What Is The Difference Between Outsourcing and Outstaffing and Which One to Choose

When you decide to do software development, there is this common question: what the difference between IT outsourcing and IT outstaffing is and which one is better. To answer these questions we need to dive into the details of each model and see in which cases you should choose to outsource and where you’d rather prefer outstaffing.

What is Outsourcing

Outsourcing is a type of business relations when one company hires another to do some part of the job. The outsourcing company has its own employees that do the job for the client. In this case, the outsourcing company acts as an employer, thus is responsible for wages, equipment, workers hiring and training, while a client company just provides an employee with tasks.

What is Outstaffing

In this model, software development company hires and maintenances the development team which is fully at your command. In a nutshell, you hire a remote team which is a part of your in-house team and you treat them as your own employees, not employees of a service provider. This extended team can be managed by your in-house employees or you can hire a remote manager as well.

The difference between outsourcing and outstaffing

Here is the purpose of your visit: what the difference between software outsourcing and outstaffing is.

Outsourcing companies usually work on the whole project or on big tasks which require a team of developers. In this case, IT company provides support and manages the whole project. The customer rarely has access to the team and in most cases works with a project manager.

And in outstaffing model customer works with solo individuals by himself, for example when he needs to extend the team with a specific skill.

Pros and cons of outsourcing

Pros

• Save’s time and effort;
• Less management needed;
• The outsourcing company is fully responsible for all the tools and equipment needed to develop the project;
• The customer doesn’t have to hire people.

Cons

• The customer doesn’t fully control the development process;
• Constant quality assurance and tracking whether everything goes as planned;
• The rates of developers for outsourcing are usually higher than for outstaffing.

Click here to learn more about oursoursing pros and cons.

Pros and Cons of Outstaffing

Pros

• hire great professionals without paying high price and taxes;
• full access to all of the team members;
• full control of the development process;
• the lowest cost in comparison to other business models;
• team size flexibility and scalability.

Cons

• a customer is responsible for hiring professionals;
• micromanagement and adoption process of a new employee;
• quality of delivery and work is on the customer and his team.

Which one to choose?

It all depends on your goals and how much control you would like to have. If your company doesn’t have in-house software developers and you need to develop the whole project from scratch, you should consider outsourcing as an option for you.

On the other hand, it’s better to choose outstaffing if you just need a person with concrete skillset or you want to handle the development process and management by yourself. If you have very limited resources and time, then go for outsourcing.

Now you have two options to choose from. Both business models can help grow your business and achieve goals. With both outsourcing and outstaffing, you will need to spend time with professionals to avoid frustration and unresolved issues. Therefore, make sure to understand all the pros and cons and choose the best business model for your needs. If you need an expert opinion, every solid IT company will provide you with a consultation.