Outsourcing vs Insourcing IT: Pros and Cons (2021)

Outsourcing IT is one of the most en vogue techniques companies use to stay on budget. Versus insourcing, outsourcing IT provides cost-effective labor that could be impossible to bench onshore.

Recently there has been a big push to evaluate the pros and cons of insourcing (bringing labor back home) due to a strong economy and a large pool of tech talent that is a byproduct of the millennial generation.

OUTSOURCING VS INSOURCING IT: PROS AND CONS IN THE INDUSTRY:

Outsourcing is a great model allows for a larger value proposition and higher return on investment. Although the return is higher, communication is usually much more difficult compared to insourcing.

Outsourcing Pros:

• Cost-effective / lower wages and rates
• Allows ability to stay open 24 / 7 more efficiently
• Easily available talent pool with ability to scale to any size
• Workday can be extended to increase productivity and can reduce time to market

Outsourcing Cons:

• Potential for miscommunication via language barriers
• Higher management costs
• Different time zones can be troubling for direct management

Versus outsourcing, insourcing is a great model in that it gives you the ability to work closely with a geographically close team who work in your time zone and who can communicate smoothly and easily with you.

Insourcing Pros:

• Ability to work closely with team members
• Lower cost of management (%)
• Easy and smooth communication
• Ability to physically travel and do business (especially useful when discussing hardware and server maintenance in the IT industry)

Insourcing Cons:

• Expensive compared to offshoring
• Often difficult to find the right type of talent at a moment’s notice
• Lower levels of certifications

Get the Guide: “How to Hire an IT Staffing Agency”

As providers of outsourced and insourced IT services, we here at tCognition see a future in both on and offshore development.

We’ve even gone so far as to create an amazing full guide to determine how to hire the correct IT staffing company.