Outsourcing VS Outstaffing: How to Make the Right Decision

by prostir
15 November 2017
Outsourcing VS Outstaffing: How to Make the Right Decision

Although both outsourcing and outstaffing are not new concepts in IT, they already exist for far more than a decade and have become very popular, especially amidst companies that either are not IT-oriented, or need a project out of their usual zone of competence, or just require a bigger team.

What’s The Difference?

Outsourcing is the process of hiring and working with a full dedicated team located at the provider’s office. You start your work with an outsourcing company by sharing the requirements, and in return, you receive delivery of the end product. Not only you get away from searching, hiring and managing specialists, their salaries, workplaces and taxes, but you also get the project, team and delivery management processes covered by the outsourcing company. Even if you work with an outsourced team and cover lots of additional things except salary, it will still be cheaper than having everything in-house, as you share lots of management activities like accounting, office management, and HR with other clients.

On the other hand, outstaffing is the process of hiring of selected specialists, to be located in yours or provider’s office, to form or augment your own team. Outstaffing costs less than outsourcing but will require from you all the attention and control usually covered with outsourcing. Team and delivery management are to be provided by yourself, along with accounting, office management and so on.

Software Development Outsourcing

Outsourcing is a great option for long cooperation between you and your providing company. Once you start your work, the provider can have a suitable team on the bench or hire a new one for your project. Outsourcing is an all-inclusive process and such teams are usually self-managed to some extent by their project managers. The most usual setback that causes major cost and time increases is lack of detailed requirements. Outsourcing teams can make false assumptions about scarce requirements and work in a wrong direction until you notice it. That definitely can cause you some losses.

Hire a Dedicated Software Development Team: Outstaffing

Another great and comparably new option is outstaffing or IT staffing. With this process, you receive a specialist in your possession without actually hiring them. An engineer is hired by the outstaffing provider which also covers all HR, taxation, and office management expenses. In your turn, you receive an augmented team, where the new specialist is fully managed by your own team manager and constantly receives all the updates and information regarding the project. You will need to cover lots of things, still, but the flexibility of such engineer is equal to having your own in-house one.

Both ways, you should dedicate your time to communicate with your specialists to avoid going off the tracks with the project and having open questions from both sides. This catch multiplies if your engineers are overseas and your timezones have a big difference. However, if your company needs a high-quality software, and you do not have respective specialists to create it, then outsourcing and outstaffing are both great solutions that should be chosen depending on your needs, budget, and perception of the development process.


Ready to hire a dedicated development team or outsource your project? Contact us and we will match you with the best software development team!

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