Watching your business grow is exciting. But to meet the demands of increased growth, it’s likely that at a specific moment or period in time you’ll temporarily need to boost your IT development capacity as well. In those cases it is highly inefficient and therefore illogical to scale-up structurally, hiring expensive IT experts. At that point you are better off considering Outsourcing or Outstaffing. But how can you decide what is your best option? In this blog we will discuss the differences and the benefits of both solutions, and show you how you can decide what is the best option for you.
OUTSOURCING
Outsourcing enables you to hire the best external individual or team to develop a specific IT product or service for you that normally would have been produced in-house by your own employees and staff, for a fixed price. It is a perfect solution to temporarily boost the capacity of your IT department, and at the same time to keep operations moving, while you keep operational costs low and stay lean. According to Brandon Gaille, 46% of the companies indicated the main reason to outsource their IT project(s) was to cut costs on new hires, recruiting, benefits packages and technology, while 12% stated that it helped them to gain access to a specific or world-class IT expertise.
OUTSOURCING IS THE PERFECT SOLUTION TO TEMPORARILY BOOST THE CAPACITY OF YOUR IT DEPARTMENT, WHILE YOU KEEP OPERATIONS MOVING WITH THE LEAST AMOUNT OF HASSLE AND STAY LEAN.
In general, outsourcing offers the following benefits:
- Full control managing your company growth
As outstaffing makes it easy for you to increase the number of IT projects you initiate simultaneously without having to deal with the actual development, it enables you to accelerate your company growth whenever and for as much as you want. - Access to specific and unique IT expertise
Outsourcing grants you access to unique and specific IT expertise that is unavailable internally. - Keeping the focus
Outsourcing is a perfect solution to innovate, optimize, or to dial down while you keep your focus on the core aspects of your business, allocating your resources where they are most effective, and spinning off the less critical operations to an external partner. - Reducing risks
Fixed-price contracts put all of the risks associated with the project, such as meeting the deadline, protecting the budget and getting the job done on the outsourcing partner. - Controlling project costs
As you and your outsource partner are most likely to agree upon a fixed project price, outsourcing enables you to control (and manage) project costs. - Time and cost-savings
As outsourcing takes away the need to scale-up your department hiring additional IT professionals, it enables you to save time and costs that you otherwise would have to spend on recruitment activities, salaries, overhead, equipment, and technology.
On the downside, outsourcing also offers several important disadvantages to consider:
- Creating an unhealthy dependency
Outsourcing an entire IT project to a third party could, over time, create an unhealthy dependency of your organization on that party regarding the maintenance or future enhancement of this IT project, and the financial well-being of that party. - Loss of control and possible quality issues
Whenever you sign a contract to have another company develop a specific IT solution for you for a fixed price, you are handing over the management and control of that IT project to that company. It is likely that this outsourcing company will not be driven by the same mission and (quality) standards that drive your company, and that they will strive to make a profit from the services they are providing to you. Since the contract will fix the price, the only way for them to increase their profit will be to decrease expenses by trading off quality. - Threat to security and confidentiality
Outsourcing an entire IT project to a third person or party requires you to protect intellectual property and confidential data in order to prevent it to be compromised.
OUTSTAFFING
Outstaffing enables you to temporarily add (hire) one or more external IT experts to your team, and to have them work on a specific IT project under your supervision. It is the perfect solution to temporarily boost the capacity or to empower your IT department by adding extra manpower or specific or unique IT expertise to your team, while keeping your own resources as active and productive as possible, and maintaining complete control.
OUTSTAFFING IS THE PERFECT SOLUTION TO TEMPORARILY BOOST THE CAPACITY YOUR IT DEPARTMENT BY ADDING EXTRA MANPOWER OR SPECIFIC IT EXPERTISE TO YOUR TEAM, WHILE KEEPING YOUR OWN RESOURCES AS ACTIVE AND PRODUCTIVE AS POSSIBILE.
