When you have a software or product development project, one key factor is that you will need qualified and experienced teams to handle the project in a professional manner and ensure a timely delivery of the final project. For this reason, you will feel stuck between outsourcing and outstaffing. Will outsourcing help you achieve your objective? Or does your project need outstaffing? These two hiring models can be quite confusing, and that is why in this guide, we explore an in-depth guide exploring the differences between the two models.

Overview of Outsourcing: What is Outsourcing?

Outsourcing is a form of offshore hiring method where a company contracts another company with specific services to handle the project to completion. Ideally, the outsourced company handles everything about the project, from planning, development, and testing until the product is finally launched.

To some extent, an outsourced company can offer post-service support to ensure the stability of the project after launching it. This depends on the agreement set between the two parties.

Benefits of Outsourcing

So, why would an entrepreneur opt to outsource a software development agency? There are many benefits, among them including the following:

• Seamless communication

Outsourcing creates a smooth collaborative environment between the teams. When communication is clear and smooth, then the project development will go on in a seamless manner.

• Better results

An outsourced company strives to deliver the best. While handling your project, they maintain ultimate focus ensuring they carry every step in a professional manner. After all, an outsourced company values a good reputation as they are also striving to serve as many businesses as possible. The only way they can stand out in the market is by delivering high-quality results in any project they partake in.

• Cost-effective

One of the core benefits why outsourcing is the best offshore hiring method is due to reduced costs. The only cost incurred here is the labor costs. Other costs such as travel, training, employee benefits, equipment required, infrastructure, and tech costs, among many other costs, are excluded here. This helps entrepreneurs save a lot while at the same time getting impressive results.

• Seamless management

Effective project management enhances the overall quality of the work delivered and better team collaboration. Since the outsourced company takes charge of the whole management process, you have a reduced workload, giving your in-house team adequate time to focus on core business requirements.

• Access to top talents

The outsourcing field has competitive companies dedicated to delivering excellent services. As a result, any business, whether an established one or a startup, can highly benefit from an outsourcing model by onboarding experts.

In fact, this model makes scaling up an easy route, especially for a struggling business. Instead of hiring full-time employees, of course, it can be costly; you simply outsource an agency with experts in relation to services you need at reduced costs while maintaining high-quality standards.

• All-Inclusive

An outsourced agency has a team of experienced and skilled professionals in the exact field. They will not only handle your project as per your preferences, but integrate their knowledge and advice you where necessary, ensuring the project aligns with the current industry trends, apart from just actualizing your vision and concept.

Disadvantages of Outsourcing

While outsourcing has a lot of benefits to a company, this model also has some challenges that you should be aware of for effective planning and executing the progress of the project. Below are some of the disadvantages of outsourcing you should know:

• You don’t have control over the team

After outsourcing your project, all the work is dedicated to the outsourced company. At the same time, you may want to ask more details concerning the team structure and overall progress of the project. It becomes hard since the outsourced team takes over everything and processes. You are limited to some actions since you only wait for the final project delivery.

Limited control over your project can make you feel uncomfortable to some extent.

• More risks involved

Outsourcing means sharing all the core details of your business with the outsourced company. In some instances, you might not feel comfortable sharing some of the confidential details about your business, but then you must share them to enhance project continuity.

What is the outsourced team deciding to exploit your business concept? This is one of the risks you should consider. However, you can overcome this challenge by taking the time to review and outsource only a team you are comfortable with. Besides, signing a contractual agreement protects your business at large.

Another risk associated with outsourcing is that you aren’t sure of the results or outcomes after contracting an outsourced team, especially for the first time. That is why you must review several outsourcing agencies and check their portfolios and reviews before settling with your ideal outsourced agency.

• Reduced morale on in-house teams

Again, while outsourcing adds extra expertise to a given project, some in-house teams may feel like they are handling tasks that aren’t in alignment with their interests and expertise. To some extent, they can end up feeling that with a slight pay rise, they can as well handle the work outsourced to another company in a smooth manner. This can, in one way or the other, demoralize them and reduce their psych towards pushing for the company’s objectives and vision.

