Over the last few years, software outsourcing and outstaffing have become common in the IT industry. To outsource vs outstaff? It looks like the “to be or not to be” dilemma.
The reality is that whichever you choose – outsourcing or outstaffing, you will greatly benefit. While they have some similarities, there are some crucial differences that we will go over in this article.
What is an outstaff team?
Outstaffed teams allow companies to achieve cost savings or reduce production time and can boost internationalization. The team members are usually located in another country, often in another part of the world, and are typically affiliated with a different time zone than the headquarters.
Outstaffing development is a fantastic option if you have a solid team and you want someone to either back them up or add additional “depth.” In many cases, companies outstaff not only because of the financial benefits (we will discuss that later) but because of the global talent available.
Benefits and use cases of outstaffing
Outstaffing is usually referred to as a 3rd party helping hand. Companies outstaff due to many reasons:
- Maternity or other long-term leaves.
- Faster execution to meet project deadlines.
- Lack of available talent in the region.
But other than that, there are many benefits which come along. Let’s see which they are.
Cost efficiency
Increased labor costs in Western Europe and the United States make outstaffing a viable option for businesses seeking labor at a low rate. Outstaffing is cheaper than outsourcing because companies that practice the strategy are able to keep overhead costs low without sacrificing quality.
Strict control over the processes
You have full control over your project from start to finish. You can keep it moving smoothly by communicating directly with everyone involved and understanding every detail of why and how things are happening.
HR Efficiency
Posting job openings, administering interviews to hire candidates, and interfacing with contingent workers can be highly time-consuming. Sharing some of your HR tasks with a third party can allow you to hire the best candidates who will already have experience working under your brand. Ultimately, this means you have more time to focus on your business details.
What is the outsourcing model?
The software outsourcing model is the practice of handing off a software development project to a third-party provider. This allows companies to focus on their core areas of operations while trusting an external source to handle software development. The company can take advantage of any economies of scale in development, then just pick and choose the features that are important to it as a customer.
Software outsourcing and outstaffing – the differences
The main difference between outsourcing and outstaffing is the level of control each provides. In the outsourcing scenario, a company hires another company to handle the more resource-intensive aspects of the job. A typical example is customer service – a company should employ customer support representatives, customer retention specialists, and analysts tasked with analyzing consumer behavior.
In contrast, an outstaffing company seeks to provide just one particular customer service role, such as a phone specialist or chat expert. However, with outstaffing, you have more control over who you hire. Let’s see the benefits and use cases of outsourcing.
Benefits and use cases of outsourcing
Outsourcing is a great choice if your company wants to grow but lacks established good practices. Outsourcing companies already have templates and a model of work.
Let’s say you want to create WordPress websites and have a scaling business. Instead of hiring someone to do it for you, you can turn to an outsourcing company that can offer you everything – all you need to do is set the guidelines.
As in the case of outstaffing, outsourcing provides similar benefits in terms of less overhead costs, but there is one huge benefit – you save much more time when you are working with an outsourcing partner since you’re not the one who controls the outsourcing team – they have their own management.
Summary
Software outsourcing and outstaffing are both great options to cut down costs and access global talent. Whichever you choose, it comes down to personal preference and your desire to control the process.