Table of Contents
- What is outsourcing?
- What is outstaffing?
- Outsourcing pros and cons
- Outstaffing: pros and cons
- Outstaffing vs. Outsourcing: which one to choose?
The choice between outstaffing and outsourcing is eternal. What is the difference between outsourcing and outstaffing and which one is more preferable and beneficial for achieving business needs and goals?
What is outsourcing?
Outsourcing is a B2B cooperation where one company hires another company to deal with a certain scope of business tasks.
The most popular things to outsource are call center services, customer and technical support, and BPO services.
What is outstaffing?
Outstaffing is a B2B cooperation where one company hires another company to source technical professionals. In this case, they become a part of the client’s team, but work on the outstaffing company’s premises.
Outsourcing pros and cons
✅ The quality is the vendor’s responsibility
According to Clutch, 59% of businesses outsource to cut operation costs and only 31% do it to improve service quality. With outsourcing, enhancing the quality is a vendor’s responsibility. All processes are controlled and supervised by the vendor’s team. The client and their customers only get the final product.
This allows businesses to free resources and direct their attention to business growth.
❌ Control is in the vendor’s hands
Together with all processes, an outsourcing vendor takes almost the entire project control. They establish day-to-day operations and processes, provide teams with information and advice, and deal with emerging roadblocks. The client themselves might be involved in the process, but not for 100%, which might make the collaboration frustrating.
✅ No need for day-to-day management
97% of businesses believe proper project management is crucial for organizational success. An average business has a 70% project failure rate that can only be decreased by a proper and dedicated management. It is not always possible to achieve in-house.
Outsourcing provides companies with constant project supervision that can help increase a team’s productivity and provide the control required by difficult projects and tasks.
❌ Costs more than outstaffing
Because of the resources spent on management and supervision, an outsourcing client does not only pay for the tech team. They also pay for the time and effort of the management team, which can significantly increase the costs of the service compared to outstaffing.
✅ It is filled with innovations
Outsourcing is a mature industry. It has traditions, experience and innovations. It is constantly developing and changing in accordance with customers’ requirements and desires. On the other hand, constant shifts can confuse professionals and cause roadblocks:
- Not all tech professionals can follow the latest trends and provide services of equal quality.
- Outsourcing teams may have no time to catch up with ever-changing demands.
The combination of tradition and innovation seemingly makes outsourcing a better choice over outstaffing. Outstaffing, on the other hand, can be a much better choice for businesses with specific requirements.
Outstaffing: pros and cons
✅ The client holds all controls
No desire to relinquish control is often a key factor in ‘To outsource or not to outsource?’ question. Outstaffing provides businesses with an opportunity to optimize processes, save on high costs and retain all control over the project. Given the right amount of available resources, businesses can benefit from a full control over the projects and tasks of the professionals working on it.
❌ The processes are a client’s responsibility
With separate professionals or entire teams not working on business’ premises, a client is still responsible for:
- Time management.
- Defining the scope of work.
- Following up on the task statuses.
- Checking the quality of work and so on.
Keep in mind that with time, the need for management decreases as everyone gains more understanding in and experience with the project.
✅ The processes are totally and fully flexible
The team can not only scale as required by the project, but quickly and efficiently adapt the processes to the shifting requirements. This is possible due to direct communication. The flow has no mediator and no bottlenecks, which allows communicating all changes directly to the team with no loss of the information.
❌ It might seem too difficult
Business owners might hesitate to leverage outstaffing because of its seeming difficulty.
The toughest outstaffing stage is choosing the provider of the service. The rest requires minimal effort from the client’s side — recruitment, interviewing, onboarding, setting up, and retention become direct responsibilities of the service provider.
Seemingly difficult, outstaffing provides tech companies with a very easy solution.
✅ It is more efficient
Freeing up additional resources, minimal participation in the recruiting process, and not having to engage in the operational processes makes outstaffing more efficient and definitely more safe than searching for freelance specialists or hiring them in-house.
Outstaffing vs. Outsourcing: which one to choose?
To determine which option to choose, a business needs to answer a few simple questions:
Do you have resources for management?
Yes: if you have the resources for direct management, outstaffing is a better choice.
No: outsourcing would be better, but be ready to relinquish some control.
How long will a project take?
Short-term (up to a year): short-term projects will benefit more from outstaffing. These teams already possess all required knowledge and can jump directly into work processes.
Long-term (longer than 1 year): outstaffed team can take care of a project of any length.
What specialists do you need?
With very technical and specific knowledge and skills: no doubt — outstaffing is the right choice here.
Mostly BPO and support: outsourced teams are a better choice.
At first glance, outstaffing and outsourcing seem similar. In reality, these companies provide businesses with different solutions and help them achieve different business goals.