All companies, from small-sized to large-sized, want to make giant steps toward growth, which requires them to streamline their business operations and save costs. For this, they look for something extra, which is not available in their in-house staff of developers. When they do this, they face two options; outsourcing and outstaffing of developers. With these two models, they tend to be confused.
So, if you are planning to expand your business by hiring remote staff and are unable to choose between outsourcing and outstaffing, read this blog.
Differences between Outsourcing and Outstaffing of Developers
The following are some points that can help you better understand the difference between outsourcing and outstaffing of developers:
Control
When you outstaff developers, you handle the remote developers directly and have complete control over their tasks, milestones, information, and deliverables. On the other hand, there is very little visibility with outsourcing because you may not be provided with access to source codes and some project documentation.
Goal
If you think you need staff augmentation for a long period with your existing team, outstaffing is best for you. It will make it possible for you to quickly make a remote team that can be productive immediately.
You should choose outsourcing when you don’t have sufficient IT capabilities. Aside from that, if you wish to use external resources for app development, choose outsourcing.
Cost
According to the goal of your business, both outsourcing and outstaffing can provide you with financial benefits. If you need a one-off app development, you need to pay less when you outsource.
On the other hand, outstaffing is more budget-friendly if you scale your team for a long period without tiresome hiring and training.
Team Management
In outstaffing, you must be responsible for the management of remote developers, even if they are far from your premises. You should manage them as though they are a part of your in-house team.
On the other hand, an outsourced software development team relies on self-management. In simple words, it is self-managed. The outsourced team will coordinate tasks as per project requirements and report progress to you at a particular timeline.
After getting a clear understanding of the differences between outsourcing and outstaffing of developers, let’s know the perfect time to outsource and outstaff.
When should You Outsource?
If you want to save some costs, outsourcing is the best way for your business. This model is also helpful if you have specific projects or tasks that can be fulfilled without your continuous control.
An outsourcing company works with broader talent pools, which means chances are high that you will get the perfect talent at an affordable price. It doesn’t matter whether you are required to have a full-stack team for comprehensive development or just a single low-code expert, you will get what you want.
What is the Right Time to Outstaff?
If you think your team should expand, an outstaffing partner will find the most suitable specialists who have the necessary expertise you need. For the tasks in which control is very important, especially for newly-established companies or small product businesses, rely on outstaffed employees. When your business grows, you can ask the provider for extra teammates.
Advantages and Disadvantages of Outsourcing
Having known the differences between outsourcing and outstaffing of developers clearly and the right time for each one, you should know the pros and cons of these two. So, first, let’s start with outsourcing:
Positive points:
- Less cost: Outsourcing helps in saving costs because it allows you to benefit from lower labor costs in other regions. It’s one of the major benefits of hiring a nearshore outsourcing web development company.
- International talent pool: Outsourcing allows you to leverage an international talent pool, which will provide you with access to high skills and expertise.
- Risk Management: Outsourced professionals take care of risks related to particular tasks or projects because they have experience in coping with various issues.
- Focus on business: When software development tasks are delegated to outsourced professionals, you can pay your full attention to major business tasks.
Negative points:
- Less control: You will have less control over your outsourced team, which may affect the quality of work.
- Communication issues: Due to different time zones and cultures, communication challenges can have a negative effect on collaboration and project outcomes.
- Proneness to poor quality: If your outsourced team doesn’t provide you with transparency in project progress and communication, it may lead to poor work quality.
- Security issues: If proper measures are not taken for the protection of confidential information, sharing data with an external company may lead to security risks.
Pros and Cons of Outstaffing:
For a crystal-clear understanding of outsourcing and outstaffing of developers, you should know the plus points and minus points of outstaffing as well.
Benefits:
- Complete control: You can have full control over the outstaffed team, which will help you better focus on tasks and projects.
- Effective communication: Outstaffing allows closer communication, reducing the risk of misunderstandings. Thus, the project will move toward its fixed goal faster.
- Flexibility: Hiring an outstaffed team will allow you to benefit from the flexibility to adjust the priorities of the project according to the specific requirements of the client.
- Better risk management: Due to having complete control over your project, you will be able to manage risks. Thus, you will solve problems quickly and change the strategies according to the circumstances when necessary.
Issues:
- Not much cost reduction: Although oustaffing is more cost-effective than in-house hiring, you will not save much.
- Management burden: It’s very hard to handle remote teams, as it requires effective coordination for consistency related to project goals and timelines.
- Dependency on talent pool: Outstaffing banks on the available talent within the provider. Thus, you can’t have access to a wider range of expert skills.
Quality and security issues: Cooperating with divided teams may be problematic, as it requires continuous feedback and monitoring, which may lead to poor quality of work. In addition, sharing confidential information with an external team comes with some security risks. Thus, you need to be more alert toward data protection.
Key Takeaways
The major difference between outsourcing and oustaffing of developers is that you have more control over staff in outstaffing, and less in outsourcing. Aside from that, outsourcing allows you to have access to an international talent pool, and outstaffing provides you with access to talent available within the provider.
Outsourcing is best for the management of tasks and projects without continuous control. Rely on an outstaffing partner to ask them to find you an expert for your tasks in which you need to have complete control.
