Outsourcing vs Outstaffing, What's the difference? And what should you choose?

What is the best choice?
There is one question that often comes back to us: What's better: Outsourcing or outstaffing (outsourcing vs outstaffing)? And what's the difference between both? In other words: what is most efficient, to hire an external team abroad or to leave the entire development to the developer partner?

Since more and more companies are looking for remote and cheaper locations to optimize their budgets for development, it is worthwhile to tell in which cases outsourcing should be your choice and when you should give preference to Outstaffing.

Outsourcing vs Outstaffing
Let's start by explaining what the difference is between outsourcing and outsourcing of software.

An outsourcing provider usually works on a project, which means that the customer entrusts the outsourcing provider with the entire project from a to Z. The customer rarely has access to the development team itself and the developers can work on multiple projects at the same time (depending on the appointments made).

Outstaffing is a form of remote co-operation with a hired developer. He/she performs all tasks for your company, but is officially employed by another company (the development partner). The latter acts as an employer and is therefore responsible for wages, bonuses, equipment awarded to an employee. As a customer, you provide the developer with tasks and assignments. In this form of service, the development partner is responsible for hiring and maintaining a team that is fully at your disposal. Basically you hire your own external employees who are part of your own team. This external development team can be managed by your own people or by external managers.

Outsourcing vs Outstaffing

The main difference is therefore that outsourcing refers to the complete project output by the partner, while Outstaffing allows hiring and maintaining contact with individual developers.

Advantages and disadvantages of outsourcing

Benefits
– The development partner is responsible for the quality and delivery
– Less/No project management is required on your part
– The development partner is fully responsible for all the equipment and software needed to complete the project
– You do not need to participate in the recruitment process

Disadvantages
– You have less power to intervene and/or control the development process
– If the project is not properly framed, the costs may be higher than for outstaffing
– The hourly rates are often higher than in outstaffing

Advantages and disadvantages of outstaffing

Benefits
– Outstaffing offers the opportunity to adopt great developers without having to pay high hourly rates and taxes
– there is a flexibility in increasing or decreasing the number of developers you hire
– Complete control over the development process
– Full access to your developers
– The rates for outstaffing are lower than those of other business models

Disadvantages
– The communication channels and the process must be of high quality, otherwise it may cause problems
– All delivery problems are the responsibility of you as a customer

What would be the best choice?
Since you now know the difference between the two options, I would like to take you in the best choice for your company. Whether you better opt for outsourcing or outstaffing depends on your needs.

If your company is not very focused on technology and you do not have internal specialists to monitor the work of the development team, outsourcing will be the best solution for you.

On the other hand, if you have well-defined processes and the right people to manage the team remotely, outstaffing will be preferred. Each case is unique, however, and it is always important to consult experts first.

If you need expert advice on outsourcing vs outstaffing, please Contact info@shoreteams.com or 0512-202035. We are sure to help you make the right Remote development choice (s) for your business.

For more information: shoreteams.com.