Outsourcing and outstaffing are pretty new terms, so there are still more than enough people trying to figure out the difference between these two strategies. Are you one of them? Yes? Then your search for the truth is finally over – we will tell you everything you wanted to know about outsourcing and outstaffing, and even a little bit more! No worries, knotty terminology is not welcome here – we will explain everything in a simple and understandable way.
So, what lies beneath the outsourcing?
To understand the difference, imagine that you are an owner of some kind of company. Ready? Great! One day you decide that it would be amazing to develop a mobile application which would make your clients’ lives easier. It seems that you really care of your clients, but there are no programmers among your employees, as IT is not on the list of your company’s activities. But don’t give way to despair, outsourcing will help to solve this problem! This strategy means delegating the project to a third part which has all the resources required for successful completion of the task: equipment, qualified staff, and so on. Obviously, outsourcing saves your budget, as you don’t have to pay for facilities and specialists’ vacations, sick leaves and training. You pay only for service, but reducing costs is not the primary aim of outsourcing. First of all, it allows you to focus on your core activities and to free the available in-house resources, while an outsourcing provider takes care of hiring the staff, managing the documentation, etc. Sounds attractive, doesn’t it? But remember that any strategy has its disadvantages, and outsourcing is not an exception in this case. The most serious drawback is that you won’t be able to control the whole development process. Apart from this, outsourcing usually costs more than outstaffing.
What is outstaffing about?
But let’s not get ahead of ourselves – before making a final choice it is essential to define what the outstaffing is. The mechanism is as follows: your company hires the employees of the outstaffing supplier, who continue working at their regular place, but change their employer. Outstaffing is not about a complete transfer of functions, but about getting workers for specific tasks. Getting back to example with an extremely useful mobile application, outstaffing means that you have an IT department in your own company, but you still need a niche specialist. Just like outsourcing, such a strategy allows to avoid paying for facilities, insurance, etc. You also have full access to the whole development process and to any of the team members. Flexibility in increasing or decreasing the number of employees working on your project is another advantage, but there are still some drawbacks which may spoil the initial positive impression. Thus, you may experience certain difficulties with communication between the management and remote workers (especially if they live halfway across the world!). Moreover, you and your in-house team will be responsible for all the delivery concerns. And, as it was mentioned before, outstaffing is not as expensive as outsourcing, but in this case employees get a monthly salary, not a single reward in the end of the project.
How to make a right choice?
Both outsourcing and outstaffing can help you to reach the desired goal, but how to make a choice between these strategies and not to regret it afterwards? Well, it is not as complicated as it may seem to be, just answer the following questions. Answer honestly, otherwise, you will have to deal with all the unpleasant consequences on your own! So, are you ready to guide the performer’s activities? Are you qualified enough to keep the process under your total control? Are you ready to deal with potential difficulties related to communication with the team? If you replied “yes” to all of these questions, choose outstaffing. But if you have no essential experience and want to stay focused on your company’s main activity, go for outsourcing – this strategy is often used for standalone projects, but it may also turn into a long-term partnership.