In-House Vs. Outsource Blockchain Development: Which to Prefer?

We all have seen how blockchain has emerged as the preferred technological stack for a growing wide range of businesses, powering cryptocurrencies, finance applications, supply chain systems, and more.

Also, with the emergence of web 3.0, there is no other scope for businesses other than implementing blockchain technology to evolve their services on the newly connected internet.

Blockchain is rapidly developing innovative business models in a wide range of industries, and it is quickly becoming a focal point for numerous startups and large corporations throughout the world.

Experts have declared blockchain to be the technology of the future, claiming that it will soon be integrated into our daily lives because of its enormous potential, speed, and flexibility.

So, if you have made a smart decision to move forward with developing your Web or Mobile Applications using blockchain technology, the next question that might arise would be whether to choose an In-House blockchain app development or to Outsource it to a compatible blockchain development company.

Let me give you a clear and concise overview of both approaches.

What is In-House Blockchain Development?

In-house development is the process of forming your own team from the ground up to create a blockchain-based application for your company. You’ll be responsible for filling required positions based on the skill sets and experience needed to finish the project. You must go through the advertising, interviewing, and selection process to build your own IT team.

If your business is only focused on an IT product, hiring in-house can be feasible. Selecting in-house development is similar to hiring full-time staff for your business. Amazon and Paypal hire their own developers, giving them complete control over the project at a significant expense.

Advantages of In-House Blockchain Development

In an in-house development scenario, you have the folks who work with you in your company. Whatever the problem is, you can simply head over to them and get it resolved in no time. They have a better knowledge of what your requirements are in the project as you all work under the same roof.

Other advantages of hiring an in-house development team include:

  • Fits Your Corporate Culture

One of the most common requirements for businesses seeking to outsource is finding outsourced partners who understand their business culture. With In-house teams, your entire IT team knows how to align with the company’s culture.

They understand exactly what the company is trying to achieve or tackle with the product they’re working on. While building the product, they also fit with your company’s goals.

  • High Specialization & Expertise

In an in-house development scenario, you will choose the compatible It professional of the domain. These professionals gain a deeper understanding of their skills as they deal with the same or comparable types of difficulties on a regular basis.

This allows them to become highly focused professionals in their subject. Consequently, they are likely to perform better and develop faster.

  • Technical Independence of the Project

In-house development, of course, gives your project more technical independence as compared to outside consultants. The company retains all critical technical competencies. Not only does this affect the development process, but also the ability of the core team to provide technical support and sustain the product over time.

Adopting an in-house blockchain development strategy can help you save time and money in the long run when it comes to product maintenance and support. There’s no need to spend more time identifying what’s faulty and how it should work if the same team looks after your product after it’s released.

  • Better Control Over the Process

Since the entire work process takes place within your own company and is handled by your own workforce, you have more supervision over both the staff and the development process. Your professional feedback will therefore be available in real-time and can be handled in a more timely and effective manner.

Disadvantages of In-House Blockchain Development

Though there is closer communication and a greater cultural fit with high real-time control over your project — all these advantages carry with them certain inherent drawbacks.

For hiring the crew, you’ll need the overhead costs of building the appropriate space and providing appropriate IT equipment.

And that’s not all; here are a few more drawbacks:

For organizations with a limited budget, hiring and establishing a development staff can be prohibitively expensive. Expanding the area, putting up the techs, and installing technology and software might all cost the organization a large sum. Other hiring costs, such as leaves, training, and employee perks, would need to be considered.

  • Limited Tech Stack and Expertise

Another major reason why organizations struggle to establish an in-house project team is that they may not be up to date on the latest technologies. You hire them, and if a new technology emerges, you must either train them or allow your competitors to take advantage of it first.

To find good and experienced professionals in any field, you should triple your efforts when it comes to blockchain. As a result, organizations often spend months or even years looking for qualified personnel.

  • Higher Developer Turnover

It is logical for developers to seek out better chances and make the most of the current developer shortage. The market is on the lookout for talent, and developers will take advantage of every chance that comes their way.

As a result, the developer community has a high staff turnover rate. Companies may have to contribute additional costs to keep the developers they’ve hired.

What is Outsourcing Blockchain Development?

Outsourcing blockchain development means entrusting the creation of a product to a third party. The requirements are usually communicated to the outsourcing agency through a contractual agreement.

Blockchain is a rapidly growing niche, and there is still a scarcity of developers with solid technical knowledge and a few years of expertise. Therefore, outsourcing is a sensible option if hiring a blockchain specialist is proving difficult. Outsourced development is popular due to its low cost and scalability.

The global business process outsourcing market is predicted to reach USD 261.9 billion in 2022, up from USD 245.91 billion in 2021. Slack and Google are two well-known companies that outsource their IT development.

Advantages of Outsourcing Blockchain Development

A Statista report estimates that the global IT outsourcing market will reach $396.30 billion in 2022.

