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Outsourcing vs. Outstaffing – How to choose properly?

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According to statistics, 3 out of every 5 companies in the world have taken advantage of outsourcing services. Even giants like Google, GitHub and WhatsApp would prefer to outsource services with the aim to keep a focus on their mission and priorities.

Why outsourcing has turned into such a great world trend? Why we need to outsource? How is that different from the need to outstaff and when should we abstain from undertaking any of thоse? Read this article and get a comprehensive view of the world of outsourcing and outstaffing nowadays.

 

When and why do IT outsourcing/outstaffing services appear?

Nowadays computers are an immutable part of every organization. For this reason

business owners either open new departments in their companies or hire someone else to do the software development and the whole computer maintenance. In the process many business people realize that it is much better off buying ready-made solutions than build their own from scratch. Gradually, it turns out that outsourcing and outstaffing not only save money, but also help in some other scenarios such as:

  • Safe data processing.
  • Possibility to integrate new technology trends seamlessly and fast.

 

What is the difference between Outsourcing and Outstaffing:

Let’s start with the basic definitions of both terms:

Outsourcing – a business practice which includes hiring a third party outside of a company to perform services and create goods. Outsourcing services are usually project-based and the client does not have access to the development team, which may be working on several more projects.

Outstaffing – a type of employment, in which a remotely working person does job duties for a certain client company. The person is not hired by the client company but by another agency. The latter one serves as an employer and is responsible for them.

Put simply, outsourcing deals with project support, whereas outstaffing provides individual people to do a certain job.

In order for you to fully understand the concepts of outsourcing and outstaffing, we have prepared a list of all the pros and cons those two services have.

 

Outsourcing

Advantages:

  • No additional burden for your team – a great plus for outsourced departments is that they are 100% responsible for the development and maintenance of products.
  • Greater workforce with the same number of employees – the process of interviewing, hiring and retaining people will no longer be your responsibility.
  • Better quality at the same cost – most probably the monthly fee for your outsourced services will equal the salary of someone working in your company. However, you will receive expertized help by a whole team of professionals.

Disadvantages:

  • No direct participation or control – as you will not be involved directly in the work process, your level of influence will decrease. That is why – you need to choose your outsourced department wisely.
  • Higher costs compared to outstaffing – yes, organizational issues for you will be minimal, but this will inevitably increase the hourly rates of your department as they will probably need to appoint a manager, who takes care of your project.

 

Outstaffing

Advantages:

  • More control – the client is in control of the development process and can influence it directly with ease.
  • Flexible hiring model – depending on your work you can increase or decrease the number of people you work with.
  • Lower hourly rates compared to outsourcing.

Disadvantages:

  • More responsibility for you – as a person managing a team, you will have full accountability over the work the outstaffed person does.
  • More management work – you will be directly managing the person who is outstaffed.

How to decide which one works best for your business?

Knowing the basic differences between outsourcing and outstaffing, you need to have one more factor in mind before taking a final decision which one is best for you. This is the factor, connected with technology advancements in your company.

If you do not focus on technology and do not plan to develop in this branch, it would be better to hire an outsourced department to be sure your project is in safe hands.  However, if you prefer to focus on technology development and develop your own approach and strategy, you can gain more workforce by simply outstaffing someone.

We, at GOT IT can offer you all the advantages of outsourced IT team and many more. Do you want to know more? Than contact us, follow us on Facebook and LinkedIn or subscribe to our newsletter to keep up with everything new from us.

 

Created by Georgi Stoyanov

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