The 21st century is the best thing that could happen to the business of all times. We have video calls and conferences, communicate via emails and multiple professional social networks and this is a pleasure no businessmen could imagine in the past. The engagement models have transformed so much that it’s hard to collect ten people who wouldn’t work in a company providing outsource or outstaffing services. In this digest, we will discuss the differences between the outsourcing and outstaffing – two major types of B2B collaboration popular on the modern market. Before we launch our “which is better outsourcing or outstaffing” tirade, let’s refresh our knowledge about the two notions.
In IT sphere, the collaboration with the outsourcing company looks in the following way: a service provider (an IT company) and a client sign an agreement that states that the service provider is responsible for the quality and process of development of a particular software. An outsourcing team is comprised of the well-synchronized members who have already worked with one another. The outsourcing company then provides a project with the PM, a required number of developers and manages the process from the beginning to an end. Things go differently when it comes to outstaffing since an outstaffing company is a supplier of human resource. The core idea of outstaffing is to escalate the size of the existing team of the partners in the shortest time possible. In addition, in outsourcing an employee can only work for one company on a full-time equivalent job base, meanwhile, in outstaffing, an employee can work for different companies being hired till the project is over.
Outsourcing vs outstaffing: what’s best for the client
Outsourcing is better for the majority of businesses as it predicts more determination and responsibility from the IT companies. The high-quality and satisfactory result of the collaboration directly affects the reputation of a company. In other words, the better the result – the more clients a company attracts. To leave a client satisfied, IT companies conduct the full cycle of product development: beginning from the business analysis, estimations, status meetings and ending with the product testing.
Outsourcing the pros and cons
- an on-time delivery of the project;
- good communication with the client;
- regular status meetings;
- rapid response to occurring problems;
- providing additional services like personal testing, PM;
- no time overlaps.
Outstaffing benefits and risks
- the project employees are coordinated by PMs;
- time gaps and overlaps are more likely to occur;
- each outstaff member is responsible only for one;
- improved scalability of team.
Surely, the outstaffing companies are responsible for insurance, taxation, and official employment but they carry less responsibility for personnel management and quality of the rendered services. Whereas, the outsourcing companies cover the entire scope of issues and services providing high-quality human resources.
Where outsourcing for recruitment would be an advantage?
The decision to outsource a product is complicated as software development companies would rather develop in-house and would consider extending the company size. What does outsourcing give you? Looking at the practice of the IT countries where outsourcing is most popular, Ukraine, Poland, and Hungary, to be precise, it is possible to conclude that the main drive to outsource to them is that they are cost-effective, experienced, and geographically and culturally proximate. Thus, it will give your business more time to concentrate on your main job a guarantee for a high-quality end-product. To meet the needs of the clients, Inoxoft provides both outsourcing and outstaffing services to international partners. Our reputation is built on the trust and positive feedback of our clients and we are more than ready to provide the high-quality IT outsourcing services.