IT Outstaffing vs Outsourcing For Developers: Which Should You Choose?

Software application development is big business. With the growing need for customized in-house platforms, SaaS tools, mobile apps, and a recent boost in AI-powered software, successfully navigating the development process requires both a lengthy time investment and a sizable cost. 

To that end, companies are eschewing traditional in-house development teams in favor of outsourcing projects as needed. Both IT Outsourcing and IT Outstaffing are gaining popularity and are making the app development process much more accessible to the average businesses. But what’s the difference?

The Pros and Cons of IT Outstaffing vs Outsourcing for Application Developers

To relieve budgetary pressures while remaining competitive, a growing trend among tech companies is to turn to outside resources to handle their application development. However, different organizations have different needs; some require a higher degree of project oversight, while others are driven by cost factors. 

Let’s take a look at the differences between using an IT outstaffing company vs IT outsourcing and examine the set of pros and cons each one brings to the table. 

Hiring an IT Outstaffing Company for Development

Outstaffing your app development involves hiring an outside team of developers that delivers the cost benefits of outsourcing while giving you a high degree of control over the development process. In short, you are outsourcing only the execution itself; the project management and oversight remains firmly within your control. Think of it as a hybrid approach to outsourcing, where you outsource the work itself but control the process. 

This can be a double-edged sword. While full project oversight helps ensure that the development process stays on track- with issues being able to be identified and corrected early- it also means that the liability for any major problems or errors is yours. 

For example, let’s say that you outstaff your development project and gather an outside team to do the work. You’ll have to expend the time and resources to directly manage the project – from project design through to execution. You’ll decide on a development model- such as agile or waterfall- and ensure that the team functions according to schedule through each iteration. 

So there’s that extra cost involved, but in the end, you won’t have to worry about any unpleasant surprises if the final result isn’t what you had requested. This liability for quality assurance is a trade-off. At the end of the day, your chances of completing a successful application development process are significantly higher than by taking the outsourcing route. 

The Pros of IT Outstaffing Services 

• Hiring an outside team allows you to work with highly-talented developers without having to worry about salary, benefits, contracts, and employee management
• The outstaffing vendor handles payroll
• Lower cost than complete outsourcing
• Streamline and reduce your human resources staff
• Depending on your geographical area, you may be able to take advantage of significantly lower labor costs with offshore talent
• Ideal for companies needing full control over the development process, ensuring that the outside team executes the project according to the project scope and timelines
• Delivers a good mix of project management for a lower cost versus using an in-house development team

The Cons of IT Outstaffing Services

• A high degree of oversight is required versus outsourcing the project outright — not a ‘hands off’ approach
• You’ll need to ensure that the team is in full compliance with project scope and direction at all times
• You assume complete liability for any errors or project breakdowns

Hiring an IT Outsourcing Company for Development

Unlike the outstaffing model, IT outsourcing generally means that you hire an outside provider to handle the complete development process from start to finish. The cost benefits are still there as the outsourcing company you hire will take care of employee payroll and benefits. However, unlike with an IT outstaffing company, you’ll also have to account for higher costs associated with the project management and oversight components. 

This arrangement is ideal for companies needing app development without the added expenses of hiring an in-house team, but who either lack the expertise to guide the project, or don’t have the resources to commit to oversight. 

In some cases, client companies are attracted to the fact that the outsourcing vendor assumes full liability for the project development. Since they are being contracted to bring an idea to fruition, unless they deliver a functional app within the agreed-upon parameters, they are technically in violation of the agreement and would have to rectify any non-compliance. 

Of course, the problem with this arrangement is that the outcome is only as good as the scope defined at the project outset. So unless you’ve clearly defined the scope, timelines, and other factors, then you could end up with an application that isn’t quite what you bargained for. 

The Pros of Outsourcing Services

• Delivers cost savings by removing payroll requirements for development team
• Minimal oversight required since the outsourcing company directs the project
• Developers assume liability for any errors 

The Cons of Outsourcing Services

• Outsourcing the project management and oversight functions means a higher cost versus the IT outstaffing model
• Limited ability to manage project
• Flaws in the process can lead to problems down the road which aren’t caught earlier
• Can lead to project delays since project roadblocks aren’t always anticipated

Outsourcing Service or an IT Outstaffing Company: Which One is Better?

While both models have their advantages and disadvantages, choosing an IT outstaffing company delivers the cost benefits of using an outside development team while allowing you to maximize oversight and management of your application project. You’ll enjoy a faster time to market and a smoother development flow while maximizing your project ROI.

To learn more about how IT outstaffing is the solution to your application development project, contact us today.