Outsourcing vs Outstaffing: Whats the Difference and Which Should You Choose?

If you need to hire just a couple of developers for the duration of a project, you pay for a couple of developers only. You will also have to evaluate both options before you make that decision, so let’s take a look at the opposite side of the outsourcing vs outstaffing dilemma. There are several ways to extend the capabilities of your IT staff. In most cases, you would hear a discussion around outsourcing vs outstaffing and why one is better than the other. But what are these circumstances and what is the difference between these modes of cooperation with software development vendors? This is especially true for custom software development where companies use vendors’ help to improve their projects’ technical capacity and boost the efficiency of their i…

Reducing the burden of managing employees by delegating responsibilities. When outsourcing, the contractor forms a team for the project, distributes duties, and controls and pays for the work of their specialists on their own. For example, P&G used platforms such as UpWork for new product development of R&D needs. While I did not find the word outstaff in any dictionaries, a web search does turn up several companies named Outstaff or OutStaff, perhaps created as a portmanteau of outsource and staff. Your partner will set up a sitting space, development environments, provide all the tools needed for communication and tracking.

  • With such clarity comes confidence in the budgeting needs and the timeline for the project.
  • To avoid such a situation, you must document tasks and internal processes, provide all team members with access to this information, and ensure smooth onboarding.
  • Thus, your total costs for an outstaffed team are much less than if you tried to hire additional engineering resources closer to home.
  • The type of offshore development highly depends on your project needs.

In the area of information technology, such work may include the creation of a mobile or web application, product design, software development, business analytics, etc. Outsourcing is considered to be focused on business decisions. The global market size of outsourcing services including the outstaffing hiring model stands at about $88.9 billion in 2017. Outstaffing is one of the popular remote resource hiring models commonly adopted in the domain of information technology, especially in the software development, in the present day marketplace. It offers numerous great benefits to the enterprises located across the globe. IT outsourcing is a model which allows you to hire a complete dedicated team of programmers, designers, QA engineers, and project managers.

Cons of Outstaffing Software Development

It all comes down to your key needs and which model is best for you at that given time. The outsourcing approach lacks transparency because the client provides the outsourced service provider with their specifications and receives the results at the end of the task period. The client usually only has limited knowledge of daily operations and how each individual developer on the team performs. Second, outstaffed developers typically have lower salaries than developers based in America or Western Europe. Thus, your total costs for an outstaffed team are much less than if you tried to hire additional engineering resources closer to home. Still, you don’t have to worry about the administrative hassle of employing them directly.

what is outstaffing

Like in the case of outsourcing, you might start faster if you turn to outstaffers, as software companies often have engineers available right away. Your vendor does it, along with hiring and maintaining the activities of your IT experts. Assessing consistency, quality, and pace of your development project might not be easy, as you don’t have direct access to your team. Riseapps, you’ll save money, yet getting high-quality development services.

Our People

The primary benefit of the model is that you get full control over your resources and pay not for features or hours, but for a team member who is working on your project full time. The outstaffing model is very well-known, useful, and effective for companies that want to put IT projects into action. IT outsourcing is the best choice if you want to make complex or high-quality IT products without adding to your budget for employees. Outstaffing can help businesses run faster and provide better services while freeing internal resources to focus on other important tasks. It can help a company save on labour costs since the outstaffing company will provide the employees.

It is followed by communicating with the outstaffing company and carrying out technical interviews. However, this outsourcing model also has its disadvantages, which also should be mentioned. The customer has no direct influence on the progress of the work, as he has no direct access to the development team.

what is outstaffing

We build mobile and web apps for companies and enterprises from Western Europe and the USA, designing, developing and testing our products internally. Currently, we are focusing on healthcare, wellness, tourism, and entertainment industries, where we have a lot of successful cases. The rates might fluctuate depending on the tech stack an individual developer works with, their seniority level, and the unique skills they bring to the table. However, it is generally more cost-efficient to hire people from growing economies as it can give you a good cut on the overall project budget.

Task Scope

You need to quickly boost development velocity based on competitive pressures. Your organization only pays the hourly/monthly rate of our top talents. These meetings let team members feel involved and discuss various project-related issues and challenges.

what is outstaffing

Your choice of pricing model will depend on the specifics of your project, and there is no right or wrong answer. You need to negotiate the pricing with the vendor and select a model that suits your particular project. Consider these recent statistics from Grand View Research, Inc. Now let’s see how these compare to outstaffing to see the difference. A universal algorithm is used when you need to establish cooperation with youroutsourcing company. Your in-house team cannot meet all the project deadlines assigned to the existing development team.

