Outsourcing vs Outstaffing: Which is the best choice?


To meet the needs of the clients, Inoxoft provides both outstaffing vs outsourcing model services to international partners. You can choose an engagement model for software development that works best for you. Our reputation is built on the trust and positive feedback of our clients and we are more than ready to provide high-quality IT outsourcing services. More control on your end means less responsibility on theirs and vice-versa.

outsourcing vs outstaffing

We have the experience, drive, and know-how to create a tailored solution for your project. Project management part is the client’s responsibility, and therefore requires a tech representative tasked with managing the remote developers. If this rep is not there, outstaffing will likely not work. The service provider assumes responsibility for the product’s quality. In helpdesk example, this would be the quality of the customer service. In a software development scenario, the quality of the code.

Pros and Cons of Outstaffing

We’re back to where we started, and things are getting a little crazy. Other times, communication channels between the vendor, client, and the remote software development team can simply get too muddled. Either way, it’s important to realize that this is a big job. These can be remote employees, remote vendors, or even entire companies or boutique firms. Regardless of location, what matters is that the outsourced team provides high-quality services with good communication for less than a company could find locally. The task scope highly correlates with the type of problem you want to solve.

outsourcing vs outstaffing

This can’t always be determined from a resume alone — you have to get them in front of people and see how they interact with one another before making any final decisions. Not only do you want to make sure that the person or team you bring on board is invested in your company, but they should also be able to work well with other members of your team. Outsourcing, on the other hand, is when a company uses another company or individual to handle all or part of its business operations. This can be useful when a company is short-staffed or has a high turnover rate.

Software R&D Center as an Alternative Option to Outstaffing

However, the chosen model may significantly impact your project. Our company is among the businesses with expertise in outsourcing and outstaffing tasks. We have a big team of specialists with a high level of expertise who are ready to assist with all of those relevant aims. More importantly, our contacts in the Ukrainian IT market are advanced and we can act as guides in hiring individuals within the country.

  • You may not get quick access to the required experts from your region.
  • When you want to focus on your core business functions, it’s better to outsource projects to prevent the diversion of attention of your internal staff.
  • Profile Expert in offshore development strategies for technology companies and startups.
  • When you outsource your job, it’s easier for your vendor to send in a variety of professionals for just an hour or two.
  • Owners with a non-technical background who don’t have experience managing IT projects.

Now let’s summarize the battle of outstaffing development versus outsourcing one. You have full responsibility over the extended team, project decisions, and code. So, it is best to have a tech-savvy expert or even several in your company. Let’s look at the benefits of outstaffing development as well as its drawbacks. Your contractor manages and completes all project data. You receive documentation upon completion of work, along with the source code and the deployed product.

What to choose outsourcing or outstaffing?

For example, the hired company might have deeper expertise in a certain area — this often happens in IT. The contractor might also be able to get to work faster, as they already have the necessary people on hand. In addition, the company that outsources the work doesn’t have to cover overhead and expenses like equipment, as they are provided by the contractor. You need to hand over the project management tasks to a tech partner. If the project requirements are vague the expenses may end up being higher than with an outstaffing company.

outsourcing vs outstaffing

As a result, you have the right performer or team for your project. In Cost Model – The business pays one flat fee to the IT Outstaffing Service Provider to get the development team for part-time, or full-time. The IT Services Company pays the team member’s salary, perks, tool expenses, etc. The salary that an employee receives is not disclosed to the clients, as the IT Service Provider can leash that money based on their liking/management decisions. According to Clutch, companies with up to 50 employees (29%) are less likely to outsource than those with over 50 employees (66%). Smaller companies prefer more cost-effective options like hiring freelancers or outstaffing.

Constant and close communication with the team members helps to establish rapport and to ensure they are motivated, involved, effective and keen to align with the client’s business. Waverley also provides training and mentorship programs, and creates professional development plans for every employee. Share with the vendor everything there is to know about the project budget, scope, schedule, quality requirements and have the ability to pay for the vendor’s services.

