Outsourcing vs. outstaffing, what to choose?

There is time when you feel it is difficult to manage everything in-house and the reason is  lack of resources, time, spending funds on creating special departments and so on. So, you probably begin thinking of new solutions and in what way you can boost the success of your enterprise. While running any business, you can always choose between outsourcing and outstaffing, meaning who will be responsible for accomplishing your projects, local companies or outsourcing ones. There are a lot of obvious pros and cons in both but the real thing you should know — it is understanding what each kind of process means.

Everything depends on the type of project and even budget plays the role. Before deciding what fits you better, be sure you know everything on this issue. These two words “outsourcing” and “outstaffing” can confuse newcomers who just started dealing with IT industry while considering the opposition outsourcing vs outstaffing. Let’s discover the topic.

Related: Ukrainian IT outsourcing industry

Two terms mean working remotely on the tasks and delivering results according to a deadline. Actually, IT sphere is all about remote work today as a lot of foreign customers prefer this type of working. The main difference is that outsourcing includes keeping the whole process of software development to a third party. Outstaffing involves looking for employees to run a project where most process controls the business owner. When you are going to choose between two types, pay attention to the core differences.

Selecting outsourcing partner

Outsourcing and outstaffing are very popular abroad and in Ukraine. It helps customers to better optimize expenses and accounting of your enterprise, especially when you just started your business. Two types of process can be effective when you know all advantages and drawbacks, so after that, you can easily concentrate on the core business goals.

Firstly, be sure you are aware of what these two terms denote. IT outsourcing means using external service providers, the companies awaring where to get outsourcing projects, to deliver business solutions. It involves delivering a product for third-party companies instead of doing all this work in-house. Outsourcing handles a whole business process to a third party including management, planning the project, maintenance and quick response in case of deviation from the schedule.

Outstaffing is known as a procedure of taking personnel out of the staff in which workers are usually officially registered as employees of the provider company.

What does outsourcing give you

A lot of IT companies (and ours is not an exception) are happy to offer the outsourcing  and outstaffing services. Boundaries where outsourcing takes place are blurred enough.  Even if your enterprise is not connected with IT industry, but the system of your business requires the efficient knowledge of current technologies, IT specialists assistance and  investment in technology, this would be the right choice for you. That is why the exact habitation where outsourcing begin and occur can hardly be defined. Nowadays, you are happy to choose from Eastern Europe IT  providers for your enterprise to start the project.  

Ukraine is fourth in world by number of IT specialists after the United States, that attracts foreign entrepreneurs so much. So, we have a clear idea where to find outsourcing clients. Telling the truth, you do save a lot of funds if you pay your attention to IT outsourcing companies especially concentrating on providers like Ukrainian, Polish, Hungarian and Bulgarian. The destinations can answer the question: “where does outsourcing exist?” However, they are not the only countries where outsourcing is most popular. Besides, no one could indicate exactly from where outsourcing originated primarily.

The IT industry in Eastern Europe is still very young. Twenty years ago it didn’t exist at all. As the result, the vast majority of developers are young, ambitious, mathematically-minded people. You should not establish special department within your company if you can use outsource services that is very convenient nowadays. Also, sometimes additional costs on hiring, managing IT professionals can be spent on boosting your business. This is where outsourcing for recruitment would be an advantage.

I forget to mention about purchasing special equipments, computer devices that will cost your over the globe. Well, a lot of additional expenses can overload your budget if you do not choose outsourcing. Actually, this is not to easy to find even a few examples where outsourcing failed. Trying this way, you will easily solve these issues having more time on main issues of your company. And afterwards, embracing the successful experience you hardly be able to answer the question “where did outsourcing start”.  There are plenty of projects out there and  they are outsourced to providers who are great specialists in their field in general as well as in where to find outsourcing projects in particular.

Related: 9 tips to prevent a horrifying contract with your IT partner in Ukraine

What will outstaffing give to your business

Ukrainian IT companies are growing every year offering the best quality to their partners and reducing their costs and time spent hiring skilled professionals. But in which segments and  where is outsourcing going now? Outsourcing is popular in different spheres beginning from insurance and banking, telecommunications, airline and travel industry, health care etc. For all those spheres where outsourcing is used to react quickly and flexibly is of great importance to the end-users who really values good service.

This should be achieved through stable IT systems that are difficult to develop without outsourcing. So, LESS expenses and MORE time that can be spent on something more important, these are the core pluses in this type of business.

The cons of outsourcing include more time required for communication: writing a plan to the project, clarifying requirements, discussing all issues of the project and so on. The contractor should adapt to you and meet all your expectations to succeed. Actually, the issue of long distances is considered to be the main question and with what outsourcing, I would say, successfully struggles every day.

 

Outstaffing

The instances where outsourcing can be avoided require a separate consideration, however. The clearer the requirement to the project is, the more chances are that your task will be completed in time and most importantly with receiving high quality results. If this system gains popularity today more and more, I am sure, this works. Of course this is up to a customer to decide the type of outsourcing where value is desirable to be added.

If we are talking about outstaffing, then we should take into account other aspects which are essential for enterprises. As you know this term means effective ways of solving staffing problems. A lot of companies around the world prefer using offsite professionals. Choosing the outstaffing service gives you opportunity to find best and very skilled workers from all over the world. You can increase or reduce the number of newcomers. Let’s take a simple example of what to choose outsourcing or outstaffing.

Related: Why outsourcing will help your business?


outsourcing process

 

Sometimes, outstaffing is much talked about in case customer owns a good technical team but it is not enough to successfully launch the product. He definitely needs some help. This assistance is called then outstaffing. The main idea is that you can give tasks and workers will do it directly. The way of outs­taf­fing is rather uni­ver­sal and is used in many cases at any en­terp­ri­ses. Nowadays, a wide range of companies are eager to apply outstaffing in order to reduce costs and the risks related to personnel.

If you see that there is a problem with a number of people running the project, you can solve the issue and apply just the enough number that should do the tasks. It can be a remote team in your office and you can manage it in the way you see would be the best for you. Good communication with the PM can solve a lot of problems that appear while developing the product. In the case of outstaffing, you are responsible for search and selection the needed employees to your project. It takes less time than looking for people in-house.

Another important factor is that applying outstaffing service will be a right decision if your company plans to involve investors as they can easily get acquainted not just with you but also with a part of team that creates, develops and launches the future product. Keeping the function of managing the employees, it is easier to solve all issues 24 hours without the fear of failure.

Related7 tips to find the best software development providers for your project

The obvious conclusion to be drawn is that, two of these ways can be rather good methods of working on the projects. Outsourcing as well as outstaffing has its pros and cons. You should just understand what option fits your business better. If your company has online service and one day you feel the need for web developers, then outstaffing will be perfect decision. Need more, mobile app? There is no point in creating new department of mobile team, outsourcing will save your time and money.

Definitely, this is the case where outsourcing is recommended. So, two methods can provide efficient results, just be sure to know which one is better for you right now. Your choice will depend on the current situation. Taking all abovementioned, the problem “which is better; outsourcing or insourcing” is roughly irrelevant. Whatever you choose, it will help you build long-term relationships and valuable experience in one or other sphere regardless the areas where outsourcing is most popular. Our team always supports vendors beginning from the early stage of the development and ending not with completing the project but supporting it for a long time. The primary task is to see the customer’s needs not just reduce his costs and improve the budget!

Related: Communication rules for successful business

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