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While looking at your options for the development of your project, you will quickly notice offshore development companies and the services they provide.
Most of them present you with two options for collaboration: outsourcing and outstaffing. But what is the difference, and which one suits you best?
Outsourcing
What is outsourcing?
Outsourcing is a process in which a business seeks an offshore development company to develop a project. The development is fully delegated to the offshore company, meaning they have full control over the process.
This does not require a business to have an in-house IT department since the outsourcing company is entirely responsible for the deliverables.
With outsourcing, the hiring company doesn’t need to maintain an in-house IT department. This allows businesses to stay flexible during software development and doesn’t burden them with managerial work.
The benefits of software outsourcing
The main benefits of choosing outsourcing are:
Focus on core activities
Since all development processes are outside your area of responsibility, your business can focus on its core activities and grow.
Management delegation
It’s up to an offshore development company to manage the development team, freeing up your business’s resources.
Quality development incentive
By delegating the development to an offshore development company, you incentivise them to develop a quality project, since your success will directly affect their reputation.
Hiring delegation
An offshore development company fully controls the hiring process. Instead of limiting themselves to a local talent pool, they can access new hiring markets and find more qualified specialists.
However, outsourcing comes with its own challenges.
The challenges of outsourcing
Hard to intervene in the development process
The outsourcing model doesn’t leave much control over the development process for your business. This might lead to a disconnect between business needs and how your project will address them.
Unexpected costs
Since the project’s scope isn’t well-defined, the costs might be higher than outstaffing.
In summary, outsourcing is perfect for businesses that want to develop a project but lack experience or a team. The offshore company handles almost all development processes, freeing the business to focus on important tasks.
For example, outsourcing is the best fit for startups and businesses that want to turn an idea into an MVP in 6 months.
Outstaffing
What is outstaffing?
Outstaffing is the process where a business hires software developers from offshore development companies to enhance its existing teams.
The outsourced developer continues to work at their original workplace but is managed by the client company.
The main goal of outstaffing is to fill gaps in your development team or provide them with specialised skills.
Your business would have full control over the management and tasks the outsourced developer would perform, giving you full control over the development process.
The benefits of outstaffing
Specialised talent
Offshore development companies provide the ability to hire developers with niche skills or tech stacks.
Full management control
Your business decides how many outstaff employees you need at the moment.
Full access to the team members
Instead of speaking to an offshore development company, you can contact every developer directly.
Hiring locations expansion
Outstaffing gives you access to all hiring locations in the world.
Cost-efficient
This is the most financially accessible model due to the outstaffing rates.
The challenges of outstaffing
All of the management is on you
While outstaffing provides you with more control over the development process, your business doesn’t have the same level of flexibility compared to outsourcing development.
The project is your responsibility
Since the offshore development company only provides separate developers, the project’s delivery depends on your own team.
To sum up, outstaffing is the perfect choice for businesses that already have an IT department and are seeking to cover the talent gaps with offshore development companies.
The full control over the project is on your business, while the offshore company is responsible for hiring and seeking relevant talent for your needs.
Comparing outstaffing vs outsourcing
Knowing what both cooperation models are, let’s compare them directly.
Despite being fairly similar, the main difference comes down to who is in control of the project during its development. Let’s take a look.
| Outstaffing | Outsourcing | |
|---|---|---|
|
Purpose |
Find a developer with specialised skills |
Build a project from scratch |
|
Time |
Fast project kick-off |
Requires time for development preparations |
|
Management |
The client manages the developers |
An offshore development company manages the developers |
|
Budget |
Cheaper compared to outsourcing |
Cheaper than in-house development |
Tips on choosing the right cooperation model
Deciding between two cooperation models might be challenging, so we gathered some tips to help you better understand which will best suit you.
Type of challenge
The choice between outsourcing and outstaffing largely depends on your needs and priorities.
For example, if you’re interested in covering the skill gaps in your IT department, outstaffing is your choice. At the same time, outstaffing helps if you’re looking for software development and not interested in creating a development team.
Task scope
The scope correlates with the type of problem your business tries to solve. Depending on your in-house team and tech capabilities, both options could fit.
However, in most cases big projects would benefit from outsourcing to manage the extensive list of tasks, while for the smaller projects, outstaffing will be enough.
Time constraints
Remote developers can start working on the project right away, while outsourcing requires additional preparation.
Budget
Generally, outstaffing is cheaper than outsourcing. However, the cost of both models depends on the project type and how complicated it is.
Final words
Both cooperation models have different approaches when it comes down to responsibility and development management.
Both models have stayed popular over the years because they address completely different development issues.
Consider Altamira as your software development team
Whether you’re interested in outsourcing or outstaffing, Altamira can offer outstaffed developers and take over the entire project itself.
Rapid talent deployment
Our IT outstaffing services get you immediate access to the best professionals.
Cost-efficiency
Being a cheaper alternative to traditional staffing, Altamira brings proven expertise at a fraction of the cost of in-house teams.
Flexible scaling
With our outstaffing services, your business can freely scale up or down depending on market dynamics.
NDA and privacy protection
All disclosed information and intellectual property rights are protected by the non-disclosure agreement.
Advanced technologies
Our development team is a home for experts in a wide range of technologies, from the web and mobile development to artificial intelligence.
Experienced developers
Our developers undergo regular certification and training to always match the needs of our clients
Contact us today, and let’s discuss our cooperation model.