More and more businesses across various industries turn to international IT vendors for software development services as such approach is a proven way to cut costs while receiving high-quality results. However, the big question is: should you choose outsourcing or outstaffing? While seemingly similar, these two models differ significantly in certain aspects. It is therefore important to know the pros and cons of each when choosing between outsourcing vs outstaffing. In this article, we will walk you through both models and will recommend the most suitable use cases for each.
What is outsourcing?
First, let’s define both models and explain their principle of work and let’s start with outsourcing. Outsourcing means delegating the development of a software project to an external IT provider, from team assembly to project management and rollout. It is a common model for businesses that have a project idea but don’t have the necessary tech skills and expertise to properly deliver it. In this way, the external provider serves as both a consulting and tech partner and can provide valuable recommendations on product features.
This software development model has been gaining popularity in recent years due to its numerous benefits, with cost-efficiency and flexibility being the biggest ones. Note that when partnering with an external software provider, you can choose between outsourcing and outstaffing services as vendors usually provide both. Such flexibility is needed because in software development, you often need to scale the project and the team up and down. Hence, it is important that your IT provider offers both outsourcing and outstaffing. As an example, the IT outstaffing company SoftTeco offers not only outsourcing and outstaffing development to choose form but also several options for pricing and engagement models. In this way, the company suits the needs of every client in terms of project budget and scope.
Outsourcing pros and cons
Now let’s review the pros and cons of this model so you can better understand its specifics.
The pros of outsourcing:
- Management of the project by the vendor
- Flexibilty in defining the level of involvement in the project
- Access to vast talent pool and team assembly from scratch
- Compliance with required regulations
- High level of software security
The cons of outsourcing:
- Potential control issues since the project is managed by the vendor
- Potential communication issues due to different timezones
What is outstaffing?
Outstaffing is another popular engagement model where a company hires external professionals. The big difference, however, lies in the fact that in outstaffing, you augment the already existing in-house team with external specialists. This model is often selected to cover specific skill gaps or quickly add needed professionals to the team.
Another difference is that with outstaffing, you retain full control over the project and do not delegate the development to the vendor. This can become an additional advantage for businesses that need to strictly monitor the development process or have strict security policies in place.
Outstaffing pros and cons
After answering the “what is outstaffing?” question, let’s look at its strengths and weaknesses:
The pros of outstaffing:
- Quick and flexible hiring process
- More cost-efficient than outsourcing
- Highly effective and transparent communication
- Full control over the project
The cons of outstaffing:
- Limited talent pool
- Need to manage the whole development process
- Potential security and compliance issues
Main differences between outsourcing and outstaffing
We’ve defined both models and briefly discussed their pros and cons. Now let’s look at the biggest differences:
Project management
The first and most distinct difference is project management and the level of involvement for the client. In outsourcing, you can fully delegate the whole process to an external vendor so they oversee the delivery of milestones, manage the team, and resolve issues. In this way, you will be able to focus on other critical tasks while staying updated on the project status via regular reports.
Outstaffing, on the other hand, implies that you manage the development process and your in-house team with your own efforts. You can obviously hire a project manager from an external provider but you will still have to perform a plethora of tasks related to project management.
Team assembly
With outsourcing, you approach an IT company and it suggests a team of specialists based on your project requirements. The hiring process might take a while though as you will have to interview all team members, communicate a lot with business analysts and project managers, and prepare all documentation needed to start the project.
With outstaffing, the hiring process is much quicker since you need only several specific specialists and don’t have to assemble the whole team. And since external specialists are often available immediately, you can onboard them within several business days.
Cost
Finally, it is important to discuss the cost of outsourcing and outstaffing. Outsourcing is usually more expensive since it is used for lengthy projects and requires to hire a whole team of specialists. Outstaffing, on the other hand, is much more affordable since you hire just a few professionals and pay for their services only.
Outsourcing vs outstaffing: what to choose?
After explaining both software development models and understanding the specifics of each, it’s finally time to decide which one will fit your project the best.
Choose outsourcing if:
- You have a lengthy and complex project in mind
- You need various technical skills for the project
- You want to delegate project management
Choose outstaffing if:
- You need to scale the team up and down
- You need to close specific talent gap in your in-house team
- You need full control over the project
As we already mentioned, most external IT vendors provide both outsourcing and outstaffing services. We recommend investing some time in selecting a reliable and trustworthy software provider as their services directly impact the quality of delivered results. To make the right choice between outstaffing vs outsourcing, study available listings of IT companies (can be found on services like Clutch) and reach out to your network to ask for referrals and recommendations. Also don’t forget to check if the company has relevant experience in your field of operation and whether it has done similar projects in the past. Such experience will significantly speed up the development process and will enable the company to provide valuable recommendations.