Right people are the backbone of a successful project. Although choosing a software company is easy, it’s a tricky task if you’re a first-timer. Even if you’ve finally decided on the company you want to cooperate with, the following question arises: “Which software development model do you prefer, outsourcing or outstaffing?” And here you are, being in two minds again.
Here we explain all the differences between these two models, comparing their pros and cons, and helping you decide which one to choose.
Outsourcing vs. Outstaffing in a Nutshell
These two models are similar since they both imply offshore software development and offer dedicated developers. If you have little to no experience with software development agencies, they’ll seem like two peas in a pod to you, making a choice troublesome. So, how do you tell them apart?
Outsourcing
This is a complex approach, which comes down to delegating projects to a third-party company to realize it from A-Z. If you have occasional bursts of IT needs, outsourcing will be the winner among other development models.
Imagine you need to develop a product, but your company doesn’t have software specialists, an in-house development team, or no office space to place it. Meanwhile, you aren’t sure whether you’ll have other software development projects in the near time. So, what’s the point of hiring in-house developers and paying salaries on a regular basis?
Even if you recruit, hire, onboard, train, and offboard these specialists, it’s unlikely they’ll be willing to go this long way to leave your company within a couple of months.
In this case, contacting an outsourcing provider will be the most rational choice. You give your requirements to a remote development team, and the managers find employees necessary for the project. At the outcome, the team might include business analytics and UI/UX designers alongside software engineers, PMs, and QA specialists.
After the team’s been established, there are two options: you can closely monitor the projects or fully rely on a PM with it.
Pros of Outsourcing:
- Increased focus on core business tasks
When you delegate all the software development work to the outsourcing vendor, you free up your time. Hence, you concentrate on your key business areas.
- Lower development costs
With a remote software development team, you can save significant costs without sacrificing quality. Skilled programmers can be found anywhere, not only in Silicon Valley. So, if you can get a project done for less money and of high quality, wouldn’t you opt for this opportunity?
- Wide choice of experts
Do you need a couple of Python developers or Ruby programmers? Or maybe your project requires Erlang or Haskell specialists? You can be sure your outsourcing vendor will find them.
Cons of Outsourcing:
- Lack of control over the projects
If you’re working with experienced outsourcing companies, you’re unlikely to face this issue. However, less well-known companies often face poor administration issues. So, if you detect insufficient management skills, like inefficient planning or low-quality products, it’s time to opt for another outsourcing agency.
Outstaffing
This approach means that you hire employees via the vendor and have access to them as their manager, controlling the processes day by day.
Outstaffing option works best only when you already have an in-house development team with people who permanently work for your company. However, let’s say there’s an urgent need to hire more specialists, but you and your existing team don’t have enough time and resources to manage them.
What’s the solution in this case? Hiring more full-time specialists is efficient only when the increased scope of work is constant. But if it’s temporary, you should opt for outstaffing then.
When engaging in this approach, you hire remote employees as if they were your full- or part-time specialists. The only differences are that they aren’t in your office and have lower salary demands.
Pros of Outstaffing:
- Increased control
Since you’re the one who directly manages the team, you can easily monitor all the processes and detect issues the moment they arise. This allows for more smooth software development and decreases the number of possible bugs and other concerns.
- Lower costs compared to outsourcing
The client, you, is more responsible for management work than the vendor. Thus, although the outstaffing company selects the suitable specialists itself, you work with them more closely than in the outsourcing model.
- Flexibility and access to vetted experts
Your chosen outstaffing agency works as an employer for your remote employees. So, legally speaking, you don’t have any employees and don’t have to handle all the questions related to recruitment and hiring. Besides, the agencies usually have a large pool of reliable developers that will be ready to work on your project within the nearest time.
Cons of Outstaffing:
- Additional management efforts
If you’ve opted for an outstaffing model, the team will be 100% under your control. So, you need to possess a set of skills required for managing software development processes and ensuring error-free results. This, of course, requires additional time and resources.
Conclusion
So, if you don’t have time, skills, or resources to manage a remote team yourself—opt for an outsourcing development model. It’s also a perfect choice when you don’t need software development services on a regular basis because you hire specialists only when the need arises.
If you need to expand your team, have control over it, but don’t have enough time to train the employees, then the outstaffing approach will fit your needs. The vendor will handle all the management-related issues while you and the team spend time on developing projects.
