Software development

Software Development: Outsourcing vs Outstaffing Difference

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Responsibility for project success lies mainly with the client. Since neither communication nor project management efforts are offloaded to any outsourcing partner, the success factors for a project stay in-house. Depending on the contracting company’s culture and current needs, this could be a pro or a con. It may even be what the company looks for, and if this is the case, then it is a strong indicator that outstaffing may be the right choice over Outsourcing. Outstaffing is one of the more “transparent” ways of outsourcing services. The main differences between software outsourcing and outstaffing are the scope of the project and the side responsible for the management of development activities.

  • In outsourcing, the client delegates full or partial product development to the outsourcing vendor’s team.
  • PWC claims that, on average, outsource payroll saves 18% more than in-house staffing.
  • The construction team works according to your accepted plan but does so independently.
  • Outsourcing service providers often works with multiple clients simultaneously.
  • Ultimately, if you work on a project-based business model, you’ll benefit most from this type of structure.
  • The main difference between outsourcing and outstaffing is that outsourcing refers to the entire project support, while outstaffing provides hiring and maintenance of experts.

Such services can be good for both short-term and prolonged cooperation, yielding a quality product. Let’s examine the pros and cons of outsourcing more closely. Outsourcing helpscompanies that don’t havemoney, time or reason to assemble their own in-house team of developers.

How to Find an Outstaffing or Outsourcing Company?

That way, the client is able to pick the best-in-class talent pre-approved by the provider. Outstaffing comes with the responsibility of managing remote developers. Even if they’re not physically present on your premise, you manage them as if they are a part of your in-house team. Conversely, an outsourced development team is self-managed.

Outsourcing vs. Outstaffing

Overtime work or rate changes are usually covered by clients. These drawbacks won’t affect the process if you partner with a reliable and professional agency that doesn’t try to overcharge you for mediocre services. Saying something like “managing the project is up to the client” sounds great to many business owners until it actually comes time to manage the project. But if the development process is likely to change, outsourcing can be a difficult solution. Outsourcing vendors understand this and are equipped to make delivery faster than most in-house teams.

reasons for outsourcing software development to Hungary in 2023

The employer is responsible for the salary, perks, and equipment needed for the job, while the client company provides the worker with tasks. Different situations need the use of outstaffing services. You must have an in-house development team to engage in outstaffing. Consider that you’ve employed a permanent team of developers, designers, testers, and project managers to work alongside you full-time. What if you have an urgent development need and your team doesn’t have the time or resources to handle it?

Outsourcing vs. Outstaffing

But if till isn’t enough, you can outsource the work to an outsourcing vendor. Imagine you’re a food production company or restaurant that wants to build an app where customers can order food directly from you. You ordinarily wouldn’t have an IT department since your primary business is to make food for people. Your wisest choice would be to outsource your software development, and not outstaff because you don’t have an already-existing IT department.


It may also be necessary to temporarily replace a full-time employee. There is a project, by the end of which the services of the employee will no longer be required. If it is necessary to reduce the number of the company’s staff, while not losing the number of employees working in it. This can be a barrier to coordination with the hiring company. Outsourcing, the client never knows who works on their project.

Outsourcing vs. Outstaffing

She is experienced in the domain of finance, digital marketing and information technology writing on Artificial Intelligence, IoT, PaaS and SaaS cloud computing etc. She is NIIT qualified in Advanced Network Computing, Google Certified in digital marketing. Her hobbies to maintain balance and reduce stress are gardening and cooking. You can continue to operate your company in complete peace, without interruptions or delays while developing your project. And training, and also helps to attract remote workers from other countries to provide efficiency.

What is outsourcing?

There isn’t a simple answer to choosing either approach, as it involves various considerations. Nevertheless, both are in high demand as companies and startups seek to scale their operations and pursue rapid growth. Outstaffing is ideal for companies that are working on newer, less established projects or who prefer to have more control over IT development. Owners with a non-technical background who don’t have experience managing IT projects.

Outsourcing vs. Outstaffing

Most often, outsourcing means that your contractor will do the whole scope of work – not just a task or two. If it’s an app, they will deal with everything – from technical requirements to final checks and maintenance. Having chosen outsourcing, you’ll most likely to interact with a project manager handling the team. They organize resources among all IT professionals working on your project, from your in-house team to their outsourced workforce.

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Instead, the client typically receives updates through an account manager or project manager without being able to personally gauge the situation. Work with IT outstaffing companies closer to your region or one with a manageable timezone. Alternatively, agree what is outstaffing on communication rules, such as sending queries by a specific hour and provide response in 2 working days. This helps to manage communication across certain time zones. Sign the outstaffing agreement and formally onboard the outstaffed developers to your team.

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