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Outsourcing VS Outstaffing: What is the Difference?

  • 11-12 min read
  • April 29, 2022
  • 👍 Rating — 5 (1 vote)

These days, businesses of diverse industries and specifics select remote software development for their business needs and requirements. The current approach to remote cooperation with software vendors entails stable development and administrative processes, minimizing all potential risks in advance. However, it completely depends on the software development service provider you choose for your project.

Outsourcing and outstaffing business models entail remote cooperation between your company and the software development vendor as the team extension services. We propose to take a closer look at the core differentiators of these two types of cooperation to define which one suits your case best.

Outstaffing services definition

Outstaffing developers or development teams are an extension of your in-house development team. The reasons that cause the need for expanding the inner team are different – not enough technical skills or proficiency in technologies, lack of resources, scaling the product or company overall, etc.

The selected software development vendor is responsible for providing your internal team with the required software engineers for executing a certain set of tasks on your project. Meanwhile, the process of hiring the needed specialists is the duty of your outstaffing service provider.

The management of remote employees or remote teams is executed by your in-house project manager, as well as can be provided by remote managers.

However, remote software vendors offer different types and conditions of cooperation, one of those is a dedicated team. A dedicated team is a complete development team that consists of the engineers your project requires who will work directly on your project, with no occupies on other projects.

This type of outstaffing cooperation is commonly cost-effective and provides a fast time to launch your solution as you pay not only for several full-time developers but get the complete development team that is more profitable.

All in all, outstaff developers are hired by the software development vendor but can be occupied for execution assignments by their clients for other companies remotely.

It mostly suits technical companies, startups, or businesses, that have already created the complete inner team, and technological solution and just need additional hands to finish particular tasks on this project.

outstaffing model

Pros of outstaffing

  • Hiring developers with proven experience—your vendor must provide you with detailed information about each engineer who will be involved in your own team—technical proficiency, experience, real case studies, you have a wide range of candidates to choose the best;
  • You don’t deal with the recruiting process – outstaffing services save much of your time as you request the needed specialists and wait for their start date, you don’t need to surf the CVs and hold the interviews to define whether the candidate can be hired to the team, this process is completely obliged to your vendor;
  • You can easily replace the engineers if you are not satisfied with their skills level or anything else, moreover, you can easily switch to another software supplier if the cooperation with your vendors doesn’t correlate with your requirements and expectations.

Cons of outstaffing

  • Threat related to regular communication – this risk is supposed to be common for remote development teams, but it all depends on the internal structure of your software vendor, so you need to ensure its stability;
  • Not enough experience or skills for executing your tasks – as we mentioned above – you can easily replace the developers as well as change the software partner if some troubles appear, but a reliable software development vendor is always capable of finding quick solutions to all arisen problems during your cooperation, we surely can say that based on the experience of Altamira team;
  • The management of the development process is in your hands – you receive additional help from your inner team, but still, organization and managing issues are obliged to you and your company.

Outsourcing services definition

Outsourcing development services imply developing software solutions for businesses from scratch to launch by a remote development team. All management, hiring, and executing processes are the responsibility of your outsourcing company.

You provide your business needs, requirements, and expectations for the solution and the team turns all your ideas into reality. The developers engaged in building your solution can be occupied with other projects at the same time, as well as work only on your tasks. It all depends on the current requirements of your project.

As software outsourcing entails complete management for the vendor side, it means that the team can be transformed during the development – scale or narrow due to the ongoing tasks and assignments.

It means that your vendor is responsible for managing the entire process, then the company decides what engineers should be added or eliminated from the project. However, all these changes have to be confirmed by you as a client to be aware of what specialists work, their experience, hourly rates, and duties.

At Altamira, we have built many-many outsourcing teams for our clients, providing them with transparent project management, regular online meetings to discuss further plans and updates on the project, and high-level engineers.

outsourcing model

Pros of outsourcing

  • Budget optimization – outsourcing the development team really saves your company budget – there is no need to supply payrolls all year round as this is not an in-house team, your cooperation will end as soon as the solution is successfully released; of course, later you may need to contact the remote team several more times to upgrade your software, but it doesn’t mean you need to provide payrolls to engineers during the in-between periods;
  • Fast time to market – selecting the outsourcing dedicated development team, you get access to the complete development team that works directly on your project, the duration of this process surely depends on the complexity of your software solution, but it will definitely take less time than selecting in-house team who always has numerous various tasks as well as outstaff developers who will be occupied in other projects as well;
  • The development process and its management are not on your shoulders – the outsourcing team is responsible for each process and developer involved in your project, all issues and challenges are also resolved by the team; your task is to find a reliable software partner who you can entrust all internal workflows with.

Cons of outsourcing

  • Communication channels – this issue is typical for remote cooperation and can simply be addressed via discussing the frequency of your online meetings in advance; ensure that your software vendor completely understands your need for regular communications and can provide it wherever you require;
  • Risk of poor transparency – as the control over the entire development process is under your vendor, you need to be sure that you are aware and alerted about all changes and following plans that are happening on your entire project as you are the main decisions makers relating to any process despite you don’t manage it yourself.
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What team extension service does your case require?

