Outsourcing vs. Outstaffing

At times, every business needs resources that aren’t always available internally, this could include: technology, expertise, and manpower. When managing a business it is important to focus on its core strengths, where efforts are most profitably spent and know when to outsource or outstaff to obtain the resources or expertise you need. Using an IT outstaffing company or outsourcing company is a great solution to get the expertise your company needs either cost-effectively, temporarily or both. Even though outsourcing and outstaffing sound similar, they are different models and you should learn about which is most appropriate for your business or project. Whichever you choose, both can help your business operate more efficiently by offloading non-core functions.

An example of outstaffing that you might be familiar with is using staffing agencies to bring in temporary workers through and an example of outsourcing hiring a third party call center to handle your customer service. Specifically, when it comes to software development, outsourcing and outstaffing has become commonplace in the industry and is often preferred by companies over hiring IT professionals directly.

IT outsourcing involves hiring a third-party company to take on a project and handle a majority of the heavy lifting. Once you provide your specifications to the project manager, they will take on the rest of the tasks, allocating their developers as they see fit and ensuring the project progresses and meets deadlines; you don’t interact with any of the developers directly. With outsourcing the third-party company you have less control; the third party is responsible for developing the project to the specifications outlined in the original engagement, including planning, management, and maintenance, as well as keeping you informed of progress. IT outstaffing, on the other hand, you engage an outstaffing company to find the best developers to build a team that you will manage directly. With outstaffing, you maintain management control of the project and the team; you decide where your team should apply their time and skills to create your software. Outstaffing can be used to build a team from scratch or augment an existing in-house team.

Outstaffing and outsourcing are both effective and cost-efficient ways to develop IT projects. There are several you should consider when choosing whether outstaffing or outsourcing fits your particular project, including project scope, budget, management style, and existing expertise.

When to Use Outsourcing:

Outsourcing is a hands-off method to develop software. Outsourcing is the model most often chosen when a company’s primary focus is not on software development and has no in-house developers. After you choose a third-party developer, a project manager will take on the project and ensure that the software is created to your specifications with little input from you following the initial phase. The project manager will allocate internal resources and decide how best to meet the project’s deadlines. Outsourcing typically works best when the project’s scope and technical specifications are already well-defined, allowing the developer to have a firm understanding of its requirements and ensure that you are satisfied with the results. Because the scope and requirements are well-defined, the developer can estimate its costs reliably and work to a fixed budget agreed to by both parties, with the developer responsible for project and personnel management.

When to Use Outstaffing:

Outstaffing is most useful when you want to take a hands-on approach to software development, when you have multiple projects to develop, when the scope or technical requirements of the project are not clearly defined, or when you have an existing team that needs to be augmented either permanently or temporarily. Outstaffing companies often maintain a pool of developers ready to take on projects, meaning that hiring a developer or team of developers can be done quickly. By accessing this ready pool of developers you are able to ramp up your team quickly to start new projects, grow your team for particularly active phases, or bring on specialist engineers only for the phase of the project that requires them. Outstaffing also saves on costs over hiring in-house developers; the monthly wage for an outstaffed developer in Ukraine is often a fraction of the cost of a developer’s salary in the United States or other western countries and you also save the time and costs required to interview and hire locally. Outstaffing allows you to build the team you need while creating considerable cost savings from lower salaries, reduced hiring costs, and potentially even reduced rent due to your company requiring less office space. Cost-saving from outstaffing allows you to re-invest in your business, focus on your products, or spend more on marketing and sales.

When you choose to outstaff it is like you are hiring remote employees, though all direct employment costs remain the obligation of the outstaffing company. The outstaffing company will do its best to provide you with great developers that suit your needs, and you will have the opportunity to interview and vet them and ultimately decide which of them to bring on your team. With outstaffing you are in control, you manage and monitor your remote staff and direct how they apply their time and skills. With outstaffing, the application of your developers, and the outcome of your project is up to you.

Conclusion

As you can see, both outstaffing and outsourcing provide excellent solutions for developing your project, so the choice will come down to what best suits your business’ and project’s needs. The most important thing when outstaffing or outsourcing is to find a trusted and qualified partner that can quickly provide the solution you need.

Whether you decide to use outstaffing or outsourcing to develop your project, you need a strong development partner with the right talent. We are a development firm with over 10 years of experience and we are focused on hiring the best development talent in Ukraine and creating great software products for clients. We have a pool of the best developers in Ukraine, so you can quickly and easily build a talented outstaffed team or start your outsourced project. We are client-focused and our management team is responsive, flexible, and ready to help you build your project. Our passion is building great software for our clients, reach out today to learn how we can help you bring your software vision to life.