Outsourcing and Outstaffing: What is the Difference and What to Choose in Your Case?

Once an outstaffed team member arrives at the team, the client decides the scope of work to be done, assigning and following up on tasks. The critical difference with Outstaffing is that typically the contracting company hires nearly 100% of the remote employee’s time. It’s like renting – you team up with a developer from an outsourcing company without employing him directly.

When you outsource software development, you can be sure that only professionals work on your project. This ensures that they are experienced in what they do and they have all the necessary skills to complete any task accurately and timely. One reason why businesses prefer outsourcing and outstaffing is that they need someone who can meet deadlines https://globalcloudteam.com/ and deliver on time. If there is a project that needs to be done by tomorrow morning, then it would be better to hire someone else who can get it done overnight than waste time trying to do it yourself. This way, your company will not lose money due to missed deadlines. This allows a client to “employ” a dedicated IT outstaff team member.

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]

Whether you need an IT outsourcing agency or it’s better to go with an outstaffing company fully depends on your needs. Outstaffing services relate to a vendor who provides software developers to a client on a long term basis and handles all the legal and administrative aspects of the developer’s employment. These developers are then fully dedicated to the client, who determines what the developers work on and when. Another advantage of outsourcing is that the vendor usually has a bench of specialists that can float in and out of the project on an as-needed basis.

In this case, the outsourcing development model may be a better choice. With the outstaffing model, you are in charge of managing the development process. You decide on the tasks your team is working on, schedule those tasks, and manage all the development activities. If you’re on the fence about your ability to outsource vs outstaff, ProCoders can help you choose the information technology outsourcing services. We can work with your team as an outsourced or outstaffed resource.

When and Which Model of Offshore Development to Choose

All business owners had to review the way they manage their projects or employees and faced both financial and organizational challenges. Some companies have already adjusted their workflow to match the new reality, but others still struggle to restructure their processes and meet the new needs of their customers. Outsourcing and outstaffing practices have gained their popularity even before the Covid-19, but afterward, they became software outsourcing and outstaffing a huge trend. For example, if a bakery wants to make a website, its owners definitely won’t hire an in-house team of developers to do that. The best option for them is to hire an outsourcing development agency to conduct the complete development cycle and provide the finished product. These models of hiring don’t work dedicatedly on a specific project, but their tasks may depend on the outcome of the other developers in the team.

The customer has the opportunity to recruit a team of outstaffed experts based on their reputation, experience, and professional skills. Communication in outstaff with a hired team takes place on a par with the full-time teams on the principle of a client–hired team. This option contributes to the uniform distribution of the scope of work and their high-quality performance due to the control by the client.

what is outstaffing

With vendor staff often working remotely, or at least separately from the rest of your team, communication channels are important. Also, they offer development services from the Philippines due to affordable rates of software developers and boosting the industry. It begins with figuring out the number of employees required for a project.

Team Extension

Other than that, you’re more than welcome to check all the outsourcing software development pros and cons. The main difference between these two models comes down to who is in control. With Outstaffing, the client manages the outstaffed development team directly and has responsibility for hitting all key development milestones and timelines. The good news for businesses considering IT outstaffing services is that they get complete control over the hired specialists, the development process, and its outcomes. This allows them to manage the hired staff directly and much more effectively.

This means that you pay money to the vendor and the vendor handles everything starting with payrolls and ending with sick leaves and days off. You bear no responsibility for these employees, all you have to think about is their input in your project. You can expand your team without having to deal with all the operational headaches. Hopefully this article has shown that Outstaffing is the bomb-dot-com when it comes to the ease of extending your development team. Moreover, in most cases it proves much more cost efficient and productive than outsourcing.

Let’s say you already have a team of developers in-house but it is not enough to reach all the goals of your project. You need some extra talent to get the project where you need it, and that is where you make the choice between software outsourcing vs outstaffing. IT outsourcing means delegating business tasks or processes to external software agencies. In this case, communication is limited, you get weekly/monthly reports and project demos from a project manager. Meanwhile, IT outstaffing services provide clients with complete control over the team, although it is officially registered as a vendor’s staff.

At Dinarys, we are ready to help in these challenging ventures and provide our qualified developers through IT outstaffing. IT outstaffing services refer to a remote hiring model where an outstaffing company provides a dedicated team or individuals to the customer for its software development project. These specialists work only on the client’s project for the period defined by the contract. Although the customer has complete control over the outstaff team, it doesn’t have to deal with any operational issues. A dedicated offshore team consists of two or more high-quality developers involved in the development of a particular part of the project.