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Outsourcing vs In-House Development: Which is Better for Product Development?

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July 17, 2023
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min read

Building a successful product involves multiple decisions, one of the most critical being whether to build your product with an in-house team or outsource the development. Both approaches come with their own sets of advantages and potential challenges. This article aims to delve into these two strategies, providing insights to help you make an informed choice.

Understanding In-House and Outsourcing

Before we compare these two models, let's quickly define what they mean in the context of product development:

In-House Development: This approach involves recruiting and managing a dedicated team within your organisation to build the product. The team generally consists of developers, UX/UI designers, product managers, and other relevant roles.

Outsourcing: This model involves hiring an external company or independent contractors to build your product. The outsourcing partner can be located anywhere in the world, often providing services at a lower cost than local resources.

Advantages and Disadvantages

In-House Development


  1. Control and Visibility: With an in-house team, you maintain complete control over the development process and have real-time visibility into the project's progress.
  2. Team Alignment: In-house teams usually have a better understanding of the company's mission, culture, and goals, which can result in a more cohesive product vision.
  3. Quick Adjustments: Changes and updates can often be implemented more quickly with an in-house team, due to direct communication and proximity.


  1. Higher Costs: Hiring, onboarding, and retaining an in-house development team can be costly, especially when considering salaries, benefits, office space, and training costs.
  2. Limited Expertise: Depending on the complexity of your product, you might require diverse skills and expertise. It can be challenging and costly to assemble an in-house team that covers all these areas.
  3. Scaling Difficulties: Scaling an in-house team (up or down) can be time-consuming and expensive, impacting your product's time-to-market.



  1. Cost Efficiency: Outsourcing can be a more cost-effective option, particularly when partnering with companies in regions with lower labour costs.
  2. Access to Global Talent: You have the opportunity to work with experienced professionals worldwide, giving you access to a broader range of skills and expertise.
  3. Flexibility and Scalability: Outsourcing allows for easier scaling of your team based on the project's current needs.


  1. Less Control: With outsourcing, you might have less direct control and visibility into the development process.
  2. Communication Challenges: Outsourcing can sometimes involve language barriers and time zone differences, which can complicate communication.
  3. Quality Concerns: If not managed correctly, outsourcing can lead to compromises in product quality.


Deciding between in-house and outsourcing development isn't a straightforward choice. Each approach offers distinct benefits and challenges, and the best fit depends on factors like your product complexity, budget, time-to-market expectations, and internal resources.

At Thought&Function, we strive to combine the benefits of both models, offering our clients the control and visibility of an in-house team coupled with the flexibility, scalability, and cost benefits of outsourcing. By aligning with your vision and working in an Agile manner, we ensure your product is built to the highest standards, delivering maximum value to its users.

In the end, the choice between in-house and outsourcing is a strategic one. Choose the model that best supports your product vision, maximises your resources, and ultimately brings your product to life in the most efficient and effective manner.