They are responsible for quality assurance and meeting your project parameters. The client need not do the technical supervision, successful project completion is the headache of the provider. The client is freed from the headache of management efforts such as recruitment, administration, HR activities, etc.

Next, hold an in-person interview with the outstaffing team, preferably with a technical manager. Seek clarification on how the outstaffing arrangement works. https://globalcloudteam.com/ Find out if they have developers armed with the skills that your team needs. Or if they have overlapping experience with your business’s operation.

Software Engineering

Outstaffing is a staff augmentation process where businesses hire software professionals from IT outsourcing companies to boost their existing teams. In this arrangement, software outsourcing and outstaffing the outsourced developers continue to work at their workplaces but are fully managed by the client company. Software or hardware is provided by the outsourcing company.

• However, do not forget that each case is unique, so we recommend that you first consult with specialists.
• By nurturing your ideas from concept to launch, our dedicated team is guaranteed to bring your plans to life.
• You can do so on search engines, business forums, or browsing a professional platform like Clutch.
• As a result, your business can become more efficient and productive overall.
• When it comes to the management of external teams, outsourcing vs. outstaffing are polar approaches.

But let’s start from the grounds and look closer to the software development business models that exist in the business world. Though it requires a lot closer supervision and management, it’s very cost-effective and can eventually lead to a long-term relationship if both parties perform as expected. You can also form a bond with your outstaffing provider, which will make jobs easier in the future. The best way to think of outstaffing vs outsourcing is to think of the former as another dedicated team member that just so happens to be working remotely. So, if your company is new, has limited software development budgets, or otherwise needs to do things “on the cheap,” hiring an outsourcing company might prove cost-prohibitive.

Qualified candidates in IT are not very easy to find and, if found, to keep on your team. Instead of building an expensive in-house team, many companies opt to outsourcing and outstaffing. It is important to note that outsourcing software development is a two-way street regarding the advantages it offers to professionals and organizations. Scalability of team size, according to CTOs, is the top advantage (42%), followed by efficient utilization of time (39%) and higher productivity (~30%), respectively. The Israeli company expects a 70% jump in outsourcing for software development at startups. In 2021, startups outsourced 17% of software development, will outsource 21% in 2022, and are slated to outsource 36% in 2023 if trends continue to hold.

Risk management

By dividing the project into smaller tasks, it’s easier to stick to the overall timeframe. Outstaffing is a form of outsourcing that involves employing professionals from outside a business for specific tasks or short-term projects. Outstaffing assumes that you already have an in-house IT department or engineers with whom you have long-term contracts. Essentially, outstaffing is an extension of your team for a limited period of time.

They needed to upscale so they kept their operation cost low by outsourcing their development to developers in Russia. As the company grew and was later sold to Facebook, now Meta, the developers were relocated to California. According to Jack Ma, founder of Alibaba, his business took off after he outsourced the development of his website to developers in the United States. So when the question arises of either creating an in-house team or outsourcing, pick the one that meets most of the listed requirements.

Disadvantages of Outstaffing

Do you solely need the team of developers, or will they provide you with a PM or QA as well? Discuss and include it in your agreement before signing it and starting the project. With a comprehensive bill, you can budget and plan accordingly. When it comes to the management of external teams, outsourcing vs. outstaffing are polar approaches. In case of outstaffing, the client will manage the remote team and ensure that the SDLC goes in the right direction.

When you outstaff software developers, they become an extension of your own team. This gives you more control over the direction of the project since they are working directly under your supervision. While the latter one acts as an employer and is, therefore, responsible for wages, bonuses, equipment granted to a worker, a client company provides a worker with tasks and assignments. Learn more about why and how to hire a dedicated development team. The influence of outsourcing vs. outstaffing is usually very different.

However, that doesn’t mean every business should outsource or outstaff engineers every time they need a developer. In-house engineers are indispensable on a core development stage. You should spend more time and money to hire dedicated, involved, and high-quality engineers to work on your product development in the beginning. Then, you can outsource additional staff to extend your team.

Another reason why companies outsource software development is because it can help them increase their overall efficiency. 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. The fixed price model of outsourcing and outstaffing involves an agreement within which a partner company promises to produce a project with a clear price. You contact the partners and agree on the necessary payment through the overall analysis of its needs. The idea of this method is that you won’t pay more than agreed for the overall outsourcing/outstaffing project.

When should you outsource?

“As remote work becomes the norm, many companies have taken this opportunity to hire anywhere in the world. They can see that it’s fueling unprecedented productivity and growth, as they have become accustomed to virtual meetings and cloud,” said Commit. According to Computer Economics, 60% of organizations outsource application development. However, this will not create too many problems for you if the outsourcing fulfills your project tasks and your requirements. This problem is perceived especially acutely when there is a large time difference. This can lead to misunderstandings that affect work quality.

Hence, its other name, «Bespoke» Software, which is an old English terminology in tailoring a suit specifically for man, usually a rich one. In this case, as a startup, you are obviously not trying to flaunt your money but keen on meeting some needs that the COTS would not give, such as an application for your services. You can fully control the software development process as well as have access to any of the team members.

Offshore Agency Manages Developers

They worked with us as a partner from the start for creating app wireframes and defining UI/UX even before signing the contract’ says Daniel Lapp, CEO at Trymeet ApS. However, if a company regularly receives negative feedback about a particular service, you’d be better off looking for alternative solutions. To ensure the new team members feel at home, you can ask employees to check in with one another. IT outstaffing reduces the number of staff, which will reduce HR-managers responsibilities. The contracting authority wants to reduce the administrative costs of personnel office work, as well as costs related to the calculations and payments of salaries. This can be a barrier to coordination with the hiring company.

Outsourcing vs. Outstaffing: How to Choose & Not Fail?

That said, if you value control and a high degree of participation, outsourcing may not be the ideal solution for you. While this was a serious issue in the past, in the age of remote employment and Zoom, it’s no longer such a barrier. Clear communication channels can easily be established, even in the early phase of cooperation. Preethi Saro Philip is a Post Graduate Research Degree holder in Economics with more than 10 years of experience in writing, editing, research and teaching. She has an intense passion for content crafting and calls herself a ‘wordsmith’. She enjoys writing on wide-ranging topics including business, technology, health & lifestyle, education, environment etc.

Naturally, you would like to have a compliant and reliable solution without spending valuable time on searching and hiring skilled and experienced developers. In this case, outsourcing development to a tech vendor is a time and cost-effective solution. However, the main difference between outsourcing and outstaffing is that outstaffing hires experts from other firms to work on the project under the control of the business owner. On the other hand, outsourcing passes the web development process to a third firm.

Backend developers

You also plan your work and decide when it’s time to add or remove certain specialists. This cooperation model helps you save money as you augment your team only when needed. Outsourcing is a popular practice for businesses that don’t need a permanent full-stack team as it’s costly and not always necessary. And while this approach has its advantages, you should also be aware of its pitfalls. One of the main reasons why companies choose the offshore development service is to reduce cost on development. This is especially relevant for countries with high development cost.

Outsource vs Outstaff Your Software Development Project: What Should You Choose?

This way, there’s a high probability that one of the parties would be at a huge disadvantage, creating a perfect ground for conflicts between the relevant partners. Now that you know the outsourcing and outstaffing difference in software development, and their pros and cons, let’s discuss when they will be most beneficial for your company. You’ve landed the client that needs one of the cloud solutions you’ve previously developed for them, and you don’t have cloud engineers on your team.