IT Outsourcing vs Outstaffing: Differences, Benefits & Developers Rates by Region in 2023–24
Over the past five years, more than half of the global organizations claim to experience a skills shortage that has consistently held them back in development and growth. According to Statista, the post-pandemic times still show a huge talent shortage in the tech industry: in 2022, nearly 70% of companies claim to lack qualified labor, the highest rate over the past 10 years.
Fortunately, the hiring niche in IT also evolves, introducing multiple models and progressive solutions to the market. If you’ve landed on that page, you are surely aware of the two most popular — IT outsourcing and outstaffing services, which already helped thousands of companies to fill the gaps with the right expertise and tech stack.
Though both models offer distinct benefits for startups and prospective ventures, understanding their differences will help you maximize the developers hiring process and get the highest profits for your business.
In this article, we’ll review the specifics of outsourcing software development and IT outstaffing services and explore the pros and cons of each to help you come up with the right solution for your project or business needs.
Let’s dive in!
Key Differences Between Outsourcing and Outstaffing Models
Despite both models helping to enhance software development with the right hiring expertise, the difference between each starts right from their meaning. So, let’s first analyze the outsourcing and outstaffing definition in the context of hiring software developers.
What Is Outsourcing?
In IT and software development, outsourcing is a common business practice of hiring an expertise party outside a company to perform services or build products that are fully tailored to the business goals and needs.
Being first recognized as a business strategy in the early 1990s, it became a powerful solution to optimize workflow and development costs without sacrificing the quality of the end products. Today, the outsourcing model has been known as a proven way to focus on the company’s core competencies and business goals while entrusting complex and expertise-specific processes to external development vendors.
What Is Outstaffing?
Outstaffing, also known as staff augmentation, has a slightly different approach to developers’ hiring. Unlike outsourcing, where the entire project is delegated to an external company, it implies involving remote developers with particular expertise to work together with an in-house team.
According to the outstaffing definition, businesses can retain control and oversight of the development process while augmenting their team with additional resources, skills, or tech stack needed.
Whether you’ve decided to outstaff or outsource software development, understanding the major benefits and potential drawbacks is of the essence. So, let’s review the pros and cons of team outstaff vs outsource to identify which will work best for your business objectives.
Pros and Cons of the Outsourcing Model
To better understand whether outsourcing an IT company for your project is worth it, we’ve covered this solution’s essential benefits and possible drawbacks.
Pros and Cons of the Outstaffing Model
In case you need to boost your in-house team with niche-specific expertise (such as, for instance, fintech software developers or blockchain specialists), there’s no need to invest in the outsourcing solution. Instead, you can hire the right talent from a fintech software development company!
Below we’ve outlined the key points to consider before you hire software developers through the outstaffing solution.
IT Outstaffing Services vs Team Outsource: What to Choose for Your Project?
With years of experience providing team outstaff and outsourcing services, IdeaSoft considers these models being extremely effective and profitable for the software development niche. Software development outsourcing companies offer the ultimate solutions and technologies to address specific business objectives and their needs. At the same time, these solutions can help businesses to improve cost-efficiency, speed up the development time and maximize the output of their projects.
Based on our extensive experience, the outsourcing model will be the right option for enterprises, ventures, and startups which need the following:
- Expert assistance in a particular technology or niche-specific project. If you are considering launching a project in highly specific industries, such as blockchain, or fintech, hiring qualified experts is of the essence. Such professionals will provide you with the latest solutions and ultimate decisions that will make your product effective, valuable, and highly competitive within the target market segment;
- Launching the startup or business project from scratch. A professional outsourcing and outstaffing company, such as IdeaSoft, can offer a custom development solution based on the idea or concept provided. Additionally, such vendors offer full-cycle development services to handle every stage at the top level, which means access to all the specialists you need;
- Shifting the focus from technical aspects to marketing efforts and product release. With team outsourcing, businesses can invest major efforts into the promotion and marketing aspects, staying sure the product development will be handled at the top level;
- The turnkey development services for their custom solutions. Opting for high-end outsourcing services makes it possible to launch a powerful product with only a project idea or concept. At IdeaSoft, we provide first-class consulting and support across all the stages of software development to help you build a powerful product that is fully tailored to your business goals and needs;
- A cost-efficient alternative to local development services. There’s common evidence that the average hourly rates for software developers in the CEE region are lower compared to Western Europe and North America countries. In addition, according to the latest gathered data, this trend will continue in 2023 and the upcoming 2024.
On the contrary, a team outstaff solution will be a better fit for the businesses which:
- Have already set up their business within a particular niche and looking for scaleup opportunities for further development and growth;
- Need a temporary talent gap solution to perform particular expertise-specific processes in-house (for instance, fintech software development services or blockchain development solutions);
- Want to dive into the custom solution development fully and need on-demand assistance for their complex solution to maximize the final output. Based on our experience, this works exceptionally great for large and complex projects;
- Consider upgrading the existing product to enter the new markets, but experience a lack of tech expertise within that niche. This is a common practice among fintech projects that extensively embed blockchain solutions.
How to Find Developers for the Software Development Outsource or Outstaff?
As technologies move forward by leaps and bounds, every organization wants to involve the top talents in their development projects. No matter if you’re planning to hire blockchain developers or need an experienced smart contract developer for hire, here are some proven tips that can help you to find the best developers for your business:
- Define your requirements: Identify the skills, experience, and expertise you need for the custom development project.
- Research the potential outsourcing/outstaffing vendors: Explore reputable outstaffing companies to find a pool of skilled developers.
- Check companies’ portfolios and reviews: Review the portfolios and feedback of potential vendors to assess their previous experience and expertise within the niche-related projects.
- Request for a consultation on your idea: Before you start the cooperation, discuss the project specifications, business goals, and needs. Additionally, evaluate the developers’ technical abilities, cultural fit, and workflow nuances (location, time zone, communication approaches) to ensure effective collaboration and excellent output.
- Consider ongoing support and maintenance: Discuss and clarify the availability of post-development support and maintenance services.
- Review legal and contractual aspects: Ensure you have a clear and comprehensive contract that covers aspects like intellectual property rights, confidentiality, and project milestones.
Now that you’ve uncovered the basics of team outstaffing and outsourcing, and can finally make an informative decision on what services to choose for your business or project.
Summary
As the technologies are moving forward by leaps and bounds, every organization wants to involve the top talents in their development projects, and that’s where outsourcing and outstaffing services can become a great fit.
Already have a project to discuss? Contact us today to get an expert comment on your custom development solution and immediately enhance your business!
At IdeaSoft, we offer top-notch expertise across various niches, from the trendy like eCommerce and B2B solutions to, more specifically — fintech, blockchain, and crypto, the latest of which you can always find in our portfolio. So, whether you’re looking for a professional outstaffing company or want to entrust the full project delivery to the software developers for hire — we’ll get you covered!
Original source: IdeaSoft blog post https://ideasoft.io/blog/difference-between-outsourcing-vs-outstaffing-services-in-software-development/
