Outsourcing vs Outstaffing: Whats the Difference?

Outsourcing vs  Outstaffing: Whats the Difference?
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  • 18 Mart 2022
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If you require a one-off app development, you pay less for outsourcing. Meanwhile, outstaffing is more budget-friendly when you want to scale your team long-term without tedious hiring and training. Businesses outsourcing outstaffing might get sidetracked when they dabble in areas beyond their expertise. With outstaffing and outsourcing, companies can focus on their core capabilities instead of micromanaging developers.

The unique characteristic of an outsourcing IT model is that the development team members you choose will deal with every aspect of your project from design to testing. IT outsourcing is a model which allows you to hire a complete dedicated team of programmers, designers, QA engineers, and project managers. That being said, outsourcing is a comprehensive model where a development team is hired to remotely deal with one (or more) of your development projects. For this reason, we have created an analytical guide that explains what outsourcing and outstaffing is and what the main differences are between them. This article will also help you figure out which model best fits your business needs and how to find high-quality collaboration partners to outsource your IT projects. The main differences between software outsourcing and outstaffing are the scope of the project and the side responsible for the management of development activities.

What Is Outsourcing?

You ordinarily wouldn’t have an IT department since your primary business is to make food for people. Your wisest choice would be to outsource your software development, and not outstaff because you don’t have an already-existing IT department. Thus, there is no need to look for performers for your lice company.

When you outsource your software development needs, you free up your in-house team to focus on other core aspects of your business. This can lead to increased productivity and an overall better bottom line for your company. When it comes to software projects, you may find that outstaffing gives you more responsibility than outsourcing. With outstaffing, you’re managing the project, so you’re accountable for its success or failure.

What is the main difference between software development outsourcing and outstaffing?

The US market has been experiencing a shortage of high-quality IT talents who can work at an affordable price. Many startups choose to outsource their projects for these reasons. Both business owners and individuals often seek help from industry experts to make their idea a reality.

outsourcing outstaffing

Since you’re the head of the project, you decide what will happen and when. It gives you much higher control than what you’ll receive if you outsource. With outstaffing, on the other hand, you have full control over the management of your project and can make changes as needed to ensure its success.


The advantages of outsourcing vary greatly depending on the type of outsourced service, the company’s needs and goals, and the provider selected. Many businesses prefer to outsource or outstaff their projects rather than build an in-house team. That being said, if a customer has preferences, they can always influence team formation.

Outsourcing company/vendor — a business dealing with partial or full-cycle product development remotely. Outstaffing (also, staff augmentation) — a cooperation model when a client hires developers from a tech vendor to work with the client’s in-house team. Outstaffing company/vendor — a tech vendor company that searches, hires, and provides clients with various-skilled developers to work on clients’ projects with its in-house team. More control on your end means less responsibility on theirs and vice-versa. If your vendor has proven experience in software development and remote team management, either of the models should be on the table.

Outstaffing software development: pros

The providing company handles payroll, benefits, equipment, bonuses, sick leaves, holidays, and employment taxes in this model. However, the outstaffed team member is exclusively dedicated to the contracting client. Every day more companies, from large-scale https://www.globalcloudteam.com/ businesses to startups, resort to Outsourcing to expand their team capabilities. Same goes for EU-based companies and their Eastern-European and Asian counterparts. However, different strategies come into play when finding the right business partner.

outsourcing outstaffing

Still, it takes over the distribution of functions and controls the work. At the same time, the payment of wages, the provision of necessary equipment, and the workplace remain in the hands of the contractor. With staff augmentation, a company chooses to add to their team individual engineers who are legally employed by another company—outstaffing one. In this way, clients don’t have to find and select the developer(s) for their company themselves. They select from already vetted professional developers available in outstaffing company’s talent pool.

Offshore Development Models

Come up with a product requirements document (PRD) and assign priority levels to those requirements. Share with the vendor everything there is to know about the project budget, scope, schedule, quality requirements and have the ability to pay for the vendor’s services.3. However, only some provide the reliability, talent, and professionalism that businesses value. If you hire outstaffed developers who can’t deliver results, it will hinder rather than help your business. Next, hold an in-person interview with the outstaffing team, preferably with a technical manager. Find out if they have developers armed with the skills that your team needs.

  • Outsourcing and outstaffing are two different models, and it is only by gaining an in-depth understanding of both a client can make an informed choice.
  • That said, if you value control and a high degree of participation, outsourcing may not be the ideal solution for you.
  • Зerhaps these companies do not need long-term cooperation and constant improvement of their product — they need a team exclusively for a point project.
  • Since the outstaffing team is working under your supervision, they have to oblige to confidentially agreements and other protocols.
  • Maintaining a highly skilled staff of professionals to carry out each process, on the other hand, is not a “cheap” decision.
  • Outstaffing can lessen some risks related to employment, such as complicated legal and HR issues.
  • Outstaffing might be a perfect solution for those seeking more control over everyday tasks.

With an outstaffing company, you are creating an extension of your team by hiring a remote team who will work on behalf of your company. However, the main difference is that these people do not become full-time employees. Instead, you team up with an external agency and pay for their services only. Outsourcing and outstaffing are two of the most widely used IT models nowadays.

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These specialized service providers provide the requested services on the client’s behalf. Outsourcing typically involves a contract that specifies the work’s parameters, service-level agreements, and performance metrics. Outsourcing works for businesses who don’t have an IT infrastructure to manage your needs, or you have too much on your plate but would still like to get the work done. Meanwhile, outstaffing works for businesses with an existing IT department that need support to handle specialized parts of the development process. Outstaffing has some fantastic uses, especially for clients who don’t want to relinquish all organizational and management power to a vendor.

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