25.07.2022 09:30

What is the Difference between Outsourcing and Outstaffing

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Businesses love outsourcing and outstaffing. These models speed up the development process, and can also help you save time and money. These models enable businesses to tap into the experience and valuable resources of employees from anywhere in the world.

These models are popular in many industries and are well-suited for certain domains. Continue reading to learn more about Outsourcing and Outstaffing and the effective tips for finding the right fit.

The Difference between Outsourcing and Outstaffing

Many people mistakenly believe that Outsourcing and Outstaffing can be interchangeable.

Software Development Outsourcing is a method whereby a company employs workers from another company to complete specific tasks.

It can be creating an app, a site, or a software product. Outsourcing is often used to mean that the contractor will complete the entire work scope and not just one or two tasks.

If you are looking to build a mobile application, the contractor will handle everything from technical requirements to maintenance and final inspections.

You will be assigned a project manager if you decide to outsource. They will communicate with you and manage the whole team.

Outstaffing, on the other hand, is a model where a third party worker or team does your work. Although the third party is an employee of another company, they do your work.

Outstaffing allows customers to control all aspects of the work and has direct access to the outsourced staff. You will need to manage both the outsourced team and your own team when you outsource. However, Outstaffing will handle the payroll.

This is a good approach if you have a team of developers but don’t have the expertise needed for a specific project.

Outsourcing vs. Outstaffing: Looking for the Best Fit

There is no universal solution and no one can tell what you should do. Each situation is different and needs to be considered. You must first evaluate your resources to find the right match.

Outsourcing is an option if you don’t have the resources or the software department to complete your project. Outstaffing, on the other hand, is the best option if your team lacks the strength and can seamlessly manage a third party team to complete a project.

You need to understand the basic principles of Outsourcing and Outstaffing before you make a decision about which model is best for you.

How does Outsourcing work?

A universal algorithm is used when you need to establish cooperation with your outsourcing company:

  • Create and allocate the budget.
  • You should look for an experienced, competent outsourcer.
  • They will require a product requirements document which outlines all your priorities.
  • The outsourcer will need to be briefed about your requirements as well as the details of the project.
  • Regular meetings should be scheduled with your team to discuss progress and make any necessary modifications.
  • You will need to give feedback and evaluate the results.

How does Outstaffing Work?

Outstaffing is a different way to get the results you want:

  • You need to organize a selection campaign just like you do for candidates to find the right IT professionals.
  • To ensure that all employees are able to work together, the final project requirements must be defined.
  • To ensure smooth workflow, you will need to purchase the software.
  • The onboard team can be trained and given a work load if necessary.
  • Monitoring the performance of the outmanned team.
  • Give regular feedback about how they are doing and areas where they need to improve.
  • Assess the quality of your deliverables and make any necessary changes.

Make Outsourcing and Outstaffing Great (Always): Useful Cues

Start with Goal Setting and Scheduling:

You need to decide what your project’s goal is, regardless of whether it is outsourcing or outstaffing. First, you need to decide which model you want. Once you have hired a team, communicate your goals to the vendor so they can get started.

If you can provide them with all details about your project, it will be helpful. They will give you an accurate estimate of the cost and the duration of your project if you provide more information.

  • Prioritize Finding The Right Vendor

You must consider the following essential factors when selecting vendors for your project: their competence domain, portfolio, reviews from past clients, and other relevant information.

barriers, cultural backgrounds, work ethics and timezone are all important considerations. This will help you narrow down your options to choose the best company.

  • The dirty word is the lowest offer

Although it may sound appealing, you should not pay the lowest rate. It is impossible to expect quality at a low price. This could lead you to compromise on key performance indicators for your software product.

  • You can’t accept a fixed-price deal

If you are clear about the cost of your project, you can feel more in control and safe. Your outsourcer will handle all financial risks and upcharges.

You may have other concerns if you let go of all your worries. You may end up paying more if the vendor keeps a margin of risk in the fixed cost. Developers will be limited in their creativity if the initial sum is set. They will try to stick to the budget without any adjustments.

  • Contracts are a must-have

A contract is the best way to ensure financial, technical, management and communication are all regulated. Both parties will sign this document, which will contain all details about the project.

  • It’s easy to do

We recommend that you start with a smaller assignment if you are collaborating with a vendor first. You can continue to reap the benefits of software outsourcing if you are happy with the results.

  • Payouts that are related to milestones

Do not pay the full amount upfront. It is a smart move to pay an advance payment of 1/3 of the final amount, and then split the remainder to reach milestones. They will work together to meet deadlines.

  • Coaching the staff at-internal

This tip is crucial when you are considering outstaffing. If you can explain to your employees the benefits, they will be more likely to accept temporary staffing. This helps improve the efficiency of the workflow.

  • Communicate

Collaboration with remote teams is crucial It could lead to the end of the project. You should create communication channels that are easy to use for both sides.

  • Provision for a follow up

It is important to include a support clause that details the possibility of cooperation between the parties following the completion of a project. This will ensure that you don’t have to search for another vendor to fix or correct something after your product launches.


Outsourcing and Outstaffing both involve the use of workers outside your company for the job. The difference is in who manages them. Before you make the right decision, weigh all pros and cons and choose the best business model to suit your needs. You should carefully consider your needs and search for affordable, high-quality services.

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