Outsourcing vs. outstaffing: what should you choose?

Therefore, the whole development process is in the hands of an outsourcing vendor, while a client focuses on other business activities. Since an employee concludes an employment contract with an outstaffing company but not with a customer, the latter does not deal with these matters. This approach reduces the load on the customer company’s administrative and accounting departments. software outsourcing and outstaffing How oustaffing model worksFrom a legal perspective, a specialist has labor relations with an outstaffing company but not with a customer company. While the outstaffing company provides services to a customer according to the contract, a customer company pays for them. Many people mistakenly believe that outsourcing and outstaffing are substitutable concepts.

You are a startup with a great digital idea but with no in-house team to build it. It could be a mobile app, web app, or any other software project making use of emerging technologies. They might be in a different place and from a different company, but they will work as your own employees. You will communicate with your auxiliary team directly, distributing tasks and managing them day-to-day. You only pay for completed work, contracting a company when you need to handle a certain business process.

Nevertheless, entrepreneurs underestimate the complexity of outstaffing. They believe that they’ll be able to communicate, manage and assign tasks to remote employees, and manage their business at the same time. With the outstaffing model, you are in charge of managing the development process.

outsourcing vs outstaffing

This is because the software outsourcing company needs to secure it against possible data theft. Normally you will be presented with demos of what has been done during a certain timeframe. A software outsourcing company will fully evaluate your demands, wishes, and budget and will make your project idea a reality.

When To Opt for Software Development Outsourcing (Cases, Types of Projects)

With outsourcing, a client company hires a whole development team and a manager who is responsible for running the project. Of course, the customer is still in charge, meaning they are giving all the guidelines and goals in advance. You can see that the pros outweigh the cons and it is hugely beneficial if you are ready to drop the inhibitions of giving your project to overseas implementation. Getting a high-quality outsourcing provider is an underlying factor for success. This is the simplest explanation for these two terms in the software development context.

There is a project, by the end of which the services of the employee will no longer be required. If it is necessary to reduce the number of the company’s staff, while not losing the number of employees working in it. This can be a barrier to coordination with the hiring company. Which combines the benefits of offshoring with the advantage of having your own team.

Outstaffing: what is this service and how is it different from outsourcing – jim o brien

Outstaffing: what is this service and how is it different from outsourcing.

Posted: Wed, 09 Feb 2022 08:00:00 GMT [source]

As you’re hiring a team, not just a single specialist, you have access to the experience and expertise of the company’s professionals. This will allow you to seek one-time, expert opinions from the company without spending money and effort on finding advice elsewhere. The time and material approach can also be called a flexible one.

In the era of the internet, people have finally realized they can literally lease whatever they need for whatever amount of time and end up paying up to 90% less. In today’s IT world, new companies are born https://globalcloudteam.com/ as frequently as rabbits in the wild, and die as quickly as rats in the plague. The competitiveness, an intense development pace — how are companies supposed to develop with so many factors to control?!

Providing additional services like personal testing or project manager

Outsourcing and outstaffing do crossover, but each practice has important differences that need to be taken into account. We’re just paraphrasing Shakespeare here, but the dilemma for many company execs is no less real. The contracting authority wants to reduce the administrative costs of personnel office work, as well as costs related to the calculations and payments of salaries.

If you want to hire personnel on a project-by-project basis, an outstaffing provider will be the ideal fit for your needs. This approach is best suited to businesses with strong management and/or directing partners who can oversee projects. If you or your employees are capable of guiding a foreign specialist, outstaffing makes sense. This method will also come in handy if you find yourself in need of a specific workforce that you don’t have. Failure to establish effective communication channels.

How they are similar, and how to distinguish outsourcing from outstaffing. Both concepts denote a special relationship between the company and employees outside the central workforce. Since we have years of outsourcing experience, we know how to remotely organize a smooth working process.


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