A global tech economy forces businesses to equip themselves with the latest tech innovations in business apps and websites. We live in times when AI can become a true companion, and smart-house technologies can handle a variety of household chores on our behalf. Businesses strive for access to a skilled IT talent pool that will build cutting-edge solutions.
In this article, we compare IT outsourcing vs IT outstaffing. Go ahead and read it to find out what the pros and cons of each model are. It will help you choose the option that fits your business best.
Core Differences Between the Outsourcing Models
IT outsourcing is based on entrusting the whole process of software development to an external company. A vendor typically takes full responsibility for the client project. They provide a dedicated team to create a roadmap, build a prototype, advance it to the state of a ready product, ensure quality control, maintenance, and updating.
The control over the working process is taken by a Project Manager or a Tech Lead. They manage a team of engineers and report to stakeholders on periodic result demos. You get the development job done for you while concentrating on the current business goals.
Companies that go for an IT outstaffing model usually have their own IT departments working on the business applications. When they need to extend the internal team with extra hands or specific expertise for some time, they search for a trusted outstaffing company to provide them with the required workforce.
Outstaffing allows scaling your software team up and down while maintaining complete control over the working process. The outstaffed engineers stay employed at the vendor’s side. The vendor takes care of all the administrative tasks like payroll, taxes, and staff training.
Outstaffing VS Outsourcing: Pros and Cons of the Approaches
No one-size-fits-all solutions exist. For the business owners who are going to outpace the competitors, it is extremely important to find the best-suited approach.
To achieve this, they analyse software development trends and different methods of software building, in comparison to the business needs. Let’s start with comparing the pros and cons of outsourcing vs outstaffing.
IT outsourcing benefits:
- Complete ownership over the project while delegating full responsibility to a professional service provider.
- Access to specialised expertise in specific technologies like AI, data analytics, protection from cyber attacks, or blockchain projects.
- Reduced management burden as the vendor takes care of team management, project realisation, delivery, and maintenance.
- Cost optimisation by outsourcing projects to countries with lower labour rates.
IT outsourcing downsides:
- Limited control over the project realisation, as all the work on the project runs inside the vendor’s team.
- Communication barriers are caused by the need for communication with people from different time zones and cultures.
- Complete dependence on the vendor, as their team owns all the knowledge regarding your project.
- Potential added cost due to poor planning and changing the project scope.
IT outstaffing benefits:
- Full control over the project flow and flexibility in team adjustment.
- A possibility to scale the team up and down at any time, accommodating it to changing needs.
- Saving costs on workforce benefits, office space, and long-term contracts.
- Outstaffing provides you with employees who work closely enough with your in-house crew to share their culture and working standards.
IT outstaffing downsides:
- You handle the management, guidance, and control of extra engineers by yourself.
- The success of the cooperation highly depends on the quality and reliability of your internal processes.
- You will have to pay extra time for the onboarding of the new specialists into your infrastructure.
- Contractors from different countries should work in compliance with cross-border employment regulations.
How to Choose Between Software Outsourcing and Outstaffing for Your Business
The main difference between these two approaches lies in the field of work management and taking responsibility for the whole project. In outsourcing, the whole responsibility is on the vendor’s side. They lead the project to the release and are accountable for the final result. Outstaffing is a type of cooperation where you manage the external specialists provided by your vendor.
Comparing outsourcing vs outstaffing, prioritise your business goals and possibilities. Analyse what you have and what your goal is, to see whether you need to search for an outsourcing or outstaffing services provider.
Choose outsourcing if you want to build a piece of software from scratch with minimal effort on your side. It is a helpful approach for businesses that don’t have internal IT expertise.
Opt for outstaffing in case you already have a well-developed internal IT department. Whenever your employees need extra hands, you can hire additional workforce and retain control over the development process.