Many businesses are taking advantage of the enormous potential of outsourcing software development to countries like India, China, Ukraine, and other countries. Here are some advantages that are enticing businesses to begin outsourcing:

Outsourcing your blockchain development will also save you time in terms of hiring and managing a team, resulting in a higher TTM index. You will receive a close-knit team eager to assume your assignment when you outsource.

Whereas in-house jobs require you to devote a lot of time to time-consuming recruitment efforts.

Also, cost savings is undoubtedly one of the most crucial advantages of outsourced development, which is critical for any type of organization, from a small startup to a major corporation.

It is usually less expensive to hire external specialists than to assemble your own team. If an uncommon situation emerges, they may have greater practical expertise, allowing your organization to respond faster and more successfully.

One of the most important advantages of outsourced development is the preset strategy. The outsourcing developers team has established and correctly set up all development and associated business processes.

A young corporation, by definition, lacks this because it is a newly formed corporation with no pre-established processes.

  • Reduces Burden From Core Resources

With hundreds of jobs on their plates, your core staff and supervisors may be overwhelmed, indicating that you’ll need to outsource. Outsourcing removes the task from their hands, allowing them to concentrate on their key strengths and improving the company’s major offers.

You won’t be complaining about employing additional specialists if a situation demands quick or temporary team growth. Outsourcing firms typically employ professionals with a diverse set of skills and experience. So you can effortlessly delegate another duty to them, something you won’t be able to do if you do everything yourself and in-house.

  • Accelerated Time to Market

Have a project that requires the addition of new personnel or technology? You won’t have to waste time looking for suitable developers and then teaching them the required technology.

Simply hire remote developers or have your project managed from beginning to end for a faster time to market.

The most expensive part of in-house development is searching and hiring and then trying to keep the talent you’ve discovered. When it comes to outsourcing software development, you can simply identify competent vendors, then outsource to partners in other countries to get your project completed.

  • Access to An Advanced Tech Stack

An outsourcing firm frequently works on projects from a variety of fields. As a result, its programmers may offer a broader range of advanced technologies. You can also look through the company’s portfolio to see if they have a case similar to yours to ensure they know what they’re doing.

  • Access to a Pool of Talented professionals

The technology stack available outside is limitless, whether you’re looking to employ engineers or remote teams for a specific project. You are not constrained by technological or geographic limitations.

There are tech specialists from all around the world working for you. Whatever technological stack your company needs, you may find it in the enormous skill pool.

  • Committed to Delivery and Performance

In-housing locks you to a contract with the person, and you cannot simply recruit or fire them based on need or performance. When it refers to outsourcing, however, there is the extra benefit of being able to rehire only if the project meets expectations. It is entirely up to you whether or not to commit to the software outsourcing firm.

Disadvantages of Outsourcing Blockchain Development

Just like an in-house development system, outsourcing web development or mobile app development to an external business has its downsides too. With a wonderful set of benefits come certain downsides and drawbacks. Here are a few disadvantages of outsourcing:

  • Less Control Over the Project

There is an absence of direct communication with the team of developers while working with an external team. This could lead to misunderstandings and a lack of transparency.

This issue could, however, be rectified by hiring the right contractor and establishing proper pre-contractual agreements about effective communication processes, reporting, and so on.

Many businesses collaborate with experts from all over the world. Despite English’s worldwide popularity and status as the first IT language, there is always room for misunderstanding. This could result in more in-depth talks during the discovery phase.

  • Choosing the Right Vendor

When hiring a member of your in-house team takes multiple rounds of face-to-face interviews and meetings, hiring someone you haven’t met even once is a difficult undertaking. You could be duped by the company’s false claims or successes and end up with a subpar product after development.

In-House Vs. Outsourcing: Quick Summary

Factors In-House Development Outsourced Development
Technical Expertise Limited and would need timely upskilling. Offers a high-end technical stack with industry specialists.
Cost The cost of hiring, training, and retaining employees is comparatively high. Due to large talent and outsourcing to other countries exchange rates, the cost is low.
Time to Market Slower Agile and Quick
Communication In-person real-time communication with easy transfer of information. Difficult to communicate with the remote team.
Culture All the staff is well-acquainted with your company’s culture. It may not be culturally fit at times.
Flexibility No flexibility in terms of maintaining the team and developing the product with efficiency. High flexibility due to adaptive and strategic approach.


The Take-Away

So, now that we’ve walked over the advantages and disadvantages of outsourcing versus in-house development, how should you proceed? Should you hire an in-house team or outsource?

When it comes to outsourcing vs. hiring, there are no black-and-white answers. To stay competitive, you need the best of both worlds. Create an in-house team for your key competencies and outsource when you require specialist support in a particular technology or project topic.

Divide your responsibilities and maintain your in-house teams on the key goals of increasing and strengthening the company’s position, as well as collaborating with outsourcing agencies for special projects or technological needs.

Jason Stathum

A Content Marketing Specialist with over 7 years of experience. I have experience in creating brand awareness for various app development companies. Currently I am working with Parangat Technologies & helping them spread awareness about digital transformation.


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