In general, outstaffing offers the following benefits:
- Managing company growth and operational costs
As outstaffing makes it easy for you to increase and decrease the number of dedicated IT specialists working in your team, and to decide for how long you want them to stay, it offers total flexibility scaling-up or scaling-down your IT department and managing operational costs. - Access to specific and unique IT expertise
Outstaffing grants you access to unique and specific IT expertise that is unavailable internally. - More control on the output and quality
As outstaffing enables you to manage and guide your team members personally, it gives you more control on their activities, their productivity, and the output or quality they deliver. - Ensuring your self-reliance
By developing your IT project yourself, you remain independent and ensure your self-reliance. - Time and cost-savings
Outstaffing enables you to save time and costs that you otherwise would have to spend on recruitment activities, and relieves you from responsibilities for compensation, taxes, insurance, equipment, software licenses, office expenses, etc.
On the downside, outstaffing also offers several important disadvantages to consider:
- No guarantees on the end-result
As the additional IT experts work under your supervision, it is not possible for you to put all of the risks associated with the project, such as meeting the deadline, protecting the budget and getting the job done externally. It is you who will have to carry the full responsibility for their productivity and the end result you achieve. - No guarantees on the efficiency and the quality
As the additional IT experts work under your supervision, it is you who is responsible for the amount of work your remote developers do, and the quality they deliver (garbage in = garbage out). - Danger of losing your focus
Managing multiple project and guiding more IT professionals simultaneously means more work, more distraction and therefore less focus.
MAIN DIFFERENCES AND BENEFITS: OUTSOURCING OVER OUTSTAFFING
Now, let us sum up the main differences between outsourcing and outstaffing, and the benefits outsourcing has to offer you over outstaffing:
- Guarantees on the end-result
If you outsource your IT project, you create certainty for yourself about the end-result and the costs. If you add external IT experts to your team (outstaffing) to develop your IT project yourself, you do not. - No responsibilities
If you outsource your IT project, you are not responsible for the amount of work your remote developers do, or their efficiency and the quality they deliver (garbage in = garbage out). If you add external IT experts to your team (outstaffing) to develop your IT project yourself, you are. - Save both time and hassle
If you outsource your IT project, you don’t lose valuable time recruiting the temporary IT experts you wish to add to your team, and learning how to work best with them. - Keeping your focus
If you outsource your IT project, you will be able keep your focus on the core aspects of your business, spinning off the less critical operations to an external partner. If you add external IT experts to your team (outstaffing) to develop your IT project yourself, you do not. - More control on project costs
If you outsource your IT project and agree upon a fixed project price, you will have 100% control on the project costs. If you add external IT experts to your team (outstaffing) to develop your IT project yourself, you do not.
WHEN YOU OUTSOURCE YOUR NEXT IT PROJECT, YOU ENSURE YOURSELF OF THE DESIRED OUTCOME
MAIN DIFFERENCES AND BENEFITS: OUTSTAFFING OVER OUTSOURCING
And let us take a look at the main differences between outstaffing and outsourcing, AND THE benefits outstaffing has to offer you over outsourcing:
- Keeping your own resources as productive (active) as possible
As outstaffing makes it possible for you to decide by yourself how many dedicated IT specialists you add to your team and for how long, it offers total flexibility scaling-up or scaling-down your IT team, while keeping your own resources as productive (active) as possible. If you outsource the entire IT project you do not have any control in this. - Offer your team the chance to evolve, while ensuring your independence
If you add external IT experts to your team (outstaffing) to develop your IT project yourself, you offer your team the chance to learn and to evolve, and you make sure you remain independent to an external party. If you outsource your next IT project you could, over time, create an unhealthy dependency of your organization on that party regarding the maintenance or future enhancement of this IT project. - More control on output and quality
As outstaffing enables you to guide your team members personally, it gives you more control on their activities, their productivity, and the output or quality they deliver. If you outsource the entire IT project you do not have any control in this. - Save budget
As outstaffing enables you to involve and use your own resources, and to manage the project yourself, outstaffing can and surely will help you to save budget in comparison to outsourcing.
OUTSTAFFING ENABLES YOU TO OFFER YOUR TEAM THE CHANCE TO EVOLVE AND TO REMAIN INDEPENDENT
NEED MORE INFORMATION OR STILL UNSURE WHICH IS BEST FOR YOUR NEEDS?
As an experienced and trusted IT development partner we are happy to help you determine which of two contracting models will be the best fit for your project. Call us at +31 853 012 993, or visit our website https://www.wesquare.nl/. We look forward to helping you out!