TechAhead is a leading IT Outsourcing Company with more than 12 years of experience. Join hands today, and witness a revolution in your business in front of your eyes.

1. IT outsourcing company
Why Outsourcing
App Development is
Better than In-house
Development?

2. What is
Outsourcing?
A long-term strategic
partnership with a specialized
organization that agrees to
perform an activity or a bunch
of several activities on behalf
of the businesses?
Before diving deep into Outsourcing and Odds in
favour of it, it’s important to understand
important concepts like Core Activities and its
counterpart, non-Core activities.
Core: Strategic business processes that improve
customer value, drive profit and helps expand
the business horizon.
Non-Core: Day-to-day business tasks with little
or no value to the business. Some of non-core
can be categorized as a value add to Core
business processes.
Core vs Non-Core Activities:

3. Core and the non-Core definition vary from business to
business. Eg. A manufacturing company deciding to
outsource its “Payroll Processing” to an external business
categorizes "Payroll Processing" as non-core but
performing organization (Outsourcer) categorizes it as its
Core business process, aligned with the definition above.
Drivers for Outsourcing:
Historically, the key driver of outsourcing has been cost-
saving. Here, businesses identify non-core business
processes and reach an agreement with an external
organization that specializes in performing those non-core
business processes. Another equal driver for outsourcing is
Improving Efficiency and Quality.
At the business process level, those processes are
outsourced that are low value, highly repetitive and those
that require highly specialized skills.

4. Types of Outsourcing:
ITO - Information Technology Outsourcing
Businesses outsource their IT functions like application
development, support, and data centre and network
operations.
BPO - Business Process Outsourcing
Outsourcing of specific business processes like Payroll,
Customer Services, and Supply Chain etc
KPO - Knowledge Process Outsourcing
Outsourcing of relatively high-level tasks that research
processes, financial services, business and technical
analysis services etc. Achievement of KPO objective is
highly dependent on skills, knowledge and experience of
people performing the tasks.

5. When deciding whether to outsource Application maintenance or go for in-house
development, companies should ask some key questions.
Impact to bottom-line: Will money be saved by outsourcing or in-house
development. What will deliver the added cost advantage?
Quality of Work: Will in-house development develop good quality applications?
Control of Work: If priority is to have control of the work, in-house development is the
way forward. A question to ask is, will controlling the work add any value to the
business?
Next, let's look at the pros and cons of Outsourcing Vs In-House development of
applications.
DILEMMA: IN-HOUSE VS OUTSOURCING OF
APPLICATION DEVELOPMENT

6. Outsource App Development
Pros:
Outsourcing application development allows
companies to access a large pool of talent from a
specialized outsourcing provider. This helps in high
quality & robust applications.
• Companies can seek expertise in the business
domain as well. Eg. a manufacturing company willing to
improve its supply chain process may outsource
application development to an IT Outsourcing firm
specializing in Supply Chain processes. Backed by huge
experience working with other manufacturers, this IT
company can give key suggestions to the manufacturer
to improve supply chain processes along with building
applications based on these redesigned processes.

7. For technology upgrade application development projects, outsourcing makes absolute
sense. Outsourcing provider can suggest multiple ways to upgrade technology which
includes upgrading on the same technology, newer technology or something reusable &
portable.
Testing is a key aspect of any Application Development project. Because of economies
of scale, an outsourcer can help in extremely robust testing of the application.
Availability of expensive automation tools that may not be cost-effective in-house
helps in robust regression testing.
With its experience on an application development project, the outsourcer may have
automated several aspects of application development stages. This reduces time-to-
market for new or upgraded applications
An IT Outsourcing companies put a lot of emphasis on process discipline and
incorporates industry-standard frameworks into its application development lifecycle.
These industry standards are robust and fail-proof for application development

8. Kiara Austen
CONS:
Application development is usually outsourced as project-based outsourcing. If
the scope of the project is not clearly defined, it causes cost and time overruns.
If business processes that an application supports are critical to the business, it
causes exposure to such business processes to an external vendor. This may
cause a huge loss to the company by way of leaks of secrets
IN-HOUSE APPLICATION DEVELOPMENT:
PROS:
The biggest benefit of in-house development is control. Companies have control
on the scale of customization needed for an application. Every organization is
unique, has unique processes as well that are dynamic in nature. To support this
dynamic nature, application changes are needed at all time which is more cost-
effective if handled in-house.

9. Another advantage is access to knowledge within the organization. Internal
developers also become business domain experts over time and this
combination greatly helps the organization. Such developers make fewer
mistakes while writing code and thus anomalies like downtime are reduced.
Other benefits include:
- No concerns on cultural boundaries
- No conflicts on who owns the code
Cons:
There is always a limit to how many developers a company can hire. This leads
them to have retrained the same developers on newer technologies. This reduces
depth in their technical knowledge thus not enough big picture to develop
applications using robust technical architectures.

10. Application upgrades is a tedious task. Handling this in-house can become
cumbersome.
The hiring of all kind of resources like a Project Manager, architect, designer
etc takes a lot of effort. Attrition is a key factor for the Software industry,
keeping them with the company is very difficult.
In conclusion, in alignment with service-based models, outsourcing application
makes absolute sense for any type of business for benefits cited above. Also, by
outsourcing application development companies can focus on their core work
and bottom-line.
TechAhead is a leading IT Outsourcing Company with more than 12 years of
experience. Join hands today, and witness a revolution in your business in front
of your eyes.

11. https://www.techaheadcorp.com/blog/why-
outsourcing-app-development-is-better-than-in-house-
development/
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