What’s the Difference between Outsourcing and Outstaffing
Some companies can’t afford to create a specific in-house department. On the other hand, many companies can’t establish a needed department due to various reasons such as lack of talent in the city or even in the country. Businesses and companies worldwide no matter the industry must include several functions in their daily operations required by the shifts in market trends. Those operations can be either essential to market positions or business running strategies.
Hence, companies opt for remote team solutions and decide to outsource or outstaff or even both.
The difference between Outsourcing and Outstaffing
Almost every company goes through the phase when it has to hire one or more experts out from the company or country in order to meet goals or sudden requirements. Outsourcing and outstaffing are both solutions implemented in these cases. Both consist of subcontracting services to an outside provider, partner, or company to run one or more functions. One of the reasons why companies go for outstaffing is because they can’t handle specific tasks internally.
Both options offer reduced costs and fewer worries.
Outstaffing and Outsourcing companies are responsible for the wages, benefits, and other expenses created while running the operations for the seller/provider company.
When outstaffing, the provider only delivers tasks.
On the other hand, outsourcing consists of delegating tasks that can be handled by the in-house team, but they would result in higher costs and slow down the progress of other key operations.
Outstaffing can be explained as an extension of a company. In this case, the outstaffing company and the provider of the service work closely together despite physical distances. Cooperation is strong and based on a daily basis. In simple words, it means hiring a remote team that one can’t find in-house.
In the meantime, outsourcing companies take complete responsibility for the functions or operations delegated by the seller. They run services or deliver a complete project based on defined deadlines. The seller has little to no control over the outsourced projects-functions. However, there is a wide array of industries that can benefit from outstaffing solutions.
The type of outsourced/outstaffed function
Usually, the companies that decide to outsource their software development are not companies that rely completely on IT. They outsource functions that are required by the market or would help to better handle other more important functions by the internal team.
In the meantime, a company that opts for outstaffing software development might rely heavily on IT. These companies require access to talent or technology that is not available in the local or domestic market, or it’s highly expensive.
Dedicated team or independent team
Normally, standard outsourcing involves a company, the external service provider that operates as an independent business. It provides services performed by an individual or team that can work for different clients at the same time. The company that delegates the business operation is not in close contact with the specific individual responsible for the task. The advantage, in this case, is that the company pays for the service and not fixed labor hours of one or more people involved in the process. Moreover, some operations are completed over a short time period. The employees themself can work remotely or in the legal office of the outsourcing company. Such details are pre-defined in the contract between the vendor and the provider company.
If you have outsourced a project to a company, it’s possible that you will never talk to the developer or employees working on it. You will never know when they are working on your project in particular. In the end, you will get a final product conforming to the conditions defined in the initial contract.
On the other hand, outsaffing involves a dedicated team of professionals that work only for one or more projects of the given company. There is direct communication between the company that delegates the business operation and individual or teams that performs the task. Normally, the team is provided the necessary resources needed to perform the task by the outstaffing company. The individual or teamwork on the premises of the company. The outstaffing hiring model is more adequate for long-term projects. Only one company can hire a specific team at a given time. The team can be considered as an abroad extension of the in-house team. If you are outstaffing, you will have to choose the people you’re working with. You and the outstaffing company will build the team in cooperation
Quality of final products
Some people say that a dedicated team can guarantee better quality compared to a team that works with different clients or projects at the same time. However, nothing is written on stone.
There are people who can be good at handling more than one project at the same time and there are people working only with one project and yet not deliver the greatest quality. In the end, it all depends on the type of the project and employee skills and experience. Both outsourcing and outstanding models can help a lot of value to a company.
Both outsourcing and outstaffing have advantages and disadvantages. It all depends on the needs of the company, the type of process, and the working style. Those who require more control over the project can prefer outstaffing. Yet, if you are looking for a potential market that offers both great value and reasonable costs for outsourcing and outstaffing, Albania is a great option.