In-house development, also known as insourcing, describes software developed by an internal team, without external assistance from consultants or staff augmentation.
In-house development is like hiring an employee.
When you start a company, you need to hire people. Those people that you hire can be from all different departments. If you have a lot of marketing work that needs to be done, maybe you need to hire some social media managers and digital marketing experts. If you are struggling in the growth category then maybe you will need to hire someone for business development.
Companies will commonly hire in-house when they require the full-time resource of the individual, don’t require as much flexibility, and can afford the overhead costs of hiring an employee.
However, sometimes if you can’t afford to hire a full-time resource as an employee for some tasks, you will outsource those tasks rather than hiring employees to cover it.
In-house development is when you hire a full-time employee. In legal (IRS) speak, it is called a W-2.
It's one thing to know what a term means, but that is worthless if you don't know why you should know what in-house development is in the first place. Let's break down the importance of this tech term based on two high level categories. We'll walk through an explanation as well as provide a score, 1-10, that shows you how much you should care about in-house development.
The first will be if you do not have a product yet. This means that you don't have a physical product. Maybe you're in the ideation phase, or maybe you're almost ready to start development. Whichever it is, we'll get into why in-house development is important and why you should or shouldn't care about it if you do not have a product.
If you don't have a product yet, you likely won't need to worry about hiring in-house developers. However, you may need to hire in-house developers if you are ready to start building your product. If that is the case, study up! You have plenty of options ahead of you as to how you can go about building your product, and in-house development is one of those!
The second category is if you do have a live product. Maybe you just launched your business or maybe it's been live for years and you're continuing to improve its quality. Regardless of the scenario, if your product is live, in-house development carries a different weight.
If you have a live product, you likely already know this term because you have a live product. You may be outsourcing, you may be using a no-code solution, or you may be working with an in-house team. Regardless, congrats on your live product!
So you know what in-house development is, by definition. You know if you should care about it or not depending on your situation as a business/company/product. To dig in deeper, we will walk through some examples so we can make sure you really have a solid grasp on in-house development.