IT outsourcing or Outstaffing: what should company choose?

Over the past few years, companies of any size recognize IT outsourcing and outstaffing as a solid solution for software development. Among the main reasons why companies prefer to choose these services over in-house development are:

• Cost efficiency;
• Possibility to focus on relevant business tasks;
• Wider technology opportunities;
• Access to global talent pool;
• Improvement in product quality.

Even though these reasons applied for both services, they still have specific differences, advantages, and disadvantages. Let’s take a closer look at them.

How does IT outsourcing work?

IT outsourcing is a practice that implies entrusting software development to a third-party company with the needed equipment, technology, and team of developers. You use this service when your company does not have an in-house team, or they are too occupied with other projects and tasks to take up another project.

The main point of such software development is to reach out to the needed resources when your company does not have them.

Advantages of IT outsourcing

• Provider of service is responsible for code quality. If there are any issues with it, the team of developers should improve the situation in any case.
• You can be involved in the development process to the extent you want. If you are too busy, you can delegate the whole project to managers. If you want to control the development process, you can have daily meetings and follow-ups.
• Provider fully manages specialists. Managers work with recruitment, taxes, payroll, working benefits, and other related things. Moreover, the team works from the provider’s office. It means you can save office space.
• You do not need to buy additional software or hardware for the development process. Of course, the team of developers will need specific software and hardware. However, this part of the development process and costs are the complete responsibility of the outsourcing company.

Disadvantages of IT outsourcing

• If you are used to controlling every step of your specialists, it is not completely possible in IT outsourcing. Some activities happen only among team members or with managers from an outsourcing company.
• You might have miscommunication. Such a case can happen when you have different cultures and languages. However, it is not critical and can be solved. Learn about ways to improve your communication in our article “10 tips for proper communication with the outsourcing team”.

How does IT outstaffing works?

IT outstaffing is a practice that implies long-term work with specialists from the outstaffing company.  Usually, such developers become part of your in-house team and do not go from project to project.

In other words, you will employ a developer to work on your project and other tasks for a certain period while the provider of IT outstaffing will manage specialist’s bonuses, working benefits, payments, taxes, etc. Moreover, IT outstaffing works great when you need to expand your in-house team without hiring a full team of developers.

Advantages of IT outstaffing

You will have a suitable hiring model. Your company will get a specialist who will be fully dedicated to your processes, while the IT outstaffing company will be responsible for payrolls and other related stuff.

You will have complete control over the specialist’s work. Even though the IT specialist will work from the provider’s office, you will coordinate quality, used resources, development process, and other related things.

Disadvantages of IT outstaffing

You are fully responsible for your project. If something goes wrong in development, the provider of IT outstaffing will not help you with it. Outstaffing company is the only mediator between your company and their specialist.

You might have issues with communication channels. As your new developer will work remotely from the provider’s office, it is essential to choose the right channel. It should be simple, straight, and understandable for both parties. Otherwise, someone might miss a notification about a new task or meeting. It is the simplest example; the situation with wrong communication channels can even lead to the termination of a contract.

What should you choose?

When you choose between IT outsourcing and outstaffing, your company should pay attention to existing and needed resources. These questions may help you:

• Do you have all the essential resources to manage specialists remotely?
• Are your internal development processes well-ordered to work without any downtime?
• How quickly can you integrate a new employee into project management?
• Can your team work effectively with a remote team member?

If the answer is “yes” to all of these questions, you should try IT outstaffing. It will save you time and money in comparison with hiring an in-house IT specialist.

• Can you allocate money not only for IT projects but also for other expenses related to outsourcing?
• Can you trust enough the outsourcing company to manage some of the processes related to developers?
• Would you work with the outsourcing team even if you had 12 hours difference?

If the answer is “yes” to all of these questions, you should try IT outsourcing. Learn about other reasons why people opt for this solution in our article “Why do companies outsource?”