Outsourcing or Outstaffing

Ever considered outsourcing and outstaffing? We will help you answer the question of which collaboration model is better for your upcoming project. 

When it comes to developing a mobile or web application, the question is what to choose between these two? 

So we will study what is good and what is bad about software outsourcing and outstaffing in this post. 

Mind that there are many names for these choices like talent outsourcing in Australia, a contractor in the USA, or subcontracting or offshoring in Europe. Talking about Ukraine, it has been around 10 or 15 years, when IT services got widely known. 

As more and more software companies and the businesses a way far from IT like to hire remote workers from foreign countries, it is necessary to have a clear understanding of when to go for one and when for another. 

What Is Outsourcing    

Outsourcing is when a client gives total authority and responsibility for the whole project development process to his/her outsourcing partner. It is very unlikely that the client can control the team itself as well as the steps of work. Here is the image for those who are more into visual examples.

A software outsourcing company is a team that works on one or several projects at the same time. Actually it is really useful to take advantage of such a collaboration model for those companies who are, for example, not much into IT or technology themselves, but they do need some mobile applications or websites etc. 

And What About Outstaffing? 

It is a way of distant partnership when the worker whom you hired fulfills the project task as a part of your team. It is like you have enlarged your staff with no fuss of taking the responsibility of in-house employees. Basically, the outstaffing supplier gives you some professionals who carry out the duties of your company and of your team. The staff offered by the supplier of outstaffing is not responsible for the ultimate outcome of the project. And so such staff members should be treated as remote employees. 

The model is demonstrated in the following scheme.

By the way, it breaks down into the two models – Cost model and Cost Plus. 

The first one implies that the client pays a definite amount of money to a provider and gets an extra team member for a fixed period of time. With that payment, that employee gets his salary, bonuses, all the necessary expenses, etc. It’s all wrapped up in one. This way you are relaxed because every month comes with the exact agreed sum of money, it is indeed very convenient. 

If you are daring enough to try the Cost Plus scheme, be ready to do more administrative jobs like managing the expenses compared to the amount of tasks done, etc. Salary is fixed but overtime and bonuses are to be paid on top. 

Pluses And Minuses

As for the main distinctive features, outsourcing is about the project as a WHOLE and outstaffing is basically hiring individuals for SEPARATE tasks. Shall we look at the advantages and disadvantages of outsource vs outstaff now?

The first choice is precious for the following reasons:

• You appreciate this way of partnership for the absence of hiring problems.
• You can also breathe freely without any project management issues.
• The quality of the code is not your preoccupation but the one of your outsourcing team.
• You can feel more relaxed about meeting deadlines and time efficiency. 
• Wide choice of professionals. 
• Some other choices are up to you. 

By the way, recently we talked about outsourcing and why it is such a cool startup tool. You may find it interesting so here is the link.  

As to the disadvantages, we can name the absence of direct control of the development process. The client does not communicate with the developers, he just waits for the final result. 

Besides, this model is more expensive due to all that administration and micro management services. Moreover, vendors usually charge a higher rate per hour for a one-time project unless you assure them that you are also partners in future.

There are also valuable advantages of outstaffing.

• You can contact any team member whenever you need.
• The hiring model in this case is pleasantly flexible. 
• You enjoy full control over the project workflow.
• It is usually less expensive. 

The main harm of this option, if it can be called harm at all, is that the client himself is fully responsible for the product management and the whole development  process. He/she has to control what the developers are doing, what are their purposes, etc. 

So, What to Choose?

Outsourcing vs. outstaffing – which one would you use exactly? At ZenBit Tech we advise our clients to consider the following questions. Are you really able to give enough full-time jobs for your developers throughout the whole year at least?

Do you think you will manage to introduce that expert as a “remote temporary worker” within your company and reach natural synergy for effective workflow? 

Is it necessary for you to supervise these employees, working together and having access to their processes anytime, as if they were a member of your in-house team? “Yes” answers clearly point to the outstaffing. 

And when you begin to think about whether you have the necessary resources for daily routine development team administration, the choice may go into another direction – towards outsourcing.

All in all, the decision fully depends on your needs and the speciality of your company. For example, if you are not exactly IT based, probably the best option right for you is outsourcing. This way you will not have to manage some minor development process routines. But if you have some in-house developers, or IT departments, maybe the best option right for you is outstaffing. 

Anyways, when you are choosing between these two, you are already part of an IT industry trend at the moment. 

Each case is unique, nevertheless, consider all variants, and by the way, it is better to consult professionals about which side you should choose.