IT Outstaffing: Pros and Cons of This Model in Software Development

So, if your company is looking for IT outsourcing in a particular area or at a particular cost, you pretty much have the pick of the litter. You’ll have direct access to the executed work and assess the work of your offshore developers. In its broader meaning, outsourcing is an agreement between two parties. software outsourcing and outstaffing The first party wants to hire another company to carry out a certain activity that could have been done internally. This is when the client delegates all responsibilities to a person officially hired by another company . Contact us to get help with the choice and find a reliable tech partner.

• Computer Economics claims that 65% of businesses outsourcing application service will continue to do so and plan on further increasing their involvement in outsourcing.
• This is the simplest explanation for these two terms in the software development context.
• The hurdles of hiring are the vendor’s responsibilities.
• There is no need to deal with all financial issues.

The company decided to choose a more cost-effective option and assemble an R&D team in Ukraine with comprehensive Alcor assistance. Close and productive collaboration is assured as the outstaffed teammates are closely integrated with your existing in-house team. Here is an example of how we helped a Swedish ecommerce company in scaling their team. Starting from a single .NET developer and now to a full-fledged offshore squad, the team is closely integrated with the client’s in-house team sitting in Sweden. Check out our meticulously crafted and proven outstaffing model known as Distributed Agile Model here.

To Outsource or Not to Outsource

Computer Economics claims that 65% of businesses outsourcing application service will continue to do so and plan on further increasing their involvement in outsourcing. Outstaffing is ideal for companies that are working on newer, less established projects or who prefer to have more control over IT development. But if the development process is likely to change, outsourcing can be a difficult solution.

On the other hand, outsourcing passes the software development process to a third firm. Suppose your company is not too technology-oriented and you do not have in-house specialists to oversee the work of a remote development team. In that case, outsourcing is the most suitable option for you. On the other hand, if you have already set up some IT processes and have everything you need to manage and work with a remote team, feel free to choose outstaffing. However, do not forget that each case is unique, so we recommend that you first consult with specialists.

Cons of Outsourcing IT Services

For example, if you want to manage a project personally, monitor the quality and process of implementation, outsourcing, unfortunately, will not give you this opportunity. However, there is one thing that is common for these two models. The client manages the project processes in both cases, but in different ways, depending on the model. You need to ensure that the rules of the engagement are clearly defined. On the other hand, they can request, say 3 devs, a QA engineer, and a designer from an outstaffing agency. When their job is done, their company will simply reassign them to different projects.

You are looking to optimize your development expenses by outsourcing specific aspects of your product development. Support the team to keep them productive and aligned with the client’s business. Staff a team with the required resources and manage their compensation, PTO, benefits, etc. Once you have identified that you need help the question arises as to what is the best option.

When the company hires regular staff and outstaffed employees, it may negatively affect the quality of the work performed. Outstaffed personnel may lose motivation as they lack certain benefits and bonuses provided for regular personnel. Since customers manage the assigned teams themselves, the management costs are lower compared to outsourcing. An outstaffing company deals with all issues related to wage calculation, accounting, and payments, as well as taxes and various fees. A customer only pays the amount of money stipulated in the contract. Outsourcing and outstaffing are both beneficial for businesses.

Common Misconceptions about Outstaffing and Outsourcing

Saying something like “managing the project is up to the client” sounds great to many business owners until it actually comes time to manage the project. And while they work directly for you, these professionals are officially employed by a third-party vendor who acts as remote managers or HR directors. Owners with a https://globalcloudteam.com/ non-technical background who don’t have experience managing IT projects. The development team will make sure the code is operational before it’s delivered. This means you, as the client, only pay for the time they spend working on a particular project. There are no “extra” bills for office supplies, equipment, etc.

In some cases, outsourcing is cheaper because the partner company gives you access to all the key infrastructure. If you have your own frameworks or allow for work from home, outstaffing saves costs by giving much control over the workers. In short, claiming which approach is cheaper is difficult. You have to look at the overall processes employed in your firm to understand the relevant cost savings. Some people are gifted with either technical or managing skills.

Strongest Trends in Outsourcing/Outstaffing This Year

The contracting company has all the required tools, technologies and licenses to begin working on your project. You don’t have to spend money on equipment, a workplace and software. The experience reported by Deloitte Survey respondents is mostly (78%) positive.

This piece delves into the outsourcing and outstaffing concepts, including pros and cons of both, and why should businesses choose one over the other. They turned to the assistance of a Ukrainian company to create an extended team of developers. The vendor has taken responsibility for hiring and onboarding, as well as HR and administrative support. The team now works at the vendor’s location, but they focus solely on the OVPN project. Contrary to this, an outstaffing vendor doesn’t intrude into your work with their software engineers.

However, software outsourcing will require additional preparation. The remote developer is a part of your development team. This means communication will be vital for both sides.

They remain on the payroll of the partners, but you have more or less full command over their tasks. Usually, this type of work is remote, but it’s also possible to bring a person into your office as long as the agreement specifies this factor. When clients come to a software outsourcing company, they expect a certain level of expertise and service.

Outsourcing vs. Outstaffing vs. Offshoring

The choice of your workforce often defines the quality of the work you receive. According to McKinsey, about 70% of US companies prevail in the global share of offshoring. Also, pay attention to the campaign’s reputation, profile, and experience.

Profile Expert in offshore development strategies for technology companies and startups. Legal background in M&A, IP rights, and contract law. When you want to have direct control over the extended or outstaffed teammates without the headache of human resource management.

Even though your company will be the one that manages the hired development team or individual, the developer’s payroll is handled by the outstaffing company you partner with. For this reason, we have created an analytical guide that explains what outsourcing and outstaffing is and what the main differences are between them. This article will also help you figure out which model best fits your business needs and how to find high-quality collaboration partners to outsource your IT projects. A Dedicated Team is another outstaffing approach when you need extra hands for some regular IT services. While outsourcing and outstaffing have a lot in common, these models are very different. The confusion arises from the fact that both models offer a workforce for your business.

Which Solution is Best for You?

Scalability and speed of hiring are the main sweeteners of remote recruitment. While an outsourcing vendor and outstaffing company shoulder all time-consuming duties, business owners focus on mission-critical tasks. All these translate into growing into continuous business expansion. In an outsourced team, the main person to maintain contact and communication with the client is the project manager.

Some outstaffing companies dole out related tasks from different clients to different employees. While this might protect the interests of their business, it may not always protect yours. However, it can also be detrimental as outsourcing companies are often not as qualified or experienced as the company doing the outsourcing. This can lead to issues with quality and efficiency, which can ultimately cost a business more money than if they had simply hired additional staff. Perhaps the most obvious benefit of outstaffing is that it can save your company money. When you outsource a task, you only pay for the work that is done.

What Should You Consider While Outsourcing A Project?

As your business grows and more employees are added to your payroll, you will need to hire a full-time team. Outstaffing has become increasingly popular in recent years as businesses attempt to do more with less. By hiring an outside firm to handle certain business tasks, companies can save money and focus on their core competencies. Here are four benefits of outstaffing you should be aware of. Getting a person to complement your team can be done the same way.

Therefore, DevOps outsourcing is a more cost-effective solution for every business. Let’s take a look at outstaffing versus outsourcing comparisons according to various factors. So you will once again formulate for yourself the pros and cons of hiring outstaffing versus outsourcing teams. AllSTARSIT provides best-in-class outstaffing services for a range of international clients just like you.