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In-House Development vs. Offshore Outsourcing: Real Cost Com

In-house software development vs IT outsourcing is a never-ending battle. Indeed, how to understand which practice is more cost-effective — with other conditions being equal?

The mere comparison of hourly wages of local and offshore professionals will not give an accurate picture. It's vital to factor in all the hidden costs that in-house development includes (payroll taxes, health insurance, paid time off, traveling, vacations and sick leaves, pension contributions, and more).


Imagine you need a Scrum team comprising 8 US professionals for your six-month project. Considering all the additional costs, we get the following numbers for comparison [per team, per hour]: $1,050.26 (in-house) vs $300 (outsourcing to Eastern Europe), i.e. building a software solution in-house will cost 3.5 times more.

Find calculation details on our site here and feel free to share your ideas.

Link to (Eastern Europe?) company removed by moderator.

Post was last edited on December 1, 2017 2:48 AM PST

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Yep.

In our Speakeasy forum, some members, when reading this, would quote their hero Donald Trump stating "China is stealing our jobs" and add a comment about Eastern Europe.

But most often it's cheaper indeed.

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This is spam with the link.

Check the forum policies again. Without the link your discussion can stay but with it, it's spam.

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