Insourcing vs Outsourcing – Pros & Cons

Insourcing vs Outsourcing - Pros & Cons

In this world of constantly growing and shifting information technology, every tech startup founder is concerned about the means through which he will build up his project. IT sourcing has brought you outsourcing or insourcing. 

Either it is insourcing or outsourcing, you must consider these factors before choosing to prevent repercussions in future.


Recruiting, interviews and onboardings. Insourcing is like hiring permanent staff for the organization. Insourcing provides an option to build your team from scratch based on the required skills and experience needed for a project. 

Companies like Amazon, PayPal and Facebook hire in-house developers with high payrolls to keep the project under control and their nose. You can build a fresh team from scratch to deliver your project the energy and determination it requires

Pros of Insourcing or In-House Development

Opting for In-House Development gives you enough perks to realize the project significantly. From direct communication to immediate support, it promises compliance with the company’s culture and values. Let us have a look: 

  • Compliance with Company’s Culture: By opting for Insourcing, you need not take care of the culture of your team based in some other country. While recruiting, you will have the option to hire those people who will comply with your company’s culture and values. When a team operates in synergy, it achieves better results. 
  • Direct Communication: No need for bouncing emails and video calls. The communication gap will no longer be a worry. The physical presence of your team allows you to communicate with them directly. Vis-a-vis interaction is a perk which outsourcing cannot promise. Direct communication speeds up the project, and you can deal with queries instantly. 
  • Instant Support: No doubt there will be misunderstandings of the guidelines, and your team comes up with issues they are facing. Even after the deployment of the new product, there will be errors and flaws. To deal with these issues, Insourcing allows you for immediate execution. Whereas engaging with an outsourced team, the response may face a delay from both ends. 

Cons of Insourcing or In-House Development

With the bright side comes the dark side as well. Exploring and preserving talent is not an easy task. It is costly as well. Do not forget! You also have to upskill your team to cope up with the changes. Let us get into the dark side: 

  • Costs and Coughs: The payrolls are a migraine. The average salary of an IT developer in the US is around 70,000$. You will also have to pay for their coughing if they get sick. Insurance, social security and recruitment, all are very demanding. Imagine one of your employees having fun at San Francisco beach, and you are paying for his beer bottles. 
  • Upskilling: The introduction of new technologies, tools and languages is a ground reality. There will be a constant change. You will need to keep your team adapting to changes to keep up the growth of your product. Sometimes, investment in tools and training costs too much. 
  • Bid for Talent: Talent is like a thousand-year-old necklace. No one will ever have right over this necklace. If your competitors value more than you, they can have the necklace at any time. The vortex of counter offering better benefits and increasing the payrolls never ends. Else, you lose the talent.

When to Opt Insourcing?

If you have plenty of capital and you can immediately address the problem, then Insourcing has greater good for you. 


Favored for the scalability and low costs, Outsourcing stands for handing over your project to an external agency. Outsourcing has become an ever-growing industry. Usually, a contractual agreement is signed for insurance and safety purposes. 

Pros of Outsourcing

Outsourcing saves you bucks as many countries have lower developmental costs. Like, an IT company in Islamabad, Pakistan never compromises on quality even when the returns are comparatively low. Let us take a look over the advantages of outsourcing: 

  • Control over Cost: Your country might have high development rates. When local talents have premium costs, you can outreach the freelancers who provide quality at lower rates. Through outsourcing, you can make freelancers execute your projects with the same level of expertise.
  • Sea of Talent: Outsourcing takes you to the sea of talent. You are not confined to a limited choice of candidates. You will have an immense sea of talent to choose from. Outsourcing saves you from the labor to go through resumes and recruiting. 
  • No Technology Constraints: Not every Jack is even a master in his skill. Your project may require diverse skill sets. To hush up such worries, you can collaborate with IT firms specialized in different technologies to build you a solution.

Cons of Outsourcing

Outsourcing exhibits some loopholes despite having enough advantages. From unreliable communication to security concerns, you must take a look at the disadvantages of outsourcing before you outsource your project:

  • Less Control: Who knows if the outsourcer is working on a project of some other client as well? We have no idea if he is doing his best efforts or not. You are in oblivion and have little control over the development and progress of your project. Sometimes, it takes days before your emails are replied. An instant bug fix is still a theory in the outsourcing world. 
  • Communication Gap: Probably, you are interacting through a foreign language. Language differences will cause difficulty in understanding the concerns appropriately. The varying time zone will be a problem in meeting the schedules. 
  • Security Concerns: There is a possible chance for your information to be compromised. You may face copyright infringement of your data and project. You must sign an NDA to protect and secure your interest legally. 

When to Opt. Outsourcing: 

If you have budget constraints and your streets lack some particular talent, you must opt for Outsourcing as it will be the best option in that case. 

Final Words 

The opting of either outsourcing or insourcing depends on your kind of project and your preferences. Whether you choose any of them, I wish you good luck!

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