We can discuss the details on a free consultation with our experts

What is the difference – outsourcing vs outstaffing?

Taking everything into account, the difference – outsourcing vs outstaffing is not really significant, but pretty obvious. The selection of one or other type of cooperation with the remote development team depends on the specifics of your project.

Outstaff suits if your company has already created an in-house development team and launched any type of custom business software solution. Then, outstaff developers may need to scale the inner team to continue building the solution or other types within your company.

Outsourcing development team is a great choice if you are willing to enable your business growth by developing a custom business app, but have no internal resources to start this process. Then you can surely hire a remote outsourcing team for developing software for your business needs from discovery to full release.

Outsourcing and outstaffing cooperation models are also different in the execution of project and processes management. In outstaffing, all organizational processes and control during the development are at your disposal.

So, the success of the development process and solution launch depend on your in-house team for the most part. Your software development vendor just supplied you with the needed engineers and can also offer your inner team the remote project manager. But still, a huge part of the responsibility owes to you.

If you select an outsourcing development team, they are responsible for the entire development process during your cooperation. Your obligation is to be informed about all issues, solutions, and decisions taken on the project while all other flows are arranged by the software development vendor.

What should you choose for your project?

Our Altamira team provides both of these services, but you may ask how we detect which one the company requires at the moment. To define it, we commonly hold online meetings to discuss all issues the client came to us with,  as well as specify the business needs and requirements.

So basically, we prepare a set of questions that help clients and our team to find the perfect solution to the ongoing problems and demands of the client’s business. Therefore, we would like to share some of these questions and statements to make your choice and decision easier.

How to find a software supplier?

Finding the software vendor for providing your company with outstaffing or outsourcing services might be challenging. The variety is surely scalable and you can find numerous companies that follow the outsourcing model, but it becomes hard to make the right choice and select a reliable and credible software partner.

Due to our experience in communicating with our clients, we would like to point out the things that they considered when looking for a software vendor. Commonly, the same software supply can provide you with outsourcing and outstaffing services depending on the specifics of your project.

Industry awareness and experience

No matter whether you need to expand your inner team or hire a complete remote development team, these engineers need to have proven experience working in your industry, with your technologies or kind of software solution. That will ensure the smoothness of your cooperation.

The availability to quickly scale the team

As we mentioned above, the software development supplier has to provide your inner team or outsourcing company with all required specialists to successfully finish the development process.

Make sure that if you need to scale the team by outstaff developers or widening the outsourcing team, your outsourcing provider is capable of doing it in the short term to avoid harm to the project.

Duration of the development

Each software development company that offers team extension services has an approximate duration of the development process depending on the type of cooperation you select.

Each software vendor has certain development approaches and iterations that basically give the ability to count the time needed to finish your project. Make sure the vendor has all the needed services and can execute them within the period of time that suits your company.

How Altamira can help

The range of Altamira services surely includes the various combinations of team extension like outstaffing, dedicated team, and outsourcing. The selection entirely depends on the ongoing business and development requirements of our clients.

We are different from other software suppliers by the quick reaction to the needs of clients and supplying them with engineers and resources fast. However, our key differentiator and benefit is the scale-up proposition for the technology companies who are willing to enable business growth and development. Let’s take a closer look at what we mean.

Scale-up proposition acts within the team extension services. Our company is responsible for supplying your inner team with the required specialists right away to fill in the urgent gaps. As soon as the critical risks are arranged, we can build the “Now, Soon, Later” plan that will precisely describe the further steps of your solution and business development cooperating with our engineering team.

Main steps to launch extendedteam

This cooperation lasts temporarily, and we are going to end it as soon as the product and our plans are released successfully. So here is the approximate flow of how we deal with companies within the scale-up proposition:

  • Collecting current business, software, and team requirements
  • Providing the CVs of the suitable engineers
  • Holding the interviews with each of them
  • Onboarding of our developers or remote software development team to your company.

And that is the difference between outstaffing and outsourcing software development. If you need outstaff developers, then the onboarding and management processes are almost completely your tasks as a client.

If you select software outsourcing services, we deal with all administrative processes and manage our software development team independently.

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FAQ

Both services are included in the team extension service. Outstaff developers scale your inner team for a certain period you require. Outsourcing development entails building your software product remotely from discovery to launch.
The selection of team extension service you need completely depends on your business demands and the overall scope of work on your project. This question can be resolved after the free consultation with our team. So please contact us to discuss the specifics of your project.

Creator

Due to my Master`s Degree in journalism, I focus on the details while doing the research on the topic. My particular curiosity is about the latest mobile app developments that start in 2015 that make life easier and save much time to spend it more productive. I am an expert in reviewing and consulting web projects related to web applications, especially if they are connected with wearables.
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