultural coherence as well as synchronization. This can be achieved by having a good multi-cultural sensitization program for both the company and the vendor agency.

Challenge No. 5  – The practice of ‘Outsource and Forget’ is not practical

You cannot just outsource and stay complacent. Delegating work to an external service provider does not relieve you of responsibility to check how the final product shapes up.


Regardless of the fact that the company has delegated non-vital operations to a third-party, it needs to be prepared to handle any kind of emergency.

Apart from this advanced monitoring processes needs to be put in place, so that complete control is exercised on the outsourcing organization.

Challenge No. 6 – Huge language, educational and cultural inadequacies

There are significant language, cultural and educational barriers between people in developed nations and those from developing countries where the projects are usually outsourced.

These differences have a big influence on the capability of different offshore teams to completely comprehend minor nuances of the project and then to carry out the same in an effective manner.


Before hiring any service provider, a proper analysis of skills should be there. Also, it should be ensured that any kind of language and cultural barrier is duly handled in order to avoid issues later on.

Challenge No. 7 – Customer loss because of outsourcing

Customers place their trust in a company and if they get to know that the company is outsourcing work, they might just shift preferences. A company’s brand image is a sensitive issue. From the logo of the company to its products, customer service each touchpoint is actually an opportunity you get to retain and satisfy your customers.

If it is not handled in the right way, it can bring about customer attrition. Due to this reason a lot of companies feel reluctant to delegate work to an outsourcing vendor.


Customers are always concerned about their data safety, data which they provide and which is saved in companies’ databases.

It’s always better to bind the outsourcing vendor for appropriate legal non-disclosure agreement so that they must be assured that no business information will be leaked from outsourcing vendors end. Also, there should be a valid service contract signing between companies’ and outsourcing vendors. Nowadays, laws are strong enough to detain the wrong entity in the market.

Conclusion on Outsourcing

Conclusion on Outsourcing

In earlier days, when companies were not knowing the term, ‘Outsourcing’, it was easy for vendors to make them fool, take their hard-earned money and disappear but nowadays, there are strong laws and there are many ways down the line which can detain fraudulent outsourcing agencies/vendors.

So, nowadays, there is no harm in outsourcing your work to vendors. The only thing required, you must be smart enough to bind out outsourcing partners in appropriate non-disclosure agreements and service contracts.

If you will follow the right approach and you will never be in a quandary regarding your outsourcing decision.

Analyse thoroughly before you shortlist a technology partner and save yourself from any wrong catch.

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Ravi is an out of the box thinker, mentor, advisor and consultant to businesses, helping them in choosing the right technology partner. He possesses a talent for putting in place unique strategies & measures for streamlining operations, invigorating businesses and heightening productivity.

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