Even without the pandemic factor, companies everywhere have considered switching to remote working. In 2019, the global market for IT outsourcing was worth $92.5 billion, and this number grows rapidly. Moreover, 78% of businesses that outsource feel positive about the experience and 65% of them are planning to increase their outsourcing efforts.

If you want to prepare for this “new normal” and reap all the benefits, this article is for you. We compare the traditional in-house model to the two types of outsourcing – remote (fixed-bid) and dedicated team. The extensive list of pros and cons will let you know the best choice for your situation. So let’s begin!

In-house Team

This most common model simply means using the in-house team for your projects. It offers maximum trust, a seamless team structure, and communication. Acquiring the best talent may be hard, but if you have the resources for that, there is no better option. That is why large IT companies like Amazon, Apple, PayPal rock this model.

However, there are plenty of reasons why companies begin to consider in-house vs outsourcing software development. Many are moving apart from this model to cut on costs, optimize hiring processes, and simply get an IT project done by someone while focusing on core goals.

In-house Team fits for:

•         IT companies that have more resources
•         Your main projects and daily activities
•         (Almost) unlimited budget and time for software development
•         Ability to spend more time and resources on hiring and onboarding
•         Budget to pay for the local workforce, office, overhead, etc.
•         High level of intellectual property and data protection
•         Long-term strategy and building company culture
•         The product that needs to be constantly updated and optimized

In-house Team Pros:

Easier communication, management, and culture. Face-to-face interactions are a substantial advantage, as well as seamless operations, and naturally formed company culture.

Protected data. 23% of companies avoid outsourcing primarily due to cybersecurity concerns. However, it gets better over time. If you find a trustful vendor (through platforms like Clutch, for example), the risks are minimized.

Transferable skills and standards. An in-house team is a great way to ensure product expertise and development continuity. However, you might bear the costs of “leveling up” the employees, as well as avoid “tunnel vision”.

In-house Team Cons:

High costs. Outsourcing allows hiring the same or better professionals for less pay, and avoid expenses like office rents, software licenses, etc.

Responsibility for hiring and management is on you. Building a professional in-house team takes a lot of time and effort, as well as updating their skills, and fighting a high staff turnover.

Lack of talent and versatility. You are limited to a number of local specialists. Even if you are an accomplished IT company, your employees are likely to be experienced in a limited number of areas.

Work Interruption. Unexpected sick leaves, vacations, and layoffs can lead to massive delays. With remote teams, a missing member can usually be replaced by a vendor within hours.

Remote Team

A traditional remote team (fixed-bid) is a type of outsourcing in which you can hire remote experts through cooperation with a vendor, usually to fulfill a project with a clearly defined scope & deadline.

Companies that hire remote workers include Google, Slack, Alibaba, and many others. They leverage custom software development by experts at affordable costs. Managing remote teams requires certain preparation (searching for a vendor, writing the requirements), but then it gets a lot easier than in-house.

Remote Team fits for:

•         Companies that don’t specialize in software development
•         IT companies who have other priority tasks
•         New supplementary projects
•         A pilot project with a new vendor
•         Defined project scope and deadline
•         Fixed requirements
•         Gaining the expertise that you lack
•         Bringing innovation and fresh ideas

Remote Team vs. Dedicated Team Pros and Cons

Dedicated Team

A dedicated team is a form of outsourcing when you collaborate with a vendor to hire and co-manage experts that will work exclusively with you. This model is best for large and long-term projects and achieving certain business goals.

They say that it combines the best from the in-house and fixed-bid remote models. Working with your dedicated team feels just as if they were in the neighboring room. While a remote team can work with different clients simultaneously, dedicated experts devote all their time to the tasks you assign. You can manage the scope as you go to reach the best results in the long-term.

Dedicated Team fits for:

•         All companies, whether they have software development expertise or not
•         A large project or pool of tasks
•         A project which scope and timeline that might change
•         The requirements that might change a lot during the discovery phase
•         Not being limited to a strict budget
•         Freeing up your core team for other tasks
•         Rapid scaling and expanding the team
•         Bringing the expertise to boost your company even without clear deliverables
•         Engaging a team of experts in a narrow field with or without PM
•         Switching from a fixed-bid model to a dedicated team with a proven vendor

Summary. The remote team model has proven to benefit many businesses through their clear-scope, short-term goals. However, if you want to outsource work to experts but manage everything as if they were in-house, the dedicated team model is highly preferable. Both of the models can significantly boost your business, adding up to or even replacing an in-house team. All you need is to choose according to your needs.

Bonus: In-house Team vs Remote Team vs Dedicated Team Comparison graph