Outsourcing vs. Outstaffing IT Models: What’s The Difference?8 min read
IT outsourcing and outstaffing models have developed to service businesses worldwide. While both strategies essentially work in the same way—remote developers employed by a different (non-your) organization assist you with the jobs your in-house team is unable to complete—they are not the same. Discerning the right strategy for your projects can be aided by understanding the distinctions between outsourcing and outstaffing models.
Due to this, we have developed an analytical guide that defines outsourcing and outstaffing as well as highlights their primary distinctions. This post will also show you how to discover top-notch cooperation partners for your IT projects and choose which model best suits your company’s demands.
Outsourcing IT Model: What is it?
A whole dedicated team of programmers, designers, QA engineers, and project managers can be hired using the IT outsourcing business model. The hiring of a development team to handle one (or more) of your development projects remotely is referred to as outsourcing.
A team that is outsourced can handle projects like developing software, building websites, and creating apps. An outsourced IT model has the distinctive feature that the development team members you select will handle every facet of your project, from concept to testing.
Most of the time, your only contact with the outsourced team will be a project manager to whom you’ll communicate your deadlines, updates, and demands.
Outstaffing IT Model: What is it?
With staff augmentation, a business decides to outstaff one by adding engineers who are really working for another business to their team. Clients can avoid having to find and choose the developer(s) for their business in this way. They choose from the talent pool of professionally qualified developers that the outstaffing organization has access to. By collaborating with a business like this, your enterprise can hire a team or individual to work on a certain task or project.
However, outstaffing is a methodology that can assist a business in temporarily enhancing its development team. Although you will oversee the hired development team or individual, the outstaffing firm you work with will take care of the developer’s payroll. Although an IT strategy for outstaffing is similar to outsourcing, attracting talent through outstaffing has various qualities.
Outsourcing vs. Outstaffing IT Models: What’s the Difference?
As previously indicated, a corporation recruits a team or individual to work on a particular project or job in both the outsourcing and outstaffing IT models. Additionally, both times these developers are working remotely on the project. However, the management of the project is where those two differ the most.
When a corporation outsources, the client organization hires the entire development team as well as the project manager. Of course, the client is still in power, so they are setting all the rules and objectives up front.
On the other hand, outstaffing refers to the process through which a business expands its development team by bringing on one or more engineers. Therefore, the client firm’s CTO or project manager, not the development company, manages the project’s scope.
Therefore, since you are the one managing the outsourced professionals, using an outstaffing model needs a better awareness of the technical aspect of the project on your end.
Beyond this primary distinction, outsourcing and outstaffing differ in numerous ways that we have organized into a table, including pricing, management effort, and payment.
- Outsourcing: Since the task or project is managed by a project manager and a fully outsourced team from outsourcing, the customer doesn’t oversee it personally.
- Outstaffing: Management of the contracted team rests with the client.
- Outsourcing: It costs more to pay for the work of the entire outsourced crew.
- Outstaffing: Paying for the work of one or several developers for a certain piece of work is less expensive
- Outsourcing: The client has fewer obligations because the entire project is handled by an outside team, but they should still be involved to produce good outcomes.
- Outstaffing: The client has more duties because they are in charge of the IT specialists they hire using an outsourcing strategy.
- Outsourcing: The business typically manages the payment (via milestones)
- Outstaffing: Payroll for the outsourced individual or team is handled by the development partner, not the client business.
It becomes clear that, despite the fact that outsourcing and outstaffing are based on the same ideas, they differ significantly from one another. Investigating the benefits and drawbacks of each paradigm is crucial for this reason. You may then decide which model is ideal for your business by doing this.
What are the advantages and disadvantages of outsourcing?
Depending on what your business requires, outsourcing could be a wise decision. The following are outsourcing’s key benefits:
- Less responsibility: The project manager from an outsourcing business is in charge of the overall management of the outsourced team, the quality of the code, and the task’s successful completion. As a result, you will have fewer managerial and technical obligations.
- All hiring is done by partners: large sourcing and recruitment departments, a sizable contact list, and tested techniques for attracting new people are all assets of outsourcing firms. All of this enables them to swiftly hire a fresh tech expert to work on your project.
- No tools are required: You won’t need to supply any specialized equipment when working with an outsourced development team because it is already covered by development charges.
- Rapid start: Engineering talent is plentiful and project-switchable at outsourcing organizations. As a result, you may begin working on your project right away and gradually expand your team by adding more engineers.
Although outsourcing has been demonstrated to be a viable IT model for completing tasks, it is not appropriate for all businesses. Let’s examine the drawbacks of outsourcing in more detail:
- Cost: Since you hire a distant team, outsourcing is notably more expensive than IT outstaffing even though it is typically more cost-effective than an in-house team.
- The project is not entirely under your control: Your organization will have fewer obligations with outsourcing, as was already indicated. However, an outsourced team’s project manager and vendor/partner perform the majority of your project’s tasks. Similarly, IT outstaffing services are unquestionably a superior choice than outsourcing if you desire complete control over an IT project.
- Communication barriers: Since the team works remotely and you don’t have complete control over your projects or daily communications, there may be some misunderstandings about your rules.
What are the advantages and disadvantages of outstaffing?
Like outsourcing, outstaffing is the right IT approach for many businesses. The following are the key benefits of selecting an outstaffing company:
- Complete control over your project: When hiring outside developers, you get to direct their daily activities. Even though you will have additional duties, this is a preferable alternative for businesses that have the technical know-how necessary to oversee an IT team directly.
- Cost: Since you can determine how many professionals you need, outsourcing is more economical than hiring in-house workers. Additionally, you don’t need to worry about the wage payments because your partner is in charge of them.
- Using a partner to hire: For each client’s demands, a good outstaffing service has developed a procedure for locating and screening the appropriate developers. They assist you by managing the employment process.
- Start right away: just like outsourcing, outstaffing enables you to rapidly assemble the ideal team for a forthcoming IT project.
- Flexibility in hiring: Outstaffing is by far the most adaptable IT approach, allowing you to change your hiring procedures on the fly.
Let’s examine the drawbacks of outstaffing in more detail:
- More responsibilities: As was already noted, outsourcing is ideal for large organizations or start-ups that require daily management of an outside IT team or individual. However, it also means that you are responsible for project management. Therefore, having a tech representative who can oversee remote developers is essential.
- Communication barriers: Since your understaffed engineers are working remotely and occasionally in different time zones, there may be some confusion about your instructions, demands, and requirements.
Why should you choose Groove Technology as your outsourcing and outstaffing partner?
As a great place to work, we want to ensure that all Groovers have the opportunity to explore and nurture their potential. When partnering with Groove, companies can be assured that we will provide the right talent to sustainably expand their team capacity in the long run.
As a solid foundation for the company’s expansion, Groove Technology has been successful in building a knowledgeable, productive, and technologically adept team. Because of the top-notch experts who are ready to help and provide customers with quick solutions, you won’t have to wait or worry.
- Top-tier vetted developers: Developers in our talent pool have passed a few stage selection processes.
- Full control over the hiring process: Groove allows you to host interviews with as many developers as you need. But we recommend not to think for too long if you like a developer because due to current market conditions they receive multiple offers in a short time.
- No hidden costs: When you choose to hire a developer through Groove, the sourcing and interview process is entirely risk-free. You pay only for the developer’s work after the contract is signed.
- Reviews from previous clients: Groove clients fully trust the platform’s vetting process and choose to stay with Groove Technology after partnering with us.
You can select one or both of the models for forthcoming programming tasks based on the requirements of your business. Regardless of the option you select, Groove Technology is the finest option for remotely enhancing your development team through outsourcing or outstaffing because of its thorough vetting process, flexibility offered by our marketplace, and top-tier service partners.