• Lack of consistency

Sometimes, brand consistency is a key concept in an organization. Using the same methods, approaches, and strategies while handling different diverse projects creates a specific brand consistency. However, this is not possible with outsourcing. When you outsource different companies for diverse projects, their strategies and approaches are different. Besides, the team team within the outsourced company can change from time to time, thus no brand consistency, which can, in one way or another, affect the quality of the projects delivered.

• Less flexibility

When compared to an in-house team, it is easy to access your employees at any given time, ask them questions, see the progress & changes, and get regular updates. This, however, is not possible with an outsource team, especially when you outsource from a far region. Ideally, face to face communication creates flexibility, giving all an easy time on approaching matters and resolving issues, if any. This is contrary to the outsourcing model, where you have to plan and create schedules all the time to access the team.

When should you outsource?

So, when is the right time to outsource? You will know you need to adopt an outsourcing model under the following circumstances:

• When you want to keep focus on the business

Sometimes, you might be spending a lot of time on specific tasks and forgetting the core needs of your business. In such an instance, outsourcing the projects to experts in the field will save you time and resources at the same time. By outsourcing, you leave all the work to experts as you shift your focus on ideas and concepts that will transform and scale your business to the next level.

• When expanding your business

Every entrepreneur looks forward to expanding their businesses at the right time. However, business expansion comes with a set of challenges. The workload will be more and the demand will also be more. Instead of overwhelming your in-house team, you can outsource your project to experts for diverse services, thus giving the in-house team an easy time handling the increased workload as both teams strive to achieve the business expansion goals.

• When you want to accelerate project development speed

Sometimes, you simply need to get high-quality products and deliver them to the market in an accelerated manner. In such an instant, you cannot overwhelm the in-house team by extending working hours. This could, in one way or another, affect the quality of the product. Instead, you can outsource a team of experts to help accelerate the project completion and ensure a timely delivery.

• When introducing new project ideas

Again, as a way of scaling and growing the business, you can decide to introduce new ideas and concepts. However, your in-house team can lack the skills, experience, and knowledge to explore and execute new ideas. Instead of hiring in-house teams for such tasks, you can opt to outsource experts who understand the new concepts well, which will save you time and resources if you choose to hire and train new members.

• When skills and needs don’t match

You can also outsource when you don’t have the tools or skills required to carry out specific tasks. After all, you can only take a project you are sure to handle from scratch and ensure high quality results in the end. However, if you feel you will stuck along the way by needing extra experts, then outsourcing is the ideal way to approach and solve the mystery.

• When cutting down on costs

Cutting on expenditure, maximizing resources, and maintaining high quality in any project development a key aspects for any business.

Besides, saving some resources will help you boost your business growth to some extent. Outsourcing is one of the viable approaches you can use to cut costs and save resources by onboarding an expert team in a specific field.

• When working with strict deadlines

When working under tight deadlines it means you will be experiencing a lot of pressure. Ideally, you cannot overwhelm the in-house team by giving them a lot of tasks and increasing working hours. This will definitely affect their capabilities, which in turn will affect the quality of the project.

However, with outsourcing, you can seamlessly integrate an expert outsourcing team into your in-house team to carry out the processes in an easy and professional way, ensuring you meet the deadlines.

Overview of Outstaffing: What is Outstaffing?

Outstaffing is an offshore model of hiring where a customer contracts an expert from another company to handle specific tasks. Ideally, the outstaffed team becomes part of the in-house team, only that they work remotely.

Outstaffing works best when a company has a stable and reliable in-house team but only needs to find a specific expert to handle a specific task instead of hiring a full-time staff to save money. Therefore, the outstaffed teams work for a specific client and not from one project to another.

While this model is easy to implement, the HR department must be aware of all the outstaffing arrangements for easy planning and execution of processes.

Benefits of Outstaffing

Some of the notable benefits you will experience with outstaffing include the following:

• Full control

As a business owner, you have total control over the project processes. The outstaffed team focuses majorly on the project at hand. Besides, you will take charge of ensuring timely communication, task allocation, and prompt actions taken where necessary. Your full control means you can plan for the success of the project in a seamless manner.

• Highly flexible

Outstaffing is a flexible offshore mode of hiring where a company can onboard as many members as they want, depending on the workload. Ideally, every team member must, in one way or another, add value to the company. If the work volume increases, it is easy to expand the team by outstaffing. Again, if some workers fail to deliver promptly, the company can easily do replacements in alignment with the workload.

• Reduced costs

Outstaffing enhances cost reduction in a number of ways. The HR department, for instance, has some expenses eliminated because they no longer need to spend on some functionalities such as training, bonus payments, corporate events, software, and equipment costs.

• Fewer risks

In most cases, outstaffing handles most of the risks associated with regulations, taxing, and insurance policies. This ensures your company is in alignment with the set rules and regulations for smooth running.

• Access to top experts and global talent

Outstaffing creates a smooth way of attracting and onboarding the right talent. In any case, the outsourcing space is filled with experts in the industry; thus, it becomes easy to access and hire the required specialists to carry out specific tasks.

Above all, you aren’t limited to experts within your region. You can simply extend your teams by outstaffing global experts who will work remotely in a seamless manner.

• Better stability

In outstaffing, there is a contract binding the outstaffed members and business owners. Should a specialist step down suddenly, the customers are insured against such cases. Again, there is always an optional specialist to fix in case of an emergency or unexpected happening.

• Convenience

With outstaffing, you can easily focus on other core business functionalities since the outstaffing agency carries out most of the admin and HR tasks.

Disadvantages of outstaffing

While outstaffing offers flexibility and convenience, among many other benefits, it has some shortcomings, too, including the following:

• Limited control

With outstaffing, it means allowing the outstaffed team to take charge and control the final product delivery. Although it gives you adequate time to focus on other key business functionalities, you can be sure of the final standards of the product delivered.

A substandard product delivery can affect the reputation of your business, especially when the client feels unsatisfied.

• Communication issues

When you outstaff talents from another region, it means different time zones and different cultural practices. These two elements can lead to communication issues, thus affecting general collaboration between the in-house and extended teams.

• Data leakage

When you onboard staff members, it means giving them access to the company’s confidential details. For these reasons, always have a binding contract by signing an NDA. Besides, you should always take precautionary measures by outstaffing from a reputable and reliable company that guarantees you the safety of your confidential details, like Aalpha Information Systems.

When should you outstaff?

So, when do you know that you need to outstaff? Here are some cases that will show you it is time to consider outstaffing:

• When you need a one-time professional to carry out a specific task or when you need a quick staff fix to enhance the progress of your project.
• When you are accelerating MVP or product development for faster market release, you have less internal team.
• When you need to expand your in-house team but have limited resources to hire full-time employees.
• When your project has tight deadlines, and you want to speed up the development process.
• When you are a new entrepreneur, and you simply want to test some features as you review feedback from users before committing yourself fully.

Outsourcing vs Outstaffing: Differences

For a better understanding, we shall compare outsourcing with outstaffing under factors including budget, management, time, and purpose.

• Budget

Generally, outsourcing is more costly than outstaffing, but it is a cheaper option compared to the in-house hiring model.

Although outstaffing is a cost-effective way of onboarding top talents, it is almost similar to outsourcing. The key difference is that outstaffing hires talents from other companies to handle specific tasks as the business owner controls everything.

Outsourcing, on the other hand, involves channeling all the project requirements and processes to another agency where the business owner does not have control over the project and processes.

• Management

In outsourcing, the outsourced agency manages the entire project while the hiring company manages the project in outstaffing.

• Time

Outsourcing takes time to plan and onboard the outsourced company. The processes involve discussing the specifications and dynamics of the project before engaging the right team. Outstaffing, on the other hand, is a faster process since the specialist is readily available via the outsourcing agency.

• Purpose

Outsourcing has one main purpose: to handle the project from scratch while outstaffing has one major objective of finding and onboarding a specific professional for a specific task.

Outsourcing vs. outstaffing: which one shouldyou choose?

Both outstaffing and outsourcing are viable solutions for businesses looking for ways to grow and scale their businesses by onboarding professionals.

However, outsourcing is quite effective on a short-term basis. Outstaffing, on the other hand, works best with long-term business goals.

Therefore, based on the position and requirements of your business, you can easily access and determine the most effective model between outsourcing and outstaffing.

Conclusion

Having explored an in-depth description of outstaffing and outsourcing, you now have clear insights into the two hiring models. However, make sure you do a detailed analysis before you determine the appropriate method that will suit your in-house team and entire business at large.

Any queries? Connect with our offshore development company : Aalpha information systems!