Outsourcing vs. outstaffing: make an informed decision

Between securing the company’s network from cybersecurity attacks and staying up-to-date with released patches of the different programs the company uses, the IT department somehow seems to be constantly deficient. No wonder the global outsourcing market is growing at a breakneck speed. In 2019, the world outsourcing market size stood at $92.5 billion, and it’s estimated that by 2025, it will reach a whopping $397.6 billion!

Outsourcing vs Outstaffing cooperation models

Software development is not only about finding the time to code programs. It also involves having the expertise and the proper infrastructure – things that many companies cannot afford. Initiating a development project with limitations on either of the two is a recipe for disaster.

However, it is no indication that companies with such constraints cannot have a successful project. The IT industry has seen the rise of dedicated development teams that take over software development either through outsourcing or outstaffing.

Now, let’s get to dig deeper into outstaffing vs. outsourcing, two terms that are different but often used interchangeably.

What is IT Outsourcing?

When a company or individual hires the services of a programming team, giving them the mandate to run all core software development processes, we refer to that as IT outsourcing.

Once a contractual agreement is signed, the client gives the outsourcing company clear instructions, intended software specifications, and overall expectations of the end product. All the client does is wait for the programmers to deliver an efficient product.

What is IT Outstaffing?

An IT outstaffing model is similar to having a company branch in another country. Here, the client heads the remote dedicated development team, unlike IT outsourcing, where a client is not in charge of the SDLC (software development life-cycle).

IT outstaffing in Ukraine is growing in popularity for many reasons, with one of them being the client’s ability to pick their preferred development team. By managing and encouraging collaboration between the remote and in-house programmers, the client has a better chance of developing efficient software.

Comparison Between Outsourcing and Outstaffing: What You Need to Know

Outsourcing and outstaffing are two different models, and it is only by gaining an in-depth understanding of both a client can make an informed choice.

In this case, we will compare these models in relation to four major parameters: control, quality, security, and flexibility of the hiring process.

Let’s delve into specifics.

Control

The level of control clients have on a particular project significantly affects their overall project satisfaction.

Outsourcing and outstaffing have different levels of control over the development project, which directly affects the outcome.

In the outsourcing model, the developer presides over the entire project and the client does not deeply interfere with it. Meaning, the client has no significant influence on the development process and the program’s outcome.

On the other hand, outstaffing allows the client company to fully manage its team. Clients have total control over the entire product creation, calling the shots in all processes. Since they are in the driver’s seat, clients have access to every employee, reaching out to them when the need arises.

Considering that the client has unlimited influence over the development team, they also determine the pace at which the programmers build the software.

Quality

The quality of a project is of paramount importance. In both models, the client has access to highly-trained developers with high levels of expertise. However, this does not always warrant impeccable services.

Below we look at how outsourcing and outstaffing may differ in quality despite the availability of skilled personnel.

To achieve the desired quality, a client needs a dedicated software development team that can guarantee efficiency in operations. Outsourcing companies gain their income by entering into partnerships with different clients. As such, teams can work on multiple projects simultaneously. This shifts focus from a client’s project, compromising its quality. Also, with the lack of client control in the outsourcing model, the client cannot bet on the team’s level of dedication towards their project.

The Outstaffing model has a strong prominence for quality. The client company chooses a dedicated development team that works under it — more like an offshore branch. The team only handles the client’s tasks, which guarantees dedication towards the project. As a result, you can always expect high-quality end products.

Security

Security of company data and client’s sensitive information is of the utmost importance. One ‘small’ mishap and a company may suffer insurmountable losses and face litigation. Loss of client trust is also another detrimental effect of data leakage.

So, which of the two models offers better security?

Loss of sensitive data is a significant cause of concern when outsourcing. The thought that an IT outsourcing company might share client data with third parties is crippling. However, a client can minimize such chances by verifying the legitimacy of the outsourcing company. Checking the privacy laws governing the company is also vital. As a precaution, the client should only give the information needed – nothing extra.

A situation where a software development process requires the client to divulge sensitive company information is not rare. In such a case, it calls for the client to be extra careful how and to whom they share the information.

In an outstaffing model, the client is the head of the team. That means they can easily monitor how software developers use the given data to them. Besides, client companies can implement the necessary measures to ensure the information remains accessible only to authorized personnel, not the entire team of their offshore partner. Clients can then relax knowing there is a minimal chance of data leakage.

Flexibility in The Hiring Process

The hiring process plays an instrumental role in the continuity and success of any project.

Let us see how these two models match up.

Here, a client company will outsource its project to an offshore company and expect it to be delivered by the due date. The client does not take part in the hiring process. Actually, they do not have direct contact with the developers. When they want to address certain areas in the development process, they must go through the project manager.

On the other hand, outstaffing is a flexible hiring model. In as much as the IT outstaffing company is responsible for setting up the team, the client has the final say in the hiring process. The company can choose a team and remain flexible in the number of dedicated software developers they need on the project.

Outsourcing vs. Outstaffing: Which is a Company’s Best Pick?

This one is a vital question that companies seeking software development often ask. Well, the question does have an answer considering that the number of companies veering off in-house software development and implementing outsourcing or outstaffing continues to grow.

From the information shared, it is clear that outsourcing and outstaffing are great solutions for companies that do not have the infrastructure to create high-quality software and experience a shortage of local skilled specialists. These two methods are an integral part of developing high-quality software fast.

To help you choose the right one for your company, consider this:

Some companies do not have well-laid down structures on how to undertake software development. Also, these companies may not possess the necessary skills and infrastructure to hire competent software developers. Зerhaps these companies do not need long-term cooperation and constant improvement of their product — they need a team exclusively for a point project. If your company falls under this category, outsourcing is the best suit.

On the other hand, some clients will insist on a systematic approach to software development. In most cases, these companies are looking for a long-term solution and full-time dedication, but cannot find the required talent inside the country. If you own one such company, outstaffing is the way to go.

To ensure the success of either or both of these models, the client must have clear-cut goals. Measurable goals and success go hand-in-hand; that’s a fact.

Considering that unclear goals are an obstacle to the success of the project, the partner should get ahead of any miscommunication by guiding the client through the goal-making process. It is one of the sure-fire ways to achieve notable success.

Newxel: Your Reliable Service Provider

At Newxel, we deal with IT outstaffing in Ukraine. We are an excellent option for companies looking to acquire proficient tech specialists on a reasonable budget. No matter how specific you are about your project, you can be sure our recruiters will assist you in rounding up a development team that helps you exceed your project’s expectations.

We fully understand the intricacies of information technology outstaffing and keep an eye on your needs and business objectives. As such, we will assemble a dedicated development team or open an offshore R&D center that will meet your development needs.