One of the universal questions that the IT companies often ask is whether IT Outstaffing is better or IT outsourcing. What is the difference between them and which one is a more effective solution for an IT company? When more and more software companies are looking forward to remote locations to reduce the budget of software development, Outsourcing is suitable for a few companies. At the same time, Outstaffing is a better option than the other.
First, you need to know the definitions of Outsourcing and Outstaffing to develop a better understanding of the concepts.
- An outsourcing agency works on those business models that are based on projects. In other words, the client assigns the entire project to the outsourcing company from the scrap.
- Outstaffing refers to remote employment in which the company you execute the duties for the client company. Therefore, the agency is the employer and is responsible for the workers’ bonuses and wages while the client company provides them. In other words, the software development company hires and maintains a team of IT specialists.
The primary difference between Outsourcing and Outstaffing is that the former lends support for the entire project while the latter is responsible for hiring and maintaining development teams.
Benefits and Drawbacks of Outsourcing
The following are the merits and demerits of Outsourcing to note.
Pros of Outsourcing
- In Outsourcing, the developer is solely responsible for the product building work according to the clients’ compliance. For any technical issues or bugs, the responsibility lies with the developer.
- The Outsourcing company is accountable for managing the team of developers, and all you need is to give proper instructions to the team.
- The task of hiring and managing the developers goes to the outsourcing company, which acts as the team’s employer.
- Outsourcing is cheaper than recruiting in-house staff, especially if your business is present in a location where people ask for higher salaries.
- The speed of software development improves when you hire an outsourcing company.
Cons of Outsourcing
- The responsibility of management increases the cost of development when you hire an outsourcing company.
- As the client does not have any involvement in the outsourcing work, they do not have control over the entire project.
- Often, the remote outsourcing team members may not have excellent English skills, which raises communication issues.
- The outsourcing company may have access to the client’s confidential information, especially the code, which may go to the third parties.
- Often, the remote outsourcing developers may not cater to the quality of work.
Advantages and Disadvantages of Outstaffing
IT Outstaffing is a process of hiring and managing remote software developers, although the Outstaffing agency hires them officially. The IT Outstaffing company you choose becomes the official employer becomes accountable to pay the salaries of those developers. Numerous Outstaffing agencies provide IT developers and technical teams to various clients across the world.
The following provides a sneak peep into the pros of Outstaffing
- With Outstaffing, you can hire the best professionals without paying any taxes.
- As a client company, you will have full control over the process of software development.
- It allows the client company to increase or reduce the team of developers based on the requirements.
- The client can access the team members, and the rates of Outstaffing are lower than the rest.
You must also note the disadvantages of IT Outstaffing.
- The clients need to manage the software developers’ team, which implies that they should have the skills to execute this task.
- As you have complete control over the developer’s team, you are accountable for the IT project’s outcome.
- Like Outsourcing, you cannot rule out the chances of software developers’ errors are not well-versed in English.
Outsourcing or Outstaffing
Whether you need an outsourcing or Outstaffing agency depends on your needs. If your company does not focus on technology or does not have qualified IT professionals to manage a developer’s team, you can outsource. In contrast, if you have robust management to handle developers’ remote team, you can select Outstaffing. You can read the definitions of both outsourcing and Outstaffing to decide an option that suits your IT department’s requirements.
Also Read- Outsourcing Vs. Offshoring