Pros and Cons of Hiring a Software Development Company

by Dave Erickson
11 mins read
  1. Business
Decorative image for Pros and Cons of Hiring a Software Development Company

Some have equated the experience of choosing and hiring a software development company to that of going to the dentist for a root canal, or removing your finger nails with a pair of pliers.

The reality might not be that painful, but choosing a software development company can be challenging, considering that there are many companies who list themself as software developers, but only a few who really fit your relationship, workflow and development needs.

As a development company, ScreamingBox was started by people who used software development agencies, and wanted something better; and it is from this experience that we have put this article together.

Building a software engineering project is generally complex, time consuming and expensive, but it doesn't necessarily have to be this way. In this guide, we’ll give you an in-depth perspective on what it’s like to work with a development company, the pros and cons, and how you can successfully choose the one that matches your expectations.

Why Outsource A Development Project?

Partnering with a software development agency presents a strategic opportunity for businesses of all sizes to leverage specialized expertise, achieve cost efficiencies, and accelerate time to market without diverting focus from their core operations.

However, the path to a successful partnership involves navigating challenges such as finding an agency that aligns with your business culture and goals, ensuring effective communication, maintaining quality, protecting intellectual property, and securing long-term support.

For CTOs, CIOs, and project managers, the decision to outsource software development demands a careful, strategic approach to selecting an agency that not only meets technical requirements but also complements their business objectives and values, ensuring a collaborative and productive partnership.

Pros and Cons of Hiring a Software Development Company

If you are reading this article, you have decided to use a Software Development Company because you either have no internal development team, or the team you do have has too much work already or a different tech stack then the product needs. In these situations, there is a question in the back of your mind… Is it really better to hire an agency, or is it better hire individual developers as contractors or employees?

Therefore, it is really important that you are fully committed to finding the right Software Development Company before you start, so you don’t waste your time only to hire an in-house team.

Benefits of a Software Development Company

  • Access to Specialized Expertise. Software development agencies bring a wealth of specialized knowledge and experience across various technologies and industries. This expertise allows them to tackle complex challenges, innovate, and deliver high-quality, scalable solutions that might be difficult to achieve in-house without significant investment in recruitment and training.
  • Wide range and variety of development experience. A software development company often holds a significant advantage over an in-house team, primarily stemming from the diverse experience of its agency team developers. These developers typically engage with a broad spectrum of projects across various industries, offering exposure to an extensive range of technologies, methodologies, and problem-solving approaches. By constantly tackling diverse challenges inherent in different client projects, agency developers hone their skills and adaptability, enriching their expertise far beyond what an in-house team might encounter within the confines of a single organization. This exposure not only fosters innovation but also equips them with a nuanced understanding of best practices and emerging trends, enabling the software development company to deliver robust solutions that draw from a wealth of collective knowledge and experiences.
  • Cost-effectiveness in the long term. When hiring a software engineering company, you outsource talent for a particular project instead of hiring permanent employees. This will save you money and resources in the long run. When the project is finished, the agency’s developers will move on to another client’s project and your only cost will then be maintenance which you can do internally or outsource.
  • Scalability and Flexibility. Agencies provide the ability to quickly scale development efforts up or down based on project requirements, without the logistical and financial constraints of hiring or laying off in-house staff. This flexibility is invaluable in responding to market demands or pivoting project scopes with minimal disruption.
  • Security. Not all companies have an established cyber security system to protect their data. Most software development agencies do, so you will feel safer trusting your corporate information in their hands.
  • Insurance. Good Software Development Agencies will have a complete business insurance package.
  • Save time and money from the hiring process. According to Glassdoor, the average cost to hire a new employee is $4,000 ( A development team usually requires multiple team members to build a successful product, so this number would be higher for you if you’re starting from scratch.
  • Agencies already have an established system. Building a product development system takes time, failures, and resources. That is something you won’t have to deal with by hiring an external software engineering company.
  • Complete Teams. Most digital development projects may require developers for most of the work, but they may also need UX, UI, QA and Project Managers for some of the work at different points in the project, and many companies could not hire all these people full-time when they are only needed for a short period of time. Agencies can, since they have multiple projects they can have these people work on part-time as needed. With dedicated teams and access to a broad spectrum of skills, development agencies can accelerate the development cycle, enabling companies to bring their products to market faster than if they were to develop them in-house.

Cons of a Software Development Company

  • Communication is not always straightforward. Most companies hire offshore development agencies. This means that the majority of team members live outside your country or time zone. This type of agency usually has highly qualified experts with lower rates based on their team’s cost of living. However, managing a remote team is not always easy especially with different time-zones. Communication is mostly held online, so you need to invest in tools that streamline collaboration processes, such as Slack, ClickUp, Jira, etc.
  • Depending on what type of agency you hire, it can be expensive. On-shore Development Companies can be expensive, since most on-shore team members live in your region with your cost of living. This usually means higher quality and a more seamless communication experience, but it’s significantly more expensive. On-shore agencies can also meet in person, which is often better for communication. Off-shore Development Agencies are more cost-effective, but come with the potential for lower communication and time zone issues. Some off-shore companies like ScreamingBox have Near-shore developers in similar time-zones for communication heavy contact points, and off-shore developers adding development bandwidth.
  • Quality Assurance and Project Delivery need lots of definition. Ensuring the final product meets quality standards and is delivered within the agreed timeline and budget can be a challenge with an agency. Sometimes companies are not able to communicate clearly to an agency their quality requirements and agencies may use their own best practices if no guidance is given. In-house teams have more direct communication with project management and the product owners.
  • Intellectual Property protections vary. Protecting sensitive data and intellectual property is a paramount concern for many businesses, and some development agencies may lack the structure to support or insure this security. Establishing trust and clear legal frameworks around IP rights and data security is crucial when engaging with an external development partner. Make sure any development agreements protect your IP and will not allow for the withholding of developed IP. Obviously, with in-house development this is easier to control.
  • Long-Term Maintenance and Support is not always part of the package. Once the project has ended, development has not necessarily ended. Most software, once developed, will need some kind of maintenance to make sure it functions correctly as 3rd party libraries, apps and platforms change and update. Ensuring ongoing support and maintenance for the developed software can be a challenge, especially if the development agency does not provide these services post-launch. Companies must consider the long-term viability and support of their software when selecting an agency.

Wrapping Up

Hiring a software development company can be one of the best decisions for your business. They’ll provide faster outcomes, an established production strategy, and a specialized team ready to build your product. However, you should be careful when choosing the right company.

Once you have fully committed to using a digital development company to build your digital product, weather web or mobile - contact ScreamingBox .

P.S. - The featured image was created using Dall-e-3 using the following prompt: I need a lifelike image of a hard working software developer working at a computer searching on-line for a software development agency. This developer has a painful look on their face, with glasses and dark hair. Above their head is a landscape oriented picture of a spaceship.

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