Outsourcing vs Outstaffing

Outsourcing vs Outstaffing
18 Dec 2019

If up until now, outsourcing has proved its efficiency and benefits for companies that choose to have their projects developed by remote teams, outstaffing comes as an excellent alternative for those that require a more targeted use and control of this practice. Although not such a popular term, outstaffing is gaining more and more traction in the IT services sector.

So how is outstaffing different from outsourcing and what are its benefits?

Outsourcing vs Outstaffing

If software development outsourcing takes place when a company hires another one to do one part of the job, outstaffing occurs when a company chooses to have an extended team of their own. If in the case of outsourcing, the team working on their project belongs to the vendor and can work on different projects of the vendor simultaneously, in the case of outstaffing the development team will work exclusively on the company’s project. When we talk about outstaffing, we also deal with a vendor, but this vendor has mainly administrative tasks: they do the recruitment, they take care of employment procedures, taxes and so on, while you take control of the IT professionals that will work exclusively for you. Put simply, with outstaffing 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 choose to hire a remote manager as well. Both approaches are so similar that most people can’t differentiate them, especially when the same vendor offers both approaches.

Although similar, they both present different characteristics that may come under the form of pros and cons, depending on the case. Let’s better understand when we use which approach.

With outsourcing, companies require a team of developers to work on big tasks or on the entire project. In this case, the vendor provides support and manages the whole project and you rarely have access to the team as you usually work with a project manager.

Outsourcing Pros

  • Increases business profitability
  • Responsibility on vendor side
  • Focus on core business
  • No need to employ people
  • Fast development

Outsourcing Cons

  • Little control over the development process
  • Constant quality assurance and tracking
  • Higher costs than with outstaffing
  • Possible communication barriers: time zone, language, cultural differences

When should you use the Outsourcing approach?

If you don’t have in-house software developers and you need to develop the whole project from zero or if yo’re looking for short-term projects and cheaper rates, you should consider outsourcing as an option for you.

With outstaffing you get better control over your team and project and miscommunication and delays are prevented as it might happen when third parties are involved.

Outstaffing Pros

  • Full control and access to all your team members
  • Lower costs than with Outsourcing
  • Full control of the development process
  • Team size flexibility and scalability

Outstaffing Cons

  • Additional management efforts
  • More responsibility
  • Possible communication issues related to time zone, language, cultural differences

When to use Outstaffing?

Oustaffing is for you if you want to handle the development process and management by yourself.

Conclusion

Both outsourcing and outstaffing are great approaches when it comes to software development. They not only help you develop the best possible software solutions, but they also represent great ways to cut costs and make your business more efficient. When it comes to deciding on the suitable approach, you should consider the budget, human resources, scope and nature of your software project.

Outsourcing and Outstaffing with Arnia

With hundreds of successfully completed projects for clients ranging from Fortune 500 to Forbes 50, spanning on 3 continents and more than 10 countries we can offer excellent software development opportunities for your business. Our services cover web and mobile applications, web design, big data solutions, database management systems, e-commerce solutions, cloud-enabled solutions, content management solutions, business intelligence